This Policy outlines the responsibilities and procedures required when making purchases with University funds. It applies regardless of the funding source. The University uses a decentralized purchasing process, allowing its departments to make purchasing decisions in accordance with their specific needs, and in alignment with their budgets. As with all expenditures, anyone making purchases with University funds is obligated to use stewardship, exercise ethical behavior, comply with government regulations, and provide proper transaction documentation and recording. Area Vice Presidents may impose additional restrictions than those outlined in this policy.
Authorization Limits and Purchasing Methods
Department chairs and budget directors have authority to make purchases on behalf of the University for goods and services under $1,000. Purchases under $1,000 may be processed with a purchase order or university issued credit card. Please refer to the Policy for Credit Card Program for more information on using the University credit card, and what restrictions apply.
Purchases that are $1,000 and over require a university purchase order. This means that if the vendor is going to deliver materials or render services in advance of receiving payment, a purchase order must be issued. These purchases also require the approval of the area Vice President, and purchases over $10,000 also require the approval of the President.
Exceptions are generally made for utilities, lease and maintenance contracts and debt payments where services may be engaged by contract. The Policy for Contracts provides information on when written contracts are required. In addition, situations where the University must pay in advance of delivery of services or materials are not appropriate for purchase orders; examples are subscriptions, conference registration fees, and membership dues (in these situations the University is committing to the purchase by tendering payment via a check request).
Prior to committing the University to a purchase there should be a reasonable estimate of the cost. If the price is not published a vendor can provide a quote. Include estimated shipping costs on the purchase order as well. Invoices that come in over the amount of the purchase order require additional approvals.
While not mandated, except as described below under “Purchasing Standards for Purchases made with Federal Funds”, competitive quotes from vendors handling the same or similar goods and services should be secured whenever possible to ensure the University receives quality merchandise and services at the best value.
The following types of purchases have some additional requirements as described:
- ARAMARK – Catering purchases from ARAMARK require a purchase order. Contact an ARAMARK representative or Accounts Payable for more information.
- Awards/Prizes & Gifts – Expenditures for awards/prizes & gifts to staff and students are covered in Policy for Awards/Prizes and Gifts. Purchases of awards/prizes & gifts require prior approval from area Vice President.
- Branding – Purchases of T-shirts and other items that have St. Mary’s brand/logo on them must be from a vendor licensed with St. Mary’s. The link to this vendor list is located on Gateway under the Finance section.
- Technology Related Equipment – Purchases of technology related equipment and software must be coordinated through Information Services. Technology related equipment must be processed using a purchase order and will be routed through Information Services for approval. Software $250 and over must be processed using a purchase order as well. The University does not permit purchases of computers and related equipment and software, $250 and over, with a University credit card or other form of payment to be reimbursed to the buyer, such as personal credit cards, checks or cash. Please also refer to the Policy for Information Resources Acquisition.
- Furniture – In addition to the purchasing process described above, purchases of furniture should follow the guidelines set forth in Facilities Furniture Disposal and Acquisition Procedure. This guide is available on Gateway, or by contacting Facilities.
- Services – Payments for services must meet certain requirements, and are covered in the Policy for Paying Independent Contractors.
- Stationery – Letterhead, envelopes and other items that have the University logo should be processed through Communications, and require a purchase order.
- Travel – Travel related expenses are covered in the Policy for Travel.
Purchase Orders are processed, prior to the purchase being made, through Gateway. Instructions on completing a purchase order can be found in the Banner Finance Self Service Guide. To access the Finance Self Service functions, contact the Finance Office. Purchases should not be made until the purchase order has been approved by all required approvers. Requests for an official printed purchase order can be made through the Accounts Payable Office. Requests for new vendors must be sent to the Accounts Payable office. A W-9 form is required to be completed by all new vendors prior to them being set up.
Business Expense Reimbursements
University employees must always be mindful of good stewardship and the University business purpose when using University funds. Reimbursements may be requested for reasonable and necessary expenses incurred by individuals in the conduct of official University activities for expenditures that do not fall within these purchasing procedures. Examples would include:
- Reimbursement for a business-related meals: For business-related meal reimbursements, the original itemized meal receipt must be attached to the form. The names of the individuals attending the meal, along with their affiliation with the University, and the business purpose must be written on the form or receipt. “Business Meeting” is not a valid business purpose; need to include the general topic of discussion. Only reasonable tips (15-20%) will be reimbursed. Tips in excess of 20% are considered personal expenses and is not reimbursable.
- Reimbursement for mileage that is not travel related: The University permits the auto mileage allowance published annually by the IRS. The rate is available on the IRS website or from the Accounts Payable office. A Mileage Log & Reimbursement Request showing the dates, destination, and mileage incurred or a mileage calculation from MapQuest, along with the business purpose for the trip is required. Employees are reimbursed for workday travel in excess of regular round-trip commute from home to St. Mary’s University. Departments who reimburse mileage for work-day automobile travel should maintain records of the employee’s round-trip commute to ensure accurate calculation of the reimbursement. Traveler must carry at least the minimum legal limit of liability insurance required by law when using personal vehicle for University business.
- Reimbursement for supplies or materials purchased under the PO requirement of $1,000: For reimbursements of supplies or materials under $1,000, the original receipt must be attached to the Check Request Form, and required approvals obtained.
Reimbursements should not be requested for the following. These purchases should be made using the purchasing process as described above.
- Payment for services
- Payment for technology related equipment and software
- Other purchases $1,000 and over
Reimbursements are approved by individuals with the proper budget authority and are issued to the individual that has incurred the expense. The approval cannot be by the individual requesting the reimbursement. The individual’s Dean or VP would have authority to approve such a request.
Payment requests must be submitted to the Accounts Payable Office by 5:00 on Friday in order to be paid the following Friday. To ensure prompt payment and to avoid late-payment penalties, all invoices should be mailed directly by the supplier to the Accounts Payable Office. Vendor invoices will be paid according to the terms or due date noted on the invoice. For vendor invoices with no terms or due date listed on the invoice, the net terms of 30 days that is listed on the Purchase Order will be followed. For other payments such as employee reimbursements, memberships, registration fees, etc… where the payment is required prior to receiving the good or service, the check will be issued on Fridays, for requests received the previous Friday by 5:00 p.m.
Conflict Of Interest
As stated in the University’s Code of Business Conduct, “Employees must disclose to their immediate supervisor any financial or other relationships with suppliers, agencies or competitors they may have and the reasons they believe such a relationship does not violate this Code. In making such a disclosure, employees must follow this code as well as guidelines contained in the University’s Personnel Manual… After such a disclosure is made, the situation will be reviewed by the supervisor and appropriate University Officer and a decision will be made in writing as to whether the disclosed item constitutes a conflict of interest and requires a waiver of the Code, termination of the activity, or disciplinary action. Because of the possibility of severe consequences, employees are encouraged to request pre-clearance on any potential conflicts of interests prior to engaging in the relationship or transaction.”
University Purchasing Standards for Purchases made with Federal Funds
St. Mary’s University will be implementing new federal regulations, known as Uniform Guidance, and replacing OMB Circular A-110. The University has elected to utilize the grace period and delay this implementation until June 1, 2018. In the interim, the University’s existing policies and procedures and the OMB circulars will continue to apply.
Purchases funded by federal grant funds must adhere to regulations found in OMB Circular A-110. Circular A-110 explains administrative requirements for colleges, universities, hospitals, and other non-profit organizations with federally funded grants and agreements. OMB circular A-110 sections 40 through 48 identifies required procurement standards. Detailed requirements can be found on the OMB website.
Purchases made with Federal funds are reviewed for compliance with the Federal Acquisition Regulation and the Office of Management and Budget Circular A-110. The Purchasing Department is required to retain back-up documentation, such as bids, quotes, and cost/price analyses on file for Federal auditors.
All procurements by the University with Federal funds must adhere to the following standards:
- No employees, officers or agents shall participate in the selection, award or administration of a contract or vendor where, to their knowledge, their immediate family, partners, or organization in which they or their immediate family or partner has a financial interest or with whom they are in negotiation or have any arrangement concerning prospective employment is involved. The University’s officers, employees or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from vendors or potential vendors.
- All procurement transactions will be conducted in a manner to provide, to the maximum extent practical, open and free competition. In order to ensure objective vendor performance and eliminate unfair competitive advantage, vendors that develop or draft specifications, requirements, statements of work, and invitations for bids and/or requests for proposal should be excluded from competing for such procurements. Awards shall be made to the vendor whose bid/offer is responsive to the solicitation and is most advantageous to the recipient, price and other factors considered. Solicitations shall clearly set forth all requirements that the vendor must fulfill in order for his/her bid/offer to be evaluated by the recipient. Any and all bid/offers may be rejected when it is in the recipient’s interest to do so.
- University purchasing agents shall avoid purchasing unnecessary items.
- Where appropriate, an analysis shall be made of lease and purchase alternatives to determine which would be the most economical, practical procurement.
- Solicitations for goods and services shall provide for all of the following:
- A clear and accurate description of the technical requirements for the material, product or service to be In competitive procurements, such a description shall not contain features that unduly restrict competition.
- Requirements which the bidder/offer must fulfill and all other factors to be used in evaluating bids or proposals.
- A description, whenever practical, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.
- The specific features of “brand name or equal” descriptions that bidders are required to meet when such items are include in the solicitation.
- The acceptance, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement.
- Preference, to the extent practicable and economically feasible, for products and services that conserve natural resources and protect the environment and are energy efficient.
- Positive efforts shall be made to utilize small businesses, minority-owned firms, and women’s business enterprises, whenever possible.
- The type of procurement instrument used (e.g., fixed price contracts, cost reimbursable contract, purchase orders, incentive contracts) shall be determined by the University, but shall be appropriate for the particular procurement and for promoting the best interest of the program involved.
- Contracts shall be made only with responsible vendors who possess the potential ability to perform successfully under the terms and conditions of a proposed procurement. Consideration is given to such matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources.
- Some form of price or cost analysis should be made in connection with every procurement action. Price analysis may be accomplished in various ways including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and allowability.
- When purchasing with Federal grant funds, procurement records and files for purchases in excess of $150,000 shall include the following:
- Basis for vendor selection;
- Justification for lack of competition when competitive bids or offers are not obtained;
- Basis for award cost or price.
- Contracts shall be administered in order to ensure vendor conformance with terms, conditions, and specifications of the contract, and to ensure adequate and timely follow-up of all purchases.
- The University cannot conduct business with a company that has been suspended or debarred. This includes procurement contracts for goods and services that are expected to equal or exceed $25,000. The University is required to verify that the vendor is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished through the SAM.gov website.