Description of Risk
If campus units do not follow good purchasing practices, they may violate state laws, rules, or regulations, and expend funds in an uneconomical manner.
Procurement and Business Services, under the direction of the Associate Vice President for Financial Services, is responsible for the procurement of all materials, supplies, equipment and services required by all departments and units of the Georgia Institute of Technology. This responsibility includes, but is not limited to, the following:
- Establishing all purchase contracts, except rentals, purchase of real property, or facility contracts (architects, construction, etc.) entered into on behalf of the Institute for all supplies, materials, equipment, and services. These include, but are not restricted to, equipment, supplies, printing, surveys and consultant services.
- Assuring that all purchases made are properly authorized and result in proper quality goods or services being delivered to the designated location, at the right time, in the right quantity, and at the best possible cost.
- Maintaining and operating a Central Receiving Department which has the responsibility of receiving, checking, and redelivery of supplies, equipment, and materials ordered for the campus that are not shipped directly from the vendor to the department requisitioning the order. This unit also controls the return of merchandise for reasons as necessary.
Guidance for the performance of these functions and responsibilities is provided from several sources.
The primary authorities are:
- The Department of Administrative Services, the Agency empowered by the Purchasing Act, State of Georgia Annotated Code 50-5.
- State of Georgia Agency Purchasing Manual
- State of Georgia Vendor Manual
- Board of Regents Procedures Manual, at http://www.usg.edu/business_procedures_manual/section3/
- Georgia Institute of Technology Policy Library, Business and Finance, Purchasing and Account Payable can be found at http://www.policylibrary.gatech.edu/business-finance/purchasing-and-accounts-payable
- Institute Policies and Procedures regarding PCards can be found at http://www.policylibrary.gatech.edu/business-finance/procurement-cards-pcard
- Institute Policies and Procedures regarding Petty Cash can be found at http://www.policylibrary.gatech.edu/business-finance/petty-cash
The importance of this subject is to ensure that campus units understand and follow the appropriate procurement procedures. There are several types of procurement that may be accomplished by campus units.
- Procurement card (PCard)
- Departmental Purchase Order (DPO)
- Petty Cash
- Those via contract through procurement services.
The procurement source utilized is based upon the dollar amount of purchase and/or type of purchase.
- Gain a working knowledge of procurement policies and procedures
- Attend procurement training
- Develop internal policies and procedures on procurement and disseminate.
- Empower PCard Coordinators with the responsibility and authority to oversee this process
- Empower one person as the unit’s central authority for handling invoices and DPO’s
- Empower one person as the unit’s petty cash fund custodian
- Ensure that petty cash is adequately secured
- Petty cash should be subject to proper supervisory oversight
- Retain all appropriate supporting documentation to validate the authenticity of the transaction and to make it available for audit and/or review if requested
Delegate and Communicate
Unit head should designate an individual within the unit as the unit’s Departmental Procurement Coordinator, responsible for the overall process; a PCard Coordinator, a Petty Cash Custodian, and communicate this decision to the entire unit. Delegation of this authority does not relieve the unit head of ultimate responsibility for this activity. He or she should develop managerial assurance that the unit is in compliance with internal and Institute policies and procedures regarding these areas. This may be accomplished by instituting a feedback mechanism so that regular reports are directed to the unit head on a periodic basis. The unit should examine the purpose of the petty cash fund annually. The examination should answer such questions as: Why do we have petty cash? Could we accomplish the same thing using the PCard system? Are the funds properly secured? Is the dollar amount of the fund too high or too low? Who is handling the fund? Should this responsibility be rotated?
All procurement activity should be reconciled to the accounts payable information for the unit.
While the Institute requires PCard Coordinators to attend formal training, training for all PCard holders is important. Online training can be found at: http://www.trainsweb.gatech.edu