Purchases not made according to the College's approved purchase procedures require approved justification before payment can be made. If an item to be submitted to the Accounts Payable Office for payment requires justification, complete the justification form and attach it to the front of the item to be paid. Forward it to the Budget Manager and to the Dean for approval. The justification must be signed and approved for payment by the President before payment can be made. If required justification is not submitted, the Accounts Payable Office will return the item in hand mail to you with the justification form attached. This could delay items being paid.
Descriptions of the unapproved purchases requiring justification, and how to avoid them, are as follows.
PRIOR YEAR PURCHASE
All purchases are to be paid for within the fiscal year in which the purchase took place (date goods received) or services were performed. (The fiscal year of the College is October 1 - September 30.) Any items sent for payment in the following fiscal year are considered a violation of Generally Accepted Accounting Principles; therefore, a completed justification form is required in order for payment to be made.
This applies also to budgets of which the fiscal year differs from the fiscal year of the College. For example: a grant's budget year is September 1 to August 31. That budget would need to submit invoices for items received in September for payment to the Accounts Payable Office within the month of September. Invoices must be submitted early enough for payment to be made in the month of September. All budgets must comply with the fiscal year policies of the College.
In order to avoid the justification form, submit all items received within a fiscal year for payment within that same fiscal year. If you know items received in the current fiscal year will not be invoiced until the next fiscal year, the Budget Manager should contact the Coordinator of Financial Services so that she may accrue the items. A fund two budget can be accrued if it does not end on September 30. A justification is not necessary if the purchase has been accrued.
PURCHASE MADE WITHOUT AN APPROVED PURCHASE ORDER
Purchase orders are to be dated before, or the same date as, order dates or the date services take place. Goods and services are to be purchased with an approved purchase order, work order, or petty cash voucher. Purchases in violation of this policy are considered an unapproved purchase; therefore, a completed justification form is required in order for payment to be made.
In order to avoid the justification form, do not order goods or services without an approved purchase order, work order, or petty cash voucher. Purchase orders are considered approved on the date signed by the Purchasing Agent.
To insure you will have a purchase order to cover annual invoices that arrive such as memberships, maintenance agreements, and subscriptions, request purchase orders for these annual expenses at the beginning of a fiscal year. When entering the requisition, enter "do not mail."
If somehow goods were ordered and received without proper approval, you may return the goods to the vendor. Obtain a credit memo for the full amount of the purchase. Request and receive the proper approval to order the items and receive the items with an order date after the date which approval was given.
If you would like to order an item for preview, first request a purchase order. When entering the requisition, enter "for preview-do not mail." If you decide to keep the item, you have a purchase order to pay the invoice. If you return the item, you can cancel the purchase order and the money will return to the budget.
PURCHASE AMOUNT EXCEEDS AMOUNT APPROVED
An order is placed to a vendor by means of a purchase order, which is approved by the Purchasing Agent. An overage of 10% of the purchase order amount is allowed. This allowance is given to cover price increases and unexpected shipping or freight charges. The allowance is not given in order to purchase additional items or services. Any amount over the 10% allowance or any item purchased but not listed on the purchase order is considered an unapproved purchase; therefore, a completed justification form is required in order for payment to be made.
In order to avoid the justification form, use current prices when requesting a purchase order. If you must estimate cost, estimate high. After the invoice is paid, any excess money that was encumbered will be returned to the budget.
If your purchase exceeds the approved amount on the purchase order, you may return the item purchased to the vendor. Obtain a credit memo for the full amount of the purchase. Request the Purchasing Agent void the purchase order. Request a purchase order be issued for the correct purchase amount.