Accounts Payable

Procedures Manual

AUTHORITY, SCOPE AND RESPONSIBILITIES

The Statutes of the State of Wisconsin, Section 16.71, provide that the Department of Administration (DOA) shall have sole authority for the purchase of commodities and contractual services for all state agencies. The responsibility of this function has been given to the State Bureau of Procurement. The State Bureau of Procurement has authorized certain state agencies to operate procurement offices to serve their purchasing requirements. This delegation is contingent upon the agency following the policies and procedures established by DOA. The Purchasing Office of UW-Eau Claire, functioning under this institution.

GENERAL POLICIES

Procurement procedures established by the Department of Administration require that all purchasing transactions of $5000 or more be competitively bid or a bid waiver be obtained prior to issuing a purchase order. Waiver type items include subscriptions, memberships, maintenance agreements, etc. If biddable, sufficient lead time to accomplish this must be allowed depending on estimated total dollar amount of purchase requisition. (See Bid Levels and Lead Time, Section VIII).
No purchase order will be issued prior to receipt of a requisition by the Purchasing Office. Requisitions are processed in order of receipt at the Purchasing Office. In case of emergencies, authorization to purchase may be obtained by calling the Purchasing Office or requisitions may be walked through.
The Purchasing Office is responsible for bid awards based on the consideration of quality, suitability, price, delivery and prior performance of vendors. If an alternate brand or model is bid, the department staff will be given the opportunity to evaluate items before the purchase order is issued. Services rendered the requisitioning department by firms in demonstrations and detailing do not constitute an obligation by the University. Departmental personnel are not to divulge information concerning bids or purchases with persons outside the University until a purchase order is issued.
Personal Purchases - State law and ethics prohibit the Purchasing Office from acting on behalf of faculty and staff members in purchasing from funds other than those administered by the University.
Unauthorized Purchases - Whenever faculty or staff members procure supplies, materials, equipment, or contractual services by other than established procedures, this procurement may be void and the individual may be liable for the cost. All purchases, using state accounts, are to be processed in accordance with established procurement policies.
Surplus equipment and supplies are available from other campuses and from the Federal Property Program. A list of surplus property is available from the Purchasing Office.

LOW DOLLAR ORDERS

Departments are authorized to type, sign, and distribute orders for services and supplies under $500.00, excluding freight charges. These are called low dollar orders. Order forms are available from Central Stores. If possible, we are mandated to buy from Wisconsin Small Businesses, Minority Businesses, Sheltered Workshops, State Bulletins, or Madison contracts. No printing, products for resale, or temporary services may be ordered on a low dollar order. Placing of multiple low dollar orders for like products for the purpose of avoiding the regular purchase order process is prohibited. Low dollar orders placed in violation of these limits may become the personal business of the originator.
The following items must be included when preparing the LDO:
1. Date of order
2. The account number(s) to be charged and the dollar value associated with each account.
3. A complete mailing address of the vendor.
4. Shipping information. This should be the last name of the person placing the order, the department name, the building and room number to contact for additional ordering information.
5. A price source. Whenever possible, this should be a telephone or written quote, renewal notices or copies of any other sources you checked for pricing.
6. Complete and attach forms required by the vendor, such as subscription and registration forms.
7. Include quantity and unit, description of material with manufacturer's model number, physical description or description of services to include what is to be done, where, by whom and for how long. Complete extensions on multiple items and total the order.
8. The department chairman, dean, or director of the department or the account responsible person is authorized to sign the order. Remove the original order and send it to the vendor along with any attachments required by the vendor. Pull the department copy (green), and forward the pink copy to Accounts Payable.
9. If a payment must accompany an order, type "CHECK WITH ORDER" in the body of the order. Pull the department copy, attach two copies of any supporting documentation to the rest of the order and forward to Accounts Payable. All check-with-orders require a written price source from the vendor. Accounts Payable will not send a check without this information. Exceptions should be reviewed with the Accounts Payable Department.
10. If there is a change to a low dollar order (cancellation, change of vendor, price change, account change, etc.,) notify Accounts Payable.
11. The LDO is accepted at the University Bookstore, but they request that they not be called for phone quotes. Instead, list the items desired without a price. Forward all three copies of the order directly to them. They will fill the order, attach documentation of the prices to each copy of the order, and forward the departmental copy of the order to the department and forward the pink Accounts payable copy to Accounts Payable.
12. NEVER use the low dollar order form as a means of approval when submitting an invoice to Accounts Payable for payment. Complete and attach a Purchase Requisition form to the invoice regardless of the dollar amount of the invoice. Low Dollar Orders are to be used ONLY for ordering materials and supplies from vendors.

PURCHASE REQUISITIONS

Requisition for Food Service From Campus Vendor

When catering services are needed from the campus food service vendor, a food service requisition must be prepared in advance of the event and forwarded to Accounts Payable for approval. An approved copy of the requisition will be forwarded to the vendor by Accounts Payable authorizing them to provide the service requested and invoice the University.
NOTE: Completion of the requisition does not automatically secure the arrangements. You must personally contact the food service catering manager.
The vendor has been instructed to send all original invoices directly to Accounts Payable for payment processing. This is mandatory in order to allow the University to comply with Prompt Payment legislation that stipulates the University will pay its invoices within 30 days. Failure to do so means the University must automatically add an interest amount to its payment. The law does, however, provide the University with some flexibility in placing holds on invoice payments when there is a justification to do so, but not unless the vendor has been specifically authorized to provide a service or supply. The requisition serves this purpose.
Account Payable will send the requisitioning department a copy of the invoice that is stamped with a statement advising them that the invoice is in the process of being paid unless we are notified with 7 calendar days of any problems concerning the invoice. Contact with Accounts Payable will constitute a good faith dispute and the payment process will be suspended until the problems are resolved.
Requisition forms are available in the Accounts Payable department.

Requisition for Contracting For Personal Services

Federal and State laws require the University of Wisconsin System to report many payments for services to the Internal Revenue Service, the Wisconsin Department of Revenue, and the individual(s) receiving the payment. In some instances, the University is also required to withhold federal or state income taxes from payments.

UW-Eau Claire Employees - When contracting for personal services, consideration must first be given to utilizing the services of employees of the University and the University System. Employees of UW-Eau Claire must be paid on payroll. To initiate payment, contact the Academic Affairs Office. Business-related travel expenses will be reimbursed on a travel expense report and in compliance with State travel regulations.
UW System Employees - The services of individuals at other campuses within the UW System are secured via an Inter-institutional Agreement form or a Personnel Action Request form. Contact Academic Affairs for assistance. When an Inter-Institutional Agreement form is used, payment is made on his/her home payroll with reimbursement made by UW Eau Claire to the institution upon receipt of an invoice from their Business Office. The Accounting Office in Business Services can provide assistance in completing the Inter-Institutional agreement. If services are secured via a Personnel Action Request, payment is made via UW-Eau Claire's payroll. Business-related travel expenses will be reimbursed on a travel expense report and in compliance with State travel regulations.
Employees of Other State Agencies - When contracting for the services of an individual who is an employee of another State agency (e.g. Department of Public Instruction, Department of Natural Resources, Department of Transportation), an Employee Interchange Agreement when compensation for services and/or travel expenses are involved. Payment to the individual will be made on his/her home agency's payroll with reimbursement to that agency upon receipt of an invoice. The completed agreement is to be forwarded to the employee for his/her signature. A copy of the fully signed agreement must be returned to the University and forwarded to Accounts Payable along with the invoice from the home agency and a purchase requisition authorizing payment from the proper budget. Travel expenses will be reimbursed on a travel expense report and in compliance with State travel regulations. Forms are available in Accounts Payable.
Students - Currently enrolled students must be paid on student payroll for their services. Students not attending summer school but continuing on in the fall must also be paid via student payrolls. Contact the Payroll Office for additional information and assistance.
Professional Entertainers - Formal contracts must be prepared and signed by representatives of each party. Entertainment contracts for under $2500.00 are to be signed by the Director of University Centers or his/her designee regardless of where on campus the entertainer performs. This department, because of its experience in negotiating contracts of this nature, possesses the expertise in assuring that contracts of this nature contain no language detrimental to the University. Contracts for $2500.00 and over are to be signed by the Assistant Chancellor of Business Services. Payments are made using the signed contracts.

The State of Wisconsin requires that the University withhold 6% of the total "contract price" as entertainer tax on payments to non- resident entertainers and public speakers unless the entertainer has filed a surety bond or cash deposit to the Wisconsin Department of Revenue in advance of the performance date. If the bond or deposit has been paid, the entertainer must provide the University a copy of the Wisconsin Department of Revenue Form WT-11 which indicates that 6% of the "total contract price" was paid.
Additional information can be obtained by contacting the Accounts Payable supervisor.

Others - For amounts of $500 and less (Excluding itemized travel)

Payments to other individuals for $500 or less excluding itemized travel shall be made on a Payment to Individual Report . If the University agrees to reimburse travel expenses, the expenses may be included on the PIR form. If they are itemized, substantiated by receipts and in compliance with existing travel regulations applicable to UW/State employees, they will not be reported to State and Federal tax offices.

Others - For Amounts More Than $500

When contracting for personal services of other individuals for more than $500, a determination must first be made as to whether or not an employee-employer relationship exists. An employee-employer relationship generally exists if the University has the right to control and direct the individual as to what should be done and how it should be done. The Internal Revenue Service has published a ruling that lists 20 factors to consider in the determination of the amount of control the University has. Some of the key factors include whether the person has an opportunity for profit or loss, whether payment is made by the job or by the month/hour, whether the person makes his/her services available to the public, whether the person can work for more than one firm at a time, etc. Generally, an employment relationship exists if the University directs and controls the individul in the way he/she works, both as to the final results and as to the details of when, where, and how work is to be done. The University need not actually exercise control; it simply must have the RIGHT to do so. These IRS guidelines are available in Financial Policy and Procedure Paper #31.
If the University determines that an employee-employer relationship exists, the individual(s) must be paid on payroll. If the department wishes to cover any travel expenses to and from Eau Claire and/or any living expenses while in Eau Claire, the costs of these expenses will need to be estimated and the value of these expenses must become part of the fee paid to the recipient via the payroll. Travel expenses incurred by the individual in the conduct of business for the University during his/her employment period can be reimbursed via a travel expense report form and in compliance with State travel regulations.
If the University determines that no employee-employer relationship exists, then the individual is an independent contractor. Some services provided by independent contractors represent special talents needed by the UW System on a temporary basis to fulfill its mission of instruction, research and public service. The uniqueness of the talent or its availability will preclude the ability to compete for the service. Some of these specialized services may be provided by an individual profession, a hospital, a school, a clinic a business, etc. Other examples of independent contractors include speakers, guest lecturers, consultants, contest judges, etc. If an individual has a federal identification number (not to be confused with his social security number), he/she can be considered an independent contractor. A Requisition to Contract For Personal Services and a PIR form are to be completed and forwarded to Accounts Payable. PIR forms can be obtained from the Accounts Payable Department.
The requisition asks several questions about the nature of the service and the individual's role in the department in an attempt to assure compliance with the IRS rulings. When the service IS determined to be a unique, noncompetitive activity supporting instruction, research, or public service, the requisition will be approved the payment is equal to or greater than $5000, an Academic Support Service Agreement form will be prepared by Accounts Payable and forwarded to the individual(s) for signature. Upon return of the signed agreement, payment will then be made from the PIR form unless the individual(s) prefers to submit an invoice. Purchase orders will be issued for services that NOT unique, noncompetitive activity supporting instruction, research or public service. Payment will be made upon receipt of an invoice; the PIR form can not be used.
Care and attention must be given to the preparation of the PIR form. Because these payments are reported to the State and Federal tax offices, the accuracy of this data is crucial. Provide full names. Eg. Type Patrick or Patricia instead of Pat; Gerald or Geraldine instead of Gerry, etc. More importantly, take care in obtaining and recording the social security number. These payments ultimately generate 1099's for the recipient. Carelessness with these numbers result in problems and frustration for the taxpayer.

Non-Resident Aliens - The rules regarding federal tax withholding on payments to nonresident aliens are varied and complex. It is mandatory for all nonresident aliens receiving payments to have a social security number (SSN) or an Individual Tax Identification Number (ITIN) in order to be granted any exemption from withholding. In some cases, payment may be exempt or subject to a reduced withholding rate if they have filed for an exemption on IRS Form 1001, 4224, or 8233. Form W-8 must be completed by all foreign nationals who are receiving payment for services performed in the United States. These forms are in limited supply in Accounts Payable. It is the responsibility of the individual to determine his/her own personal tax situation and file whichever form is necessary to receive an exemption from withholding where applicable. These forms must be presented with the PIR or federal tax will be withheld. Contact the Accounts Payable supervisor several days in advance of desired payment to a nonresident alien to assure the completion of the proper paperwork.

Requisitions for Other Services and Supplies

Purchase requisitions are generated by the department and are the instruments to be used by the Purchasing Office in generating purchase orders to be mailed to the vendors to formally order your desired goods or services. If possible, we are mandated to buy from Wisconsin Small Businesses, Minority Business, Sheltered Workshops, State Bulletins, or Madison contracts.
All purchase requisitions are to be mailed or delivered to Accounts Payable where they will be reviewed and either retained for processing or immediately forwarded to Purchasing for further processing. To expedite the processing requisitions, the following guidelines should be followed when completing the purchase requisition:

List any potential supplies, especially if the item(s) are unique to your department.
Complete "Price Source" section. Indicate year of catalog, or if vendor was contacted, date, and quoted price. If more than one vendor was contacted, enter information for each contact on the back of the requisition. If written price quotes are obtained, attach a copy to the requisition.
A complete description of the item(s) requested is required. Include brand, model, size, color, construction materials, etc., and catalog number if known. If no alternates will be acceptable, justification must be submitted with the requisition.
If order must be prepaid, a copy of the price source must accompany the requisition.
Supply information in the "Requested by" portion where the items should be delivered. Include name, room number, and building. The account number on the requisition designates to which department the purchase will be charged. The requisition must be signed by the appropriate budget authority.
Delivery requirement should be indicated by a calendar date with due consideration for lead time. Do not use "PLEASE RUSH". Lead time is the total of all the actions required in initiating the requisition, routing to Accounts Payable, in the mechanics of purchasing, and in the delivery time of the vendor. To this should be added a margin for unforeseen delays. While vendor delivery may not be known, the other actions are fixed and must be considered in departmental planning. (See Bid Level and Lead Time, Section VIII)
When capital equipment is to be traded in as part of the transaction, such equipment must be described and identified by the manufacturer's serial number and UW Eau Claire inventory number.
Auxiliary Material - Copies of all drawings, specification sheets, and correspondence pertaining to the transaction should be attached to the requisition. Any special information or instructions for the guidance of the Purchasing Office should be included.
The State Bureau of Procurement has established May 31st as the cutoff date for all purchase orders to be encumbered. This date will be used each fiscal year. Anticipated needs for the balance of the fiscal year must be requisitioned by that date. Purchase orders will be dated the day they are written. The date the purchase order is issued shall determine the fiscal year to which it will be charged.
When ordering items from the University Bookstore for amounts $500 and over, the requisition should be prepared as above. Upon receipt in Purchasing, it will be approved and forwarded directly to the University Bookstore. A copy of the requisition is sent to Accounts Payable to used in paying the invoice.
In the event you have an invoice in your possession that was not covered by a purchase order, prepare a purchase requisition and forward the invoice with the approved requisition to the Accounts Payable Department. The requisition will serve only as a means of approval for processing the invoice for payment. DO NOT prepare a low dollar order if the invoice is under $500. The requisition is to be prepared regardless of the dollar amount.

PURCHASE ORDERS

Commitments made under the procurement authority of the DOA are issued on the official State Purchase Order, Form AD-P-10. The purchase order issued by the Purchasing Office or any of its delegated areas is the authority given to the vendor to ship and bill the University for goods or services.
One copy of the Purchase Order is sent to the requisitioning department. The Purchase Order should be checked upon receipt and any changes required reported to the Purchasing Office. The Purchase Order should be used for all future references rather than the requisition.
The Purchase Order, upon acceptance by the vendor, becomes a contract. Any request for change, cancellation, or return of goods must be made through the Purchasing Office. Permission of the vendor is required and may be subject to a restocking charge.

Blanket Orders - Establish an account with a vendor and encumber funds that will be used to purchase miscellaneous materials and services during the fiscal year. These orders are limited to commodities other than those stocked by Central Stores and with a ceiling of no more than $500 per quantity of same item. All blanket orders are terminated June 1st and remaining funds are not carried over to the next fiscal year. Supplies must be received and invoiced before the end of the fiscal year in which the blanket order is issued.
Mass Encumbrance Orders - To reduce the number of purchase orders to be typed, Purchasing contractually establishes mass encumbrance orders for advertising, maintenance and repair, bus rental, and office supplies. NOTE: The purchase order numbers change each fiscal year and in some years, the contractor for office supplies also changes. Be sure to review the Appendix A yearly.
Trial Orders - Requisitions calling for trial arrangements must be documented by correspondence from the vendor, setting forth the terms of acceptance of return for full credit. Demonstrations of equipment need not be covered by a requisition and purchase order. Vendors should be advised that a demo does not obligate the University in any way and that no preferential treatment will be allowed.

Expediting - The Purchasing Office does not maintain a follow- up on delivery of orders. Any order will be expedited at the request of the requisitioning department.

PURCHASING CARD PROGRAM

The UW-Eau Claire Purchasing Card Program's purpose is to establish an efficient cost-effective method of purchasing and paying for small dollar (under $5,000) transactions within established guidelines. The program is designed to replace low dollar, best judgment, and blanket purchase orders. It is also designed to eliminate the use of petty cash for small dollar purchases and the use of personal funds that will have to be reimbursed. The purchasing card may be used at any merchant that accepts the card, except for those items exempted in the UW-Eau Claire Purchasing Cardholder Agreement.

INVENTORY

Inventory control of capital purchases has been established by the University to provide a record for insurance coverage, responsibility of custody, and administrative purposes. Equipment having a life expectancy of two or more years and a monetary value of $5000 or more are recorded and tagged by Inventory Control.
All transfers of equipment from one department to another must be reported to Inventory Control.

SURPLUS PROPERTY

Should a University department find that it has equipment, furniture or supplies that are surplus to their needs, the Purchasing department should be notified. The correct form to use when declaring surplus property is the Declaration of Surplus Property form. This form is available at the Purchasing Office. The responsible department should fill out the form as complete as possible, and return it to the Purchasing department. The department that is initiating the declaration of surplus should plan to store the items until they are notified by the Surplus department of relocation. At the present time the Surplus department has limited space for storing any surplus.
Upon receipt of the surplus form, the Surplus department will proceed as follows:

A current value is determined, if there is not a suggested price on the form.
Surplus items that are thought to be of use to other campus departments will be circulated by notifications in the University Bulletin, or sent to the primary administrative by of all departments via E-Mail. A list of "wanted items" is maintained in the Purchasing Office and is checked for any possible interest in the surplus. This surplus is available to any department that wants it on a first come, first serve basis.

For surplus being transferred that is valued at under $200, the receiving department is responsible for the pick up and the delivery of the surplus back to their location. A work order request to Facilities Management is necessary to have custodians move the surplus to a new location. If the items are valued at more than $200 each, the department that is surplusing the items may try to sell the surplus to another department. A transfer of funds should be done through the Accounting Department.
Surplus property that is not claimed by a campus department and is determined to have a potential value will be offered to all UW System schools. Letters of notification are sent to UW System Purchasing agents.
Surplus that is available after going though the above process will be handled in one of two methods:

If the original cost of the item is $10,000 or greater or if the original price was over $10,000 regardless of the present value, a Surplus Property Declaration/Disposal Report (DOA-3178) will be completed and processed through the State Surplus Property Program. Upon receipt of the Declaration/Disposal Report, the State will authorize the agency to make a disposal as proposed by the agency, or they will decide to handle the disposal through the State Surplus Program.
If the current value of the surplus item is less than $10,000 and if the original price was less than $10,000, the agency is authorized to dispose of state surplus property by means of "Best Judgment Disposal". The following methods of disposal shall be used in this sequence:

Sale to another tax supported unit including a school district.
Sale to a non-profit organization which is exempt from state sales tax.
Sale to the public through negotiated sale, auction, fixed price, or sealed bid. Public sale must be advertised.
Donation to a nonprofit organization, an agency, and other tax supported organization.
Destruction of property to meet security requirement or to eliminate a health hazard.
Disposal in a landfill.

NOTE: Donations of state property to private individuals, for profit organizations or state employees are prohibited.
Proceeds from the sale of surplus property will be deposited into a surplus property clearing account. Funds will then be transferred to the appropriate account based on inventory data and information provided on the Declaration of Surplus Property form. The amount transferred will be the sale price less any expense incurred by the Surplus department relating to the sale of item(s). The budget transfer will be made within 60 days of the sale or the receipt of payment.

Surplus Federal Property - Grant Recipients

Federal property is identified by a red tag that has the following imprint:

UWEC
FEDERALLY FUNDED

If the surplus is Federal Surplus Property, please indicate this information on the Declaration of Surplus Property form. The University will adhere to the notice requirements or procedures agreed upon at the time of the purchase, prior to disposing of federal property. Property ownership will be determined. If the grantor has given title to the University the State's disposal requirements then follow.

Do not, in any case, dispose of federal property before a surplus declaration form has been completed, sent to Purchasing and approval to dispose has been granted.

BID LEVELS AND LEAD TIMES

$500-$4999 - Award to vendor best able to supply after considering location, quality, price, specifications and delivery time.
$5000 - $24999 - comparison of three or more bids from at least three or more bidders whenever possible from:

Price Lists
Quotes on file
Phone or verbal quotes
Or written bids. A written confirmation of price must be on file.

$25,000 and above - Official Sealed Bid. A three week period must be allowed for bidders to respond.

CONTRACTS - COMMODITY AND SERVICE

UW-Eau Claire has several contracts with suppliers to provide services and commodities at discount prices. A sample listing follows: For further information or a copy of any of the contracts, please call the Purchasing Office.

Service Contracts - (Covered earlier in Section entitled Mass Encumbrances)

Coach Bus Service
Typewriter Maintenance Service

Commodity Contracts

General Office Supplies (Boise Cascade thru Central Stores)
Computer and Peripheral Equipment and Supplies (LTS)
Office Furniture (Madison contract)
Laboratory Supplies and Equipment (Fisher Scientific)
Audio/Video Supplies and Equipment (Madison contract)
Medical Supplies (Vendornet)
Parcel Package Service

UW EAU CLAIRE TRAVEL GUIDELINES

The travel guidelines are updated annually, at the beginning of the fall academic term.