OP-D-2-C PAYABLES AND DISBURSEMENT
SPECIFIC AUTHORITY
Florida Statutes Chapter 255
Section 112.061(5)(b)
Section 55.03(1)
The Payables and Disbursement Services Team is responsible for issuing encumbered and unencumbered vendor payments, non-duty student stipend payments, updating the vendor file for AP transactions and maintaining good relationships with vendors and the University community as a whole.
General Accounting works closely with departments to process interdepartmental requisitions and interdepartmental expense transfers, check printing and distribution and construction payments. This policy is designed to provide knowledge of Florida Statutes and University procedures as well as training in the use of the Online Management of Networked Information (OMNI). OMNI has been renamed the official accounting system for the University. For the purposes of this policy, we will continue to refer to it as OMNI.
Carefully following this policy will speed payments to vendors, save unnecessary interest penalty payments, and reduce payment problems. Close cooperation between Florida State University's departments and Payables and Disbursement Services is necessary to ensure the University's compliance with State statutes dealing with vendor payments.
For the purposes of this section, the following words shall have the meanings indicated:
Board of Trustees
Board of Trustees means the thirteen-member board responsible for University operations.Commodity
Commodity means any of the various supplies, materials, goods, merchandise, food, equipment, and other personal property, including a mobile home, trailer, or other portable structure with floor space of less than 5,000 square feet, purchased, leased, or otherwise contracted for by the University and its agencies. Commodity also includes interest on deferred-payment commodity contracts approved by the University for the purchase of other commodities. However, commodities purchased for resale are excluded from this definition. Printing of publications shall be considered a commodity when let per contract, whether purchased for resale or not.Compensation
Compensation means the total amount paid for professional services.Controller
Controller refers to the University Controller or the University Controller’s Office. The terms shall have the same meaning and be used interchangeably.Contractor
Contractor means a person who contracts to sell commodities or contractual services.Contractual service Contractual service means the rendering by a contractor of its time and effort rather than the furnishing of specific commodities. The term applies only to those services rendered by individuals and firms who are independent contractors, and such services may include, but are not limited to, evaluations; consultations; maintenance; accounting; security; management systems; management consulting; educational training programs; research and development studies or reports on the findings of consultants engaged there under; and professional, technical, and social services. Pursuant to Ref.s. 255, F.S. "contractual service" does not include any contract for the furnishing of labor or materials for the construction, renovation, repair, modification, or demolition of any facility, building, portion of building, utility, park, parking lot, or structure or other improvement to real property.
Disbursement
Disbursement means the payment of an expenditure.Expenditure
Expenditure means the creation or incurring of a legal obligation to disburse money.Expense
Expense means the usual, ordinary, and incidental expenditures by the University, including, but not limited to, such items as contractual services, commodities, and supplies of a consumable nature, current obligations, and fixed charges, and excluding expenditures classified as operating capital outlay. Payments to other funds or local, state, or federal agencies are included in this budget classification of expense.Household goods
Household goods mean personal effects and property used or to be used in the employee's dwelling.Information technology resources
Information technology resources mean data processing hardware, software and services, supplies, personnel, facility resources, maintenance, and training.Invoice
Invoice means a written document delivered to a purchaser showing a description of the goods purchased, the quantity, and the price; and as appropriate, the nature of delivery and other particulars of goods or services sold or services rendered.Moving expenses
Moving expenses means, and is limited to, the cost of packing, storing and shipping of household goods or a mobile home and one automobile.Online Management of Networked Information System (OMNI)
OMNI is the name of the University’s enterprise resource planning system that is powered by Oracle and is designed to meet the University’s financial and human resource administration needs.Payment Request Form (PRF)
The PRF is an online form used to pay unencumbered disbursements.Person with disabilities
Person with disabilities means any person diagnosed as having a physical disability, including but not limited to blindness, or the loss of one or more life functions leaving that person mobility-impaired (or sensory-impaired) requiring the use of a trained animal companion or prosthetic equipment, including, but not limited to, crutches, walkers, canes, or wheelchairs.Perquisites
Perquisites means those things, or the use thereof, or services of a kind that confer on the officers or employees receiving them some benefit that is in the nature of additional compensation, or which reduces to some extent the normal personal expenses of the officer or employee receiving the same, and shall include, but not be limited to, such things as quarters, subsistence, utilities, laundry services, medical service, use of University-owned vehicles for other than University purposes, and other similar things.Professional services
A professional service means those services within the scope of a professional practice such as accounting, architecture, professional engineering, or law.Sponsored programs
Sponsored programs means any activity, function or funding provided by sources external to the University to provide the granting agency, government or other entity with identifiable results, goods or services.University Purchasing Card
University Purchasing Card means the purchasing card issued an individual pursuant to the University's Purchasing Card Program.University Business Administrators (UBA)
University Business Administrators (UBA) means the position(s) within a college/school/department/center assigned to the University Business Administrators (UBA) Program of the Assistant Vice President for Administrative Services. These positions function within the participating UBA client site to locally provide services related to the functions of the Division of Finance and Administration.Vendor Ombudsman
This term refers to the position within the Office of the Senior Vice President for Finance and Administration whose responsibilities include the review and recommendation for disposition of vendor complaints involving the University’s prompt payment compliance rules.Voucher
Voucher means an electronic payment authorization complete with the invoice and such other supporting documentation necessary to authenticate the recording of a transaction into the accounting records.
OP-D-2-C3 UNIVERSITY PROMPT PAYMENT POLICY (Revised June 11, 2004)
All payments made by the University are subject to University Policy and Rules as approved by the University's Board of Trustees. It is the policy of the University that documentation authorizing payment of an invoice shall be approved for payment not later than forty (40) days, after receipt of the invoice and receipt, inspection, and approval of the goods or services, except that in the case of a bona fide dispute the voucher shall contain a statement of the dispute and authorize payment only in the amount not disputed. All payments shall be disbursed within 40 days after approval for payment.
- Approval and inspection of goods or services shall take no longer than five (5) days unless the bid specifications, purchase order, or contract specifies otherwise. The 40-day payment requirement may be waived in whole or in part by the University Controller on a showing of exceptional circumstances in accordance with rules of the University. For the purposes of determining the receipt of invoice date, the department is deemed to receive an invoice on the date on which a proper invoice is first received at the location designated by the University.
- The University is deemed to have received an invoice on the date of the invoice if the department has failed to annotate the invoice with the date of receipt at the time the department actually received the invoice or failed at the time the order is placed or contract made to designate a specific location to which the invoice must be delivered.
- The University may make partial payments to a contractor upon partial delivery of goods or services or upon partial completion of construction when a request for such partial payment is made by the contractor and approved by the Controller.
- If the terms of the invoice provide a discount for payment in less than 30 days, the University shall preferentially process it and use all diligence to obtain the saving by compliance with the invoice terms.
- Travel and other reimbursements to University officers and employees must be paid in the same timeframes and process as payments to vendors under this section, except payment of Class C travel subsistence. Class C travel subsistence shall be paid in accordance with the schedule established by the State's Chief Financial Officer pursuant to Ref.112.061(5)(b), F.S.
- This section does not apply to payments made to State agencies or other governmental entities within the State of Florida.
- The University shall authorize advance payments for goods and services, including, but not limited to, maintenance agreements and subscriptions when it is in the best interest of the University to make payments in advance and it has been determined there is adequate protection to ensure that such goods or services will be provided.
- Payments not made on a timely basis are subject to an interest penalty payment at a rate established annually by the Chief Financial Officer of the State of Florida as prescribed in Section 55.03(1), Florida Statutes. It will be on the unpaid balance from the expiration of such 40-day period until such time as the payment is issued to the vendor. Such interest shall be added to the invoice at the time of submission to the Controller for payment whenever possible.
- All purchasing agreements between the University and a vendor shall include a statement of the vendor's rights and the state's responsibilities under these rules. The vendor's rights shall include being provided with the telephone number of the vendor ombudsman within the Office of the Senior Vice President for Finance and Administration, which information is provided shall also be placed on all purchase orders.
- Invoices received from vendors which have failed to supply the University with a complete and accurate W-9 or other form that provides all necessary data to determine 1099 status will be deemed insufficient for payment until such information is obtained.
- For goods or services that are acquired using a University contract, with a pre-approved cost per item, approved by the Board of Trustees, inspection and approval is not required. Upon certification of receipt by the department, payment will be issued by the Controller's Office or the appropriate UBA within the timeframe necessary to meet the terms and conditions of the above-referenced policy.
OP-D-2-C4 PURCHASES FROM CONTRACT AND GRANT BUDGETS
Any purchases made from a Sponsored Research project greater than $1,000 must by approved by Sponsored Research Accounting Services prior to submission to Purchasing, Payables and Disbursement or Travel. A formal approval stamp and authorized signature must be on all forms prior to submission. Documents will be returned to the initiating department if the required stamp is not on the forms.
OP-D-2-C5 PAYMENTS TO OUTSIDE VENDORS
A. GeneralIt is the policy of the University that all purchases of the University are to be made through the University's Purchasing Services Department. The use of Purchasing Services ensures that the purchase has received the appropriate review for compliance with all pertinent State laws, regulations and University policies.
B. Encumbered DisbursementsVendors who have received a purchase order from the University are instructed to submit their invoice to the University's Payables and Disbursement Services section. If the merchandise and/or the invoice are received in the department, it is necessary for the department to ensure that the invoice is forwarded to Payables and Disbursement Services immediately for payment. For more information on processing receipts in OMNI please see Purchasing’s website.
C. Unencumbered DisbursementsThe unencumbered disbursement should only occur where normal purchasing procedures are not available or where a vendor will not accept a procurement card from the University. In the event that a purchase order has not been prepared and sent to the vendor, the payment will be made unencumbered. The responsibility is placed on the Departmental Budget Manager to ensure sufficient budget is available for the payment of the invoice. When this occurs, the invoice and the appropriate unencumbered payment form should be sent to Payables and Disbursement Services immediately upon receipt. Examples of purchases that would be paid as an unencumbered disbursement are subscriptions, freight bills, or non-travel reimbursements. When it is determined that an unencumbered purchase should have been acquired with a purchase order, a confirming purchase order must be requested from the Purchasing Department.
D. Procedures for PaymentVendors who have received a purchase order from the University are instructed to submit their invoice to the University's Payables and Disbursement Services section. In the event a department has received the invoice, the following procedures must be followed:
1. If satisfactory delivery has been made and the invoice is correct, the original invoice should be forwarded promptly to Payables and Disbursement Services and the merchandise should be receipted in OMNI. Copies of any related correspondence with the vendor should be included to substantiate the approval date.
2. No notations, strike-overs, corrections, or explanations other than the approval signatures, should be made by the departments on the face of the invoice. (If necessary, a note or memorandum of explanation should be attached documenting a delay in approval due to non-delivery, wrong shipment, or other discrepancies).
3. No document will be processed for a disbursement which appears to be of a personal nature or for an item not related to the function and purpose of the budgetary unit submitting the document.
4. Damage claims or disagreements with vendors regarding prices, specifications, quality, etc., must be handled through Purchasing.
5. Any changes to purchase order terms such as prices, quantity, items, etc., should be processed through Purchasing prior to receipt of the invoice.
6. Every effort is made to take advantage of discounts. (Among vendors it is common for the credit period to begin with the date of their invoice.) If payment is due within a stated number of days after the date of the invoice, for example, 30 days, the terms are said to be "net 30 days", which may be written as "n/30". The expression "2/10, n/30" means that although the credit period is 30 days, the department may deduct 2% of the amount of the invoice if payment is made within 10 days of the invoice date. Many times the vendor will state on the invoice the exact amount of the discount allowed, if paid within the stated credit terms.
When invoices are received in the department, they should be reviewed for discounts. If a discount is allowed, the invoice should receive priority for handling. This can be done by flagging the invoice and forwarding it for processing as quickly as possible. The Payables and Disbursement Section will give priority to processing discount invoices.
E. Foreign Vendor Payments RequestsIf a payment is required to a vendor outside the U.S. by foreign draft or wire transfer, the payment is processed in the same manner as U.S. payments. In addition, the department must complete and submit a Payment Request Form (PA-4). This form is used to indicate the required method of foreign payment and to provide the Accounting Services Office with sufficient information to complete the payment disbursement. The form must be submitted as an attachment to the original invoice. After the payment has been audited by Payables and Disbursement Services, the payment will, whenever possible, be disbursed in the required method. Should there be a charge for such a disbursement method, the amount will be charged to the same organization code as the invoice.
OP-D-2-C6 BLANKET PURCHASE ORDERS
Blanket purchase orders are set up to pay numerous small, consumable purchases to the same vendor. Blanket Purchase Orders must be monitored by the budget manager to ensure that sufficient balances are kept on the blanket and that it is being used as intended. For additional information on Blanket Purchase Orders, please see Purchasing’s website.
OP-D-2-C7 CONFIRMING PURCHASE ORDERS
When a department purchases an item bypassing the purchasing system and it is determined that a purchase order should have been issued, a confirming purchase order must be requested from Purchasing. To request a confirming purchase order, submit a general requisition marked "Confirming" and complete a Confirming Order Justification Form, attach this completed form to the invoice and forward these documents to Purchasing for their review. It must be clearly stated on the requisition that the items have already been received. For additional information on Confirming Orders please see Purchasing’s website.
OP-D-2-C8 NON-TRAVEL REIMBURSEMENTS
In an emergency or when traveling for the University, it may become necessary for a faculty/staff member to pay for materials or services from their personal funds with the expectation that they will be reimbursed by the University for the purchase. The Purchasing Services Department requires that requests for reimbursement in excess of $25 must include a justification as to why the University's purchasing system was not used and what steps will be taken to ensure that the purchasing system will be used in the future. If it is deemed that the purchase is improper, the invoice will be returned and the charges will be borne at the personal expense of the individual making the purchase. Therefore, it is important that prior to the purchase, the individual seek confirmation that the purchase is in fact, appropriate for reimbursement by the University. A list of expenditure guidelines is under construction and will be published soon at OP-D-2-C16.
In the event that the faculty/staff member seeks reimbursement from the University, the request must be entered in OMNI in the Travel module as a non-travel reimbursement. Supporting receipts should be submitted to Payables and Disbursement Services via fax at (850) 645-9501.
When a department returns merchandise for credit, Payables and Disbursement Services need to be notified to expect a credit memo. If the credit memo is issued on a purchase that was originally made from a blanket purchase order, the credit memo will be applied to the next purchase against that purchase order. If it is a regular purchase order, it will be determined if there will be additional purchases from the vendor or if a refund check needs to be requested. The refund check will be deposited to the account charged with the original purchase.
OP-D-2-C10 PURCHASE ORDER MONITORING
Monitoring of purchase orders is an essential procedure. Budget account managers should periodically perform a status check on open purchase orders and may contact Payables and Disbursement Services for further information on open items.
A. If the department has no information available, the department should contact the vendor to determine the status of the order.
B. If delivery has been made but no invoice received within a reasonable time, the department should request an invoice from the vendor in order to take advantage of discounts.
C. In either case, follow-up should continue until the transaction has been completed.
OP-D-2-C11 INTERDEPARTMENTAL TRANSACTIONS
There are two common types of Interdepartmental Transactions. One is the Interdepartmental Requisition, commonly referred to as an IR. The other is the Expense Transfer, commonly referred to as an ET.A. Interdepartmental Requisitions (IR)
Interdepartmental Requisitions are journal entries used to record sales of good and services between two FSU departments, i.e., it records revenue to the selling department and expense to the buying department.
The Interdepartmental Requisition and Journal Entry Form (IDJE) (GA-01) is to be used by the buying department to requisition goods or services from FSU interdepartmental activities. The buying department fills out all appropriate fields pertaining to the purchase of the goods or services including the quantity, description and unit price of the goods or services being requested.
The form is then sent to the department providing the goods or services (the selling department) to complete the form and verify the request. Once the IDJE form has been completed it will be sent to General Accounting to create the appropriate journal entries; charging the buying department’s budget for the purchase and creating revenue for the selling department.
Purchases from departments which are part of Business Services, e.g., Printing Services, Computing Center, Bookstore, and Postal Services, are processed directly by Business Services and do not need to be sent to General Accounting. Chemistry and Biology stockroom purchases are also processed directly by the selling department and are forwarded to General Accounting by the selling department to be posted.
In all cases, if the amount of the requisition is $1,000 or more and references a contract or grant, the requisition must be approved by Sponsored Research. The IDJE must have an original signature of an authorized signer for the buying department or project. E&G budgets (110, 210, 140 and 240) cannot deposit revenue; therefore, they cannot be selling departments. Selling departments will typically be auxiliaries (3XX) or activity funds (6XX).
B. Interdepartmental Expense Transfers (ET)
The Expense Transfer and Journal Entry form (ETJE) is used to provide flexibility for University departments to authorize various interdepartmental transactions unique to the University and also to make corrections to the General Ledger as needed. This action permits accurate cost records to be maintained at the organizational code level.
The Interdepartmental Expense Transfer document should be used only when the Interdepartmental charge is an expense transfer to reimburse for charges incurred by one department on behalf of another. The expense transfer must occur in the same fiscal year as the original charge in order to zero out the effect and not be in violation of the budget process; both the charge and credit must bear the same category as the original expenditure. This type of transaction should not be charged against encumbered funds. In no case may the expense transfer take place prior to the original transaction being recorded in the General Ledger, nor may the transfer be made to a department other than the one from which the expenditure was originally made. General Accounting will verify all original transactions referenced to ensure compliance with this policy.
Documentation of an Expense Transfer must contain evidence that is appropriate. Reference must be made to the original expenditures supported by the original journal, voucher, or expense report number and justification for the transfer. In addition, documentation supporting the original expenditure such as a copy of the Expense Journal page should be attached to the Expense Transfer.
Expense Transfers involving a contract or grant must be approved by Sponsored Research no matter what the amount.
OP-D-2-C12 AUTHORIZED SIGNATURES
The authorized signature may be that of:
A. A department head, project leader or principal investigator.
B. A dean or division head in situations where spending authority has not been delegated to the department heads.
C. Any employee (except for travel) designated and authorized in writing by the department head or project leader.
The detail of authorized signers for each department is controlled by departments and the Office of Budget and Analysis, who maintains this information within OMNI. Departments must update their authorized signers in OMNI by submitting an FSU Department ID Form to the Office of Budget and Analysis based on any changes in departmental personnel that would invalidate the original list. The form is sent to Purchasing in order to update the appropriate approver in their OMNI workflow.
All persons listed for a department are assumed to have equal authority over expenditures unless otherwise specified on the authorized signature list. Questions relating to this policy should be directed to the Office of Budget & Analysis.
Initial subscription purchases may be processed on a General Requisition or a Payment Request Form (PA-4). For renewals, invoices can be processed along with a properly completed Payment Request Form.
When using an overnight delivery service, it is important that the vendor lists the department to be charged on its air bill. When the department receives the invoice, a Payment Request Form must be attached.
If a department uses overnight delivery service on a regular basis, funds should be encumbered and a blanket purchase order set up through the Purchasing Department.
OP-D-2-C15 SPECIAL HANDLING REQUESTS
The special handling of checks is available to departments when circumstances necessitate other than normal processing by mail. If an unencumbered disbursement is being paid, Section 2 of the Payment Request Form must be completed. If a purchase order is being paid, it will be necessary to notify the appropriate processor in Payables and Disbursements.
OP-D-2-C16 EXPENDITURE GUIDELINE
These guidelines were developed to assist departments in making sound purchasing decisions.
