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					Procurement Services

   The Procurement
   Process at Columbia
                       A live training class on
                       how to procure and pay
                       for goods and services
                       at Columbia University

The Procurement Process

   What this Class Covers

   This overview session will describe the
   procurement process at the University, including
   the various systems, basic procedural issues and
   important compliance considerations.

Class Topics
   The Purchasing Process
   Purchasing Compliance and Policy Issues
   Purchasing Office Website Tour
   AP Compliance and Policy Issues
   The Accounts Payable Process
   AP Website Tour
   Further Training Opportunities

   Procurement is Purchasing and Paying
    ◦ Purchasing is the process of awarding the purchase order
      and/or contract of specified goods or services to a vendor
      in order to obtain the best value. This process is
      administered by the University Purchasing Office, and
      often requires issuance of a Purchase Order , negotiation
      of an Agreement or use of a Purchasing Card in
      processing a transaction.

    ◦ Payments and disbursements are administered by
      Accounts Payable.

    ◦ When buying and/or paying for goods, you are required to
      comply with University Policies and Govt. Regulations.

   Purchasing Power – United We Stand
    University Spends More Than $1 Billion Per
The29%                             24%

          Year On Goods And Services

2%                                                               12%
                7%                                      10%
  Engineering and Research and Technology Based Services
  Financial and Insurance Services
  Healthcare Services
  Management and Business Professionals and Administrative Services
  Building and Construction and Maintenance Services
  Public Utilities and Public Sector Related Services
  Information Technology Broadcasting and Telecommunications
  Laboratory and Measuring and Observing and Testing Equipment

You are not alone in your purchasing habits. Most purchases
are not unique.

By leveraging our collective purchasing power, the University
community in any size department, can gain from the
greatest value – as long as we work together.

Class Topics

   The Purchasing Process
   Purchasing Compliance and Policy Issues
   Purchasing Office Website Tour
   AP Compliance and Policy Issues
   The Accounts Payable Process
   AP Website Tour
   Further Training Opportunities

The Department should:
   Identify and define the need for the good
    or service.

   Determine the best source of supply,
    preferably using a University-wide
    Purchasing Agreement in accordance with
    policy or bidding competitively. See
    Procurement Mechanism Guide

   Determine the appropriate purchasing
    mechanism: P-Card, EZPO, Central
    Purchase Order Requisition, Lease PO or
    Voucher Only (no PO Required) Check the
    Procurement Mechanism Guide.

   Coordinate sourcing activities through the
    Purchasing Department and maximize

Purchasing has developed resources that can assist you in your
  purchasing activities that can be accessed through our

Purchasing has staff with expertise in all major commodity areas,
  and has negotiated UWPA’s and Master Agreements for major
  commodities, such as:
      scientific equipment and supplies
      equipment leasing
      office supplies
      computer equipment and supplies

                        When in doubt- reach out!
Pay as You Order

•   University P-Card
•   Pay with own funds (or Amex), then get reimbursed (for CU
    travel/business expenses ONLY)

Order Now, Pay Later

•   EZPO or Central Purchase Order – Subject to Matrix
•   Staples (Office Supplies)
•   PSS (Clinical Medical Supplies)
•   Voucher Only (pay invoice, no PO needed)

   The P-Card is issued by Bank of America and can be used to for
    many business-related, small-dollar purchases under $2500
    ◦ Subscriptions & Books
    ◦ Lab and medical supplies
    ◦ Conference Registrations
    ◦ Professional Memberships
    ◦ Off site equipment services
    ◦ Cell phone, paging, and answering service bills
    ◦ Software without a contract (off the shelf)
    The P-Card CANNOT be used for:
    ◦ Travel expenses (hotel, airfare, meals etc.)
    ◦ Florists
    ◦ Personal Purchases of any kind
    ◦ Onsite Services & Service Providers (Consultants)
    ◦ Restricted Commodities
   UwPA vendors should be used whenever possible
   Please see website or contact for info
Purchase Orders and EZPO’s are contractual documents that
    obligate the University to purchase the requested goods and/or supplies
    in addition to protecting the University’s interests through clearly defined
    terms and conditions.
When should you issue an EZPO?
An EZPO (a small PO) is issued directly by the department and is used for
    goods purchases up to $2,500 for non-UWPA non P Card (non prior
    approval) vendors that have been validated for EZPO use, and up to $50k
    for University-wide Purchasing Agreements vendors Consult the contract
    listings by clicking the Preferred Vendor List button at for the UWPA EZPO limits. EZ-PO
    cannot be used to obtain services, except for UWPA Service Vendors.
When should you submit a requisition to Purchasing to request issuance of a
    Purchase Order?
A Central Purchasing Department Purchase Order is issued for University
    purchases that are not eligible for an EZPO and are not payable by a P-
    Card, or in the event no p card is available. ALL requests for consultant
    services, construction related services, equipment leases and some (non
    FFE prior approval) restricted commodities must use a Central PO and are
    not eligible for purchase via an EZPO.

 Dept identifies the need                                                            Accounts Payable reviews
   & indentifies sources,
   goes thru competitive                                                               Invoice and, upon final
      process to select                                                              approval, issue payment to
          supplier                                                                             vendor

Dept determines that a                                                              Dept. receives invoice
    PO is required                                                                  & processes payment
                                                                                         via APCAR

   Dept creates , releases, &
     DAF approves a PO                                                               Dept. receives
     Requisition using FFE                                                          product / service

        Dept submits (by Fax or                                                    Automatically transmits
    Scan) supporting documentation                                                 approved PO to vendor
                                                                                    And sends PDF copy
                                                                                     Of PO to Dept. via
           Purchasing receives
         Requisition. It is assigned
             To appropriate                                      Contract Officer analyzes
             contract officer          Contract Officer sends      Requisition and any
                                       Confirmation of Receipt      Backup – If okay,
                                           email to Dept.              approves PO
 The Financial Front End (FFE) is used to issue
 both EZPOs and create Purchasing
 Requisitions (i.e. requests for a PO).

Monthly hands-on training is available (see
 Finance Gateway for info) to learn how to
 create a requisition using the Financial Front
 End system. See Purchasing website for a list
 of validated vendors and the Procurement
 Mechanism Guide.

In the case of the following purchases, neither an
  EZPO nor a PO is required:

 honoraria, postage, registration fees, membership dues,
 individual books, subscriptions, messengers, printing
 services under $2500, short term equipment rentals, food,
 utility bills and vouchers (invoices for goods already
 delivered) for non restricted goods under $500

              For more details, see the

   All transactions must be approved before
    orders can be transmitted to vendors
   You must have DAF (Departmental
    Authorization Function) authority to approve
   Go to the DAF Info Page on the Finance
    Gateway for instructions on how to fill out the
    Combined DAF/FFE Application Form

The Approver (DAF) must approve the requisition, P-
  Card transaction, or order under the following

   Certify that the purchase complies with University
    policies & funding source requirements.
   Certify that the purchase meets a legitimate
    University need.
   Certify that all supporting documentation is accurate
    and complete.
   Certify that all purchasing activity has been
    conducted in a professional, ethical manner.
   Certify that the purchase appropriately minimizes
    risk to the University.
   Certify the purchase has been accomplished through
    a competitive bidding process where applicable.

Approving a requisition is
equivalent to authorizing the
expenditure of funds.

   Adhere to assigned DAF levels and requirements for purchase
    orders and bids, and, if need be, obtain prior approval from a
    senior member of your group before committing to any
    purchase or service order.
   Follow funding agency restrictions on procurement and obtain
    prior approval from the funding agency when required.
   Obtain prior approval from needed University offices for any
    restricted commodity orders, as required by circumstance.
    (details explained later)

DAF Authority is not equivalent to Contract Signature Authority.

Typically, it is the Purchasing Department’s role to execute both
purchase orders and contracts, and only Senior Officers who
have been formally and explicitly delegated “Signature Authority”
by the University Trustees may sign contracts on behalf of the
University. Proposed contracts should be forwarded to
Purchasing in conjunction with the requisition.

Purchasing will work with you to obtain approval from General
Counsel and Risk Management as required.

 University-wide Purchasing Agreements (UwPA) are
competitively bid or negotiated by the Purchasing Department,
with the goal of leveraging the University’s total buying power.

 Through this mechanism, the University obtains the best overall
value for repetitively purchased products and services.

When using UWPA’s, competitive bidding is not required.

    For a complete listing of
    University wide Purchasing
    Agreements, please click the
    “Preferred Vendor List” button
    located on the Purchasing
    Department’s web page at:


If your department’s need cannot be met via an existing
University-wide Purchasing Agreement, it is your
responsibility to spend the University’s resources wisely by
obtaining competitive pricing and best value.
Contact Purchasing if you need assistance in sourcing
products or services.

“What would you do if you were buying the item with your
own money?”

As we all know from our experience as individual consumers, price is
not the only thing to consider when you are making a purchase.
Just as you probably do in making personal purchases, you should also
    ◦ Quality of Product
    ◦ Warranty
    ◦ Customer Service
    ◦ Delivery Terms
    ◦ Prior Performance
    ◦ Insurance Requirements

Purchasing can assist you in identifying, selecting and negotiating
terms with a vendor.

If no University-wide Agreement is available for your purchase,
     the following competitive bid thresholds are required
     depending upon the dollar value of the purchase:
    ◦ $ 1 – $ 2,500: Minimum of one (1) written bid, quote
        and / or proposal required.
    ◦ $ 2,500 - $ 9,999.99: Two written, faxed or e-mailed
        bids, quotes and /or proposals. This is mandatory. Oral
        bids are not acceptable.
    ◦ $ 10,000 – & higher: Three written, faxed or e-mailed
        bids, quotes and/or proposals. Oral bids are not
    ◦ Don’t forget to upload supporting documents via EDM

   A request to modify information on a purchase order or an
    EZPO.( Note: EZPO’s cannot be modified beyond their established
   Reasons:
   Add/decrease (adjust) the PO value
   Modify an open commitment
   Do an account transfers or add an account
   Close a PO
   Reconcile PO value to payment
   Make changes to shipping and billing information
   Change contract dates
   Make vendor changes
   Change orders should not be used to add new scope of

   Used to modify only the encumbrance or other accounting
    information of a PO. Since neither the value of the PO nor its
    terms are changed in such cases, you need not notify the
    vendor involve the Purchasing Office

   New Change Orders are entered in and
    initiated in the FinSys/FFE section of

   Attend training or see the Change Order
    Module User’s Guide.

   When creating a new change order, enter a clear valid reason
    to help the Purchasing Office Contract Officer process the
    change order. Send supporting documents via EDM.

   Make sure the PO Value equals Total Encumbrance (Open
    Commitment + AP Payments) Make sure Account totals equal
    Line Item totals.

   When a PO has been overpaid, correct the value of the PO
    without increasing the Open Commitment; if the overpayment
    applies to more than one account, fix the overpayment in
    each individual account

   Change the “Bill To” address to another “Bill To” address via a
    change order if the PO is associated with a different sub-
    department in the department, center, or institute (if not, use
    the Bill To Address Change Form on the Purchasing Forms

   If when entering an invoice in AP/CAR, the amount of the
    invoice exceeds the AP variance rules, create a change order
    to reconcile the PO value to the payment

   When a PO is no longer needed, clear the unused PO value
    and unspent dollar value (open commitment) (this is the same
    as selecting “Final Payment” when entering an invoice in
   An encumbrance Includes the current Open
    Commitment left on a PO plus the amounts that are
    paid or pending payment in Accounts Payable

   In our accounting system, there are three types of
    encumbrances (open commitments):
        1)    open purchase orders
        2)    petty cash
        3)    payroll

   In accordance with fair and sound business
    practices, keep confidential all information
    supplied by vendors in their bids, quotations, and

   Vendor Questionnaires
    Departments must request new vendors to be reviewed and
    validated by Vendor Management. This is accomplished by
    using the online Finsys Vendor Create System for all new
    vendors. You will be asked to fill out and submit a
    questionnaire for the vendor. (Go to
    then navigate to the FinSys section)

   Vendor W-9 Requirements
    Have U.S. vendors doing business with the University provide
    a completed and signed Form W-9 to Vendor Management.
    See the AP website for details.

   Vendor Validation
    If an existing vendor (one you’ve used in the past) needs to
    be validated (or modified) by Vendor Management, you
    should fill out the Vendor Modification Form found on the
    Purchasing website:

   In a hurry? There is a Vendor Approval Rush
    Process. See the Purchasing website at:

   Notify the Purchasing Office in the event of any
    problems with vendor performance, using the
    Vendor Performance Report, available in the
    Purchasing Forms webpage

The majority of Service Providers require a
Purchase Order (PO) and must be accompanied by a
standard University service provider agreement.
Please check the Procurement Mechanism to confirm
the Service Provider Category Selection.

Service Providers who are also referred to as
Consultants are either a business firm or an
individual (who is not a University employee) who
contracts with the University to perform a service. In
depth training is available.

   Individuals providing academic accredited
    education-related services such as teaching,
    tutoring, conducting workshops, preparing
    curriculum, or providing other services performed
    by University employees, such as administrative
    assistance or secretarial services, should NOT be
    hired as consultants.

   Information Needed …Process service providers through the
    Purchasing Office for any dollar amount (with certain
    exceptions )– see the University’s Consultant Policy.
   For all consultancies, have a detailed scope of work
    describing the services to be provided, a signed consultant
    agreement in the required format, and certifications of
    insurance on file.
   Have service providers approved by the funding agency if
    applicable and when required
   Ensure service providers know before traveling on University
    business which expenses are reimbursable, which are not,
    and how to properly report and document those expenses

   Columbia University has insurance requirements designed to
    help mitigate risk and liability for vendors and the University.
   See the Minimum Insurance Requirements for Contracts,
    issued by the Risk Management Department.
   One exception is real estate leases.

   When creating an FFE requisition, you will need to validate
    your vendor first and provide supporting documentation
    which may be required in the form of bids or sole/single
    source documentation.
   Applicable FFE justification procedures must accompany any
    requisition for which there is a sole-or single-source
    procurement of goods, construction, or non-consultant
    services costing $2,500 or more, or more than $25,000 for
    service providers/consultant services.
   Please use manual form to supplement FFE form.
   For further information, see the Administrative Policy Library.

A blanket purchase order is a blanket order issued to a vendor
    by the Purchasing Office for a small number of repetitively
    purchased goods where it is impractical to issue a separate
    purchase order or use the p card for each requested
    delivery. Use allowed under following conditions:
       1) the order is for a fixed period, 1 year;
       2) the order is for a specified set of items;
       3) the order defines an agreed price for each item;
       4) the number of items covered by the order is limited,
       generally to 10 or less
       5) releases against the order are documented in a
       manner that allows each release to be tracked, audited,
       and reconciled to receipt and payment records.

   See University’s policy on Management and Accounting for
    Moveable Capital Equipment, available in the Administrative
    Policy Library. Prior approval by Sponsored Projects
    Administration is required for certain requisitions for capital
    equipment under grants.
   Capital equipment is defined by value ($5000) and minimum
    useful life (2 years).
   Equipment purchased with non-government funds, or
    acquired through a gift or donation is considered University
    equipment. A gift or donation must be reported at the fair
    market value as of the acquisition date.

• Departments may acquire the use of Capital Equipment
  through lease finance.
• Only Equipment valued at $25,000 or more will be
  considered for lease finance.
• A lease obligates the university to make fixed periodic
  payments to the Lessor without recourse or right to cancel.
• All leases must be processed by the purchasing department
  with the exception of Postage meters from Pitney Bowes
  with total annual payments under $5,000.00.
• There are two types of lease, Operating (at end of term,
  equipment is returned to Lessor) or Financing (at end of
  term, equipment is owned by the university)

                                            Continued …
• Department / Schools must never enter into a lease prior to
  discussing terms and conditions with the purchasing
  department .
• School/Department should contact the Contract Officer
  responsible for leasing with an equipment purchase quote
  to discuss the various leasing options.
• There are many internal and external documents that must
  be executed for which the lease process can take three
  weeks or more to complete.
• All equipment leases and payments are managed by the
  Purchasing Department.
   Unless a qualified CU personal purchase program is used,
    purchase of equipment, furniture, or any item for personal
    use through the University's Purchasing Office is prohibited
    as, among other things, it violates sales tax regulations.

   Consistent with this policy, P-Cards may not be used for
    personal purchases of any kind. Furthermore, petty cash may
    not be used for personal loans and purchases, nor for cashing
    of personal checks.

   Do not break up purchases into smaller transactions in order to
    avoid purchasing requirements for large-dollar procurements

   Purchase orders are to be used before a contract is agreed and
    absolutely prior to engaging the supplier.

   Keep copies of all documentation associated with requisitions,
    contracts, orders, invoices, petty cash, and P-Card purchases

   Initiate a change order to modify the encumbrance or other
    accounting information on a purchase order or an EZPO PRIOR to
    processing payment in AP/CAR.

   To the extent possible, use University-wide Purchasing
    Agreements (UwPAs) (see the Preferred Vendor List for the
    latest list) and/or competitive bidding wherever possible.

   Work closely with Risk Management prior to and during
    purchase and registration of a vehicle.

   Direct any official recall notice to the Purchasing Office within
    24 hours of receipt

By now, you’re probably wondering
what Purchasing can do for you.

The goal of the Purchasing Department is to help University
  customers obtain the best overall value for the goods and
  services required to support the University’s academic
  and research mission as well as limit and mitigate risk on
  behalf of the University.

Purchasing is your partner
working to make your job easier!

How can Purchasing help?
  ◦ Obtain competitive bids
  ◦ Negotiate University-wide Purchasing Agreements
  ◦ Guide you through the purchasing process
  ◦ Negotiate and communicate with vendors
  ◦ Support and help you understand your role in

    You provide a product description/specification
    and Purchasing will assist you by:
   Identifying qualified vendors
   Negotiating price and terms, or applying University-wide
    Purchasing Agreement pricing and terms
   Exercise the University’s full purchasing leverage on your
   Awarding the Purchase Order
   Helping to resolve post-award issues and/or disputes

Class Topics
   The Purchasing Process

   Purchasing Compliance and
   Policy Issues
   Purchasing Office Website Tour
   AP Compliance and Policy Issues
   The Accounts Payable Process
   AP Website Tour
   Further Training Opportunities

The procurement process must comply with:
 ◦ Federal Regulations
 ◦ University Policies
 ◦ Tax Regulations

 In addition to the policies and procedures presented
   throughout, we have highlighted additional
   compliance issues to be aware of.

Compliance – Using Common Sense to Protect Our Future.

As a recipient of federal funds, the University is required to comply with
  federal regulations when making purchases. The importance of University
  and Federal compliance cannot be understated and remains of the highest
  importance to the University

It is an important goal of the University to maintain compliance in order to
    maintain the flow of funds. Any instance of noncompliance found in a
    sampling by auditors may translate into a proportionate decrease in federal

By complying with policy, you ensure that the University adopts
best business practices, and that we use our resources

The University is required to comply with OMB Circular A-110
the Federal Acquisition Regulations (FAR). Compliance entails:
  ◦ Ensuring sufficient and fair competition in vendor selection
  ◦ Adherence to clear ethical standards to avoid real or apparent
    conflict of interest by University employees or agents
  ◦ Adherence to clear purchasing procedures
  ◦ Incorporating government specified contract language
  ◦ Consistent documentation of purchases, including record
    retention for audit and other purposes
  ◦ Making an affirmative, pro-active effort to utilize small
    businesses, minority-owned firms and women’s business

University policies not only mirror and reinforce
   federal regulations with which the University must
   comply, but they also represent good business
   practices and have been drafted to protect the best
   interests of the University.

For more information, the University-wide
   Administrative Policy Library:

The following are some key elements of the
University’s Procurement policies to consider:

  1. Conflict of Interest
  2. Restricted Commodities
  3. Sole Source Purchase
  4. Columbia University Fire Code
  5. Construction/Facilities Related Purchases
  6. Small Business Compliance/Local Initiative
  7. Legal Services

1.   Conflict of Interest – Purchases from or
     payments to a business in which a
     University employee has an interest are
     prohibited. The University does not enter
     into purchasing contracts with students,
     staff, faculty or members of their
     immediate family.

2.   Restricted Commodities – Commodities
     which require prior approval from oversight
     departments must be processed via a
     Central Purchase Order or an EZPO.
     Restricted Commodities include but are not
     limited to: ethyl alcohol, refrigeration,
     animals and animal related products,
     radioactive materials, narcotics, and
     upholstered furniture.

3.   Sole/Single Source Purchases – may be used as justification
     for vendor selection without competition when there is only
     one vendor capable, authorized or available to provide the
     goods or services (for regular POs). FFE will prompt you to
     enter in explanation.
4.   Fire Code – The University mandates compliance with the
     Boston Fire Code for all upholstered furniture. The City of
     Boston has adopted the standards specified in California
     Technical Bulletin 133. All upholstered furniture must
     comply with this code.
5.   Construction Related Purchases – All purchases for
     construction, renovation or alteration to physical space at
     the University require the review and prior approval of
     Facilities Management’s Office of Design and Construction
     on the Morningside campus or the Office of Facilities,
     Medical Center.

6.    Small Business Compliance/Local Purchasing Goals –The
      University is committed to increasing the diversity of its vendors
      and to maximizing its contribution to the economic growth of
      the communities in which it is located. Purchasing can assist you
      in identifying and supporting local, small and minority-owned
     ◦    Small Business Compliance – The Federal Government
          mandates that in spending Federal grant funds the University
          make best efforts to purchase from small business concerns,
          particularly those owned and controlled by socially and
          economically disadvantaged individuals or women, and that
          these business concerns shall have the maximum practicable
          opportunity to provide goods and services to the University.
          In order show that “best effort” was made, purchasers are
          required to complete best effort or affirmative effort
          statements when approving requisitions. More detailed
          information on Small Business Compliance and required
          Subcontracting Plans, can be found at

◦ Local Purchasing Goals – It is the University’s policy to seek
  to increase the positive effects of employment,
  construction spending, purchasing and, research and
  development for the benefit of local neighborhoods in
  Manhattan north of 110th St and in the South Bronx. Total
  local payments by the University to vendors in this area
  were approximately $42 million in 2003. Schools and
  Departments are strongly encouraged to seek out and
  utilize local businesses. Where possible, Purchasing will
  enter into University-wide Purchasing Agreements with
  local businesses. These contracts make possible the
  regular purchase of large volumes of goods and services
  from these neighboring businesses. For more information
  on the University’s local impact, see:

7.   Legal Services - Only the Office of the General Counsel may
     retain outside lawyers or law firms to represent the
     University or an affiliated party. No other departments are
     allowed to do so. This policy allows the University to
     avoid conflicts of interest and maintain quality as well as
     cost control. Payment for legal bills may only be
     authorized by the General Counsel’s Office.

     Exception: A payment to a law firm for visa processing may be
         submitted by any department without authorization from
         the Office of the General Counsel.

   Buying@Columbia
   Preferred Vendor List
   P-Card Info
   Interactive Purchasing Guide
   Fax Coversheet
   Forms Library
   Who to Call? Commodities Search

   Introduction to FFE (monthly)
   Using FFE for Purchasing Requisitions
   Using FFE/FinSys for PO Change Orders
   How to Hire Service Providers (bi-monthly)
   P-Card training (arrange upon application)
   Online Procurement Training (required to use

Please call or visit the Purchasing Department for additional
  information – we are here to serve you!

Morningside Purchasing Department
615 West 131st Street, 3rd Floor-Studebaker Building
(212) 854-4179

CUMC Purchasing Department
601 West 168th Street, #47
(212) 305-4198

Class Topics
   The Purchasing Process
   Purchasing Compliance and Policy Issues
   Purchasing Office Website Tour

   BREAK !!!
   AP Compliance and Policy Issues
   The Accounts Payable Process
   AP Website Tour
   Further Training Opportunities

   Monitors University disbursements (over 1.5 million
    transactions annually)

   Ensures that only valid, appropriate and DAF-
    approved invoices are paid by the University

   Ensures that payments and employee
    reimbursements are in full compliance with
    University and governmental regulations

   Commitment to Service
   Issues stop payments and voids
   Manages American Express Corporate Card
   Reports 1099-Misc. payments to IRS
Department                          Check

 Approval                        AP Transaction
                                   Audit and


                      AP / CAR
•   Understand the nature of each expenditure

•   Check the completeness and accuracy of
    accounting, especially for expense reimbursements

•   If a PO was created, verify match between PO,
    delivery packing slip and invoice information.

•   Segregate “unallowable” expenses to an 8500
    series sub-code

•   Ensure that all supporting documentation is
    provided, supplying originals as required
• Understand nature of the expense

• Check completeness of documentation and accuracy of

• Monitor segregation of “unallowable" expenses

• Review compliance with University policy and funding
  agency regulations
  ◦ Absence of a conflict of interest (employees’ duty and responsibility to
    conduct business matters solely for the benefit of the University)

• Verify appropriateness of expense and availability of
•   Images and archive all original documentation
    related to the expenditure.
•   Perform audits of expenses to verify:
     • Compliance with University policy
     • Completeness of documentation and accuracy of
     • Segregation of allowable expenses
•   Assist with policy & procedure guidance and
    approval of exceptions
   Compliance is everyone’s responsibility

   The importance of University and Federal
    compliance cannot be understated and remains of
    the highest importance to the University

   Attention to compliance regulations should be
    rigorous at every level
•   Consequences of non-compliance:

    •Decrease in federal funding, donations
    •Fines & penalties
    •Loss of tax-exempt status
    •Damage to reputation
“Unallowable” or “Segregated” expenses
 ◦ NO government funds are to be used to pay for
   “Unallowables”or “Segregated” expenses, that is,
   expenses characterized by the Federal Government as

  • Costs not clearly related to University business (e.g.
    alcohol, flowers, chocolate, entertainment)

  • Excess expenses over policy thresholds
   Retain copies of AP
    invoices, purchasing
    documents and journal
    transfer documentation for
    a minimum of 7 years

   Retain copies of general
    financial records and
    restricted funds for 7
    years from the end of
    grant or contract.
Remember, this university is supported by:
  ◦ IRS & taxpaying public (tax exemption)
  ◦ Donors
  ◦ Students
  ◦ Granting Agencies

      We must be careful stewards of these funds!
         (Remember the front-page test)
   Is there a clear business reason? (Please
    write out the business reason on the
    documentation if it’s not obvious.)
   What are we paying for? Were the goods
   Do I have needed original documentation
    or backup?
   Is the amount owed correct? Does it
    match PO info, when applicable?
   Are there taxes included for which CU,
    as a non-profit, is exempt? (CU does not
    pay NY or NJ Sales Tax. See the AP
    Website more info)

•   Written explanation of valid business purpose must be

    • Where appropriate, conference agenda, flyer, registration
      form, or schedule of events should be provided.

    • Business purpose must be specific: “Travel to Boston to
      Accounts Payable Network conference to speak about CU
      Accounts Payable Department” is an appropriately
      documented business purpose. “Boston conference” is not.

    What did you do +where did you do it + why is it CU
   Is this order connected to a EZPO or Purchase
    Order? Is the vendor you are paying validated for

    You should be thoroughly familiar with University Purchasing
    Guidelines regarding the ordering of supplies, equipment,
    restricted substances, hazardous materials, upholstered
    furniture, payments to consultants.

    Make sure to reference the purchase order and
    compare with packing slip when processing
    payment in AP/CAR.
The AP/CAR system will guide you through
 a series of steps to request creation, or
 “assignment” of the necessary vendor
 record (accomplished in FinSYS Vendor
 Create module).

If you are modifying a vendor, contact the
   Vendor Maintenance department at
   What is a W-9?
    A W-9 is a form that provides a record of information about
    US vendors that you are paying. It documents the name,
    address, and Tax ID number. This form also documents the
    incorporation status of the vendor (e.g.: corporation,
    partnership, LLC).

   Why is a W-9 required?
    The W-9 is required to help the University to maintain:
    ◦ The integrity and accuracy of the vendor file, having this
      documentation provided by the vendor.
    ◦ Compliance with IRS regulations. The W-9 is a certification
      that the Tax ID provided is correct and that the vendor is a
      US citizen or entity. The incorporation status informs
      whether the vendor should or should not have income
      reported on a Form 1099.
   Are there any exceptions?
    The only circumstances for which a W-9 is not required are:
    ◦   Patient refunds to individuals
    ◦   Current employees receiving expense reimbursements
    ◦   Current students receiving expense reimbursements
    ◦   Foreign “F” vendors with no Tax ID number (require Form W-8)

   When should I send the W-9 form to Vendor Maintenance?
    Once your vendor create request is assigned to one of our Vendor
    Maintenance staff, they will contact you (via AP/CAR) to have the W-9 sent
    directly to that individual’s attention. You can send it:
    ◦ As an attachment to an email
    ◦ By fax to (212) 854-9352. This is the dedicated fax number for W-9’s, so
       please only fax W-9’s to this number to help prevent overcrowding.
    Please include the vendor create requisition ID as the email subject or on the
   To submit payment documents electronically, you
    must have the appropriate equipment and it must
    be setup to scan to Account Payable's EDM system.


   To submit the documents through interoffice mail,
    place the documents with the barcode coversheet
    in an interoffice mail envelope and place it in an AP
    drop box.
   A Barcode Cover sheet is required for each voucher
    (payment request)
    ◦ System recognizes each document by this barcode
      separator leading to faster indexing and recognition in the
    ◦ Omitting coversheet can attach your document to another,
      so it will not appear as a received document for audit

   Indicate the page count on the barcode cover sheet
◦ INVOICES for equipment and services

◦ CHECK REQUESTS for payment of goods
  and services

◦ P-Card or Staples Advantage payments

◦ PETTY CASH usage and replenishment

◦ TRAVEL and BUSINESS expenses to be
   Invoices must be billed to Columbia University (not
    just a departments name or individual)

   Pay only current balance (need to get prior invoices
    for past due balance)

   Double check:
    ◦ vendor name (pay the correct vendor)
    ◦ amount (pay the correct amount)
    ◦ invoice number (prevent duplicate payments)

   Where required, ensure PO is obtained and paid
    against in APCAR

   Segregate alcohol, flowers, gifts, entertainment
A Company Invoice
    Can you find …?
       •Invoice #
       •Invoice date
       •Total amount
       •Location of Voucher #
   For procurement from vendors already established under a
    UwPA, you are not required to take action to ensure the
    University’s tax-exempt status is recognized for a particular

   For new vendors, ensure that vendors are provided with a
    copy of the Exempt Organization Exempt Purchase Certificate
    Form in which the University’s state exempt organization
    number is provided. Form can be found in the Finance
    Division Forms Library.

   A firm or individual with whom a Service Provider
    contract is executed for a specialized service that is
    generally not performed by University employees.
    (Honoraria and human subjects are exempt from
    this designation).

   Preferred way to pay for this type of service is via
    invoice format, and processed via AP/CAR
   A check request may be used by
    departments for honoraria, petty cash
    replenishments, some study subject
    payments & non-employee travel
    expense reimbursements. Can also
    be used for registration fees, rent
    (short-term), membership dues,
    subscriptions, student enterprises
    services, advertising, payment to
    personal service vendors, and/or
    other such miscellaneous services
…    Purchases that should be processed under
    the purchasing guidelines for supplies,
    furniture, equipment, consultants, services,
    repairs, and like procurements.

Invoice No. =
   An honorarium is an expression of thanks from
    Columbia University and is not negotiated with the
    recipient. It is defined as a gratuitous payment
    provided to a lecturer or a professional person
    from outside the University community (not a
    University faculty or staff member). It is taxable
    income and is reportable to the Internal Revenue
    Service if over $600 annually.

   Payment is made by a Check Request
◦ Summarize charge

◦ Include Payee’s name, home address and social security

◦ Attach honorarium approval memos and/or other
  documentation (i.e. flyer from event)

◦ Include a W-9 form completed by the payee

◦ Honorariums to Non US Citizens handled by HRPC
◦ For Non-University guest lecturers, consultants,
  prospective employees
  or students

◦ Include Payee’s name, home
  address and social security number

◦ Submit Form W-9

◦ Attach receipts and backup documentation (including
  flyer from event)

◦ Must comply with all University expense
  reimbursement policies

◦ Make sure to choose “Non-1099 payment” in AP/CAR
   Petty Cash - The Basic Concept

    ◦ a small cash fund, monitored by DAF, to be used when
      normal invoicing procedures are not practical
    ◦ see Petty Cash Info page on AP website for full policy,
      procedures, training and necessary forms

   When to Use

    ◦ for University faculty, students and staff only
    ◦ business expenses $80 or less
    ◦ for necessary and reasonable emergencies
    ◦ research subject cash payments (see IRB regulations for
      additional requirements)
    ◦ local carfare, parking and tolls
    ◦ emergency supply purchases for $80 or less
   How it Works

    ◦ University staff may be reimbursed by the
      PC Custodian for incurred qualified business
      expenses (i.e. $80 or less) directly from a
      departmental/project PC cash fund.
   Petty Cash cannot be used to pay for:

    (or reimburse) honoraria, services, equipment, travel
    or salary advances, registration fees, business meals
    outside of the office, personal loans, subscriptions,
    debit or credit card reimbursements, consultant fees
    and any other type of service payments, or the
    cashing of personal checks.
   To set up a fund, a department must demonstrate a true business

   Each department may establish a Petty Cash fund up to $500 (or
    more if special circumstances exist)

   Fill out Petty Cash Administration Form, follow instructions on form

   Visit the Petty Cash Info page on the Finance Gateway for complete
    set-up and usage information.
   The Petty Cash Custodian, must be a full-time
    permanent employee, and must take online training to
    learn about PC policies and procedures.

   Custodian is responsible for reconciling the fund on a
    regular basis (at least monthly), providing adequate
    controls, management of expense reimbursements
    and Fund replenishments, recordkeeping and general
    fund administration.

   A petty cash fund cannot be used to open a bank
    account in either the name of the University or the

   Keeps fund in a safe or locked cash box, and must
    close fund when purpose of fund establishment ends
    or changes significantly.
The Custodian must manage the reimbursement process.

University faculty, staff, and students may request reimbursement
for a business-related expense, not to exceed $80, from the

For each expense, an individual must submit original receipts to the
Fund Custodian, and sign off on the Petty Cash Receipts Summary
Form upon receipt of reimbursement. (For Human Subjects PC
Reimbursements, use customized form.)

There are special requirements for use of petty cash for Human
Subjects Research payments. See the website for more info.
On a monthly basis, or when the fund is low, the custodian should:

   Tape petty cash original receipts to white 8.5x11 sheets of paper,
    and attach to Receipts Summary Form (found on website)

   Attach Receipt Summary Form to replenishment Check Request, and
    enter the information electronically via AP/CAR, process like any
    other AP/CAR transaction. (see examples on website)

   Custodian should keep copies of the original documentation for
    their own departmental files, and monitor AP/CAR queue to make
    sure transaction proceeds to check release.

   Check will be sent to department. Custodian should cash check, and
    put cash back into Petty Cash Fund box. (see info on website on
    where to cash check)
   The custodian must reconcile the fund on a
    monthly basis, weekly if the fund is active

   Reconciliation ensures the sum of the
    outstanding reimbursements, cash, and
    vouchers is equal to the original amount of the

   For departments with multiple funds, an overall
    department reconciliation should be performed

   Internal Audit or Office of the Controller may
    perform spot check counts

   A reconciliation form is available on the web for
   The custodian must close the fund immediately if the purpose
    for which the fund was established ends or changes

   Upon completion of the custodian’s employment by the
    University, the fund must either be closed or a new custodian

   To close an existing fund, deposit any remaining cash in the
    fund via the FFE Cash Module – outstanding receipts must be
    processed in AP/CAR (see website for details)

   Fill out Petty Cash Administration Form as required, attach
    supporting documents, email to
   P-Card Concept

    ◦ Use like any typical credit card, only valid for prescribed
      purposes with pre-determined limits and restrictions. Can
      be used to for many business-related, small-dollar
      purchases. Must attend training prior to receiving card.

   How to Pay
    ◦ All purchases must be verified and signed off by user in P-
      Card Works system, and approved by DAF by monthly cut-
      off date.
   Order Office Supplies using Staples Advantage

    ◦ Sign-in to E-way Online Ordering tool. (Note: University's
      contracted rates will not be honored at any Staples retail
      locations or on Commit order, charge to
      default FAS account or choose another. Departmental DAF
      must approve order.

   How to Pay
    ◦ After goods shipped, payment is automatically
      forwarded to vendor.

    ◦ (Using P-Card or EZPO for Staples Advantage orders is possible,
      but not preferred method.)
   On a regular basis, create and transmit interdepartmental
    invoice charges using the Interdepartmental Invoice (IDI)
    module of FFE (see the Financial Front End (FFE) Manual); for
    IDIs received from other departments, conduct a monthly
    review to ensure their accuracy

   The types of payments that the University can make to
    foreign nationals depend upon their visa status.

   Some may be given compensation while others can only be
    reimbursed for expenses. I.R.S. regulations and University
    policies further limit the types of payments foreign nationals
    may receive.

   Read and become familiar with the Payments to Foreign
    Nationals and Entities policy at:

   Contact the foreign national to inquire about the
    following: (a) what is their visa type? Please visit
    tchart.html to validate visa type.

   For non-US citizens, a copy of Form I-94 or the
    passport page with the visa entry must be provided
    prior to reimbursement.
◦ If the lecture was given in the United States, the
  payment must be processed through the Human
  Resources Processing Center (HRPC).

◦ If the lecture was given overseas on foreign soil
  the payment can be processed through Accounts
  Payable. Please complete the top portion of Form
   Departments must obtain the following from the
    individual, as this will be required before the
    vendor is setup in the system and payment is

    ◦ Copy of I-94 Departure Card (official documentation of
      immigration status)
    ◦ Copy of Identification page of the passport
    ◦ Form W-8BEN or Form 8233
   W-8 forms and detailed instructions for the
    requester of the W-8 forms can be found on the
    IRS website at:

   Form 8233 and detailed instructions for the
    requester of the form can also be found on the IRS
    website at:
   Payments for Services
    ◦ Services will not be reimbursed to an employee who has paid out
      of pocket.
   Honoraria
   Royalties
   Prizes/Awards
   Rents
   Stipends/Fellowships
   The Form 1099-MISC is used to report payments
    made to a person or business that is not being paid
    as an employee of Columbia University. These
    payments are called “non-employee

   Form 1099-MISC is required when total payments
    for the year exceed $600.

   The Form is provided by the University to the IRS
    and to the person or business that received
    payment. It will be mailed to recipients by January
    31st of the following year.
   The “non-1099” box in APCAR may only be used to
    identify a non-reportable payment, normally
    expense reimbursements
   NEVER use this box to avoid 1099 reporting of a
   Make sure to separate out honorarium payments
    from any travel reimbursements to avoid incorrect
    1099 reporting.
   VERIFY correct vendor address (and update in
    system) prior to paying honoraria or contract
•   Spending on a GIFT or ENDOWMENT must
    comply with donor terms & restrictions

    – Accepting donor funds legally obligates the University
•   Where to find applicable Terms & Restrictions
    – Gift Terms (
    – Endowment Terms ( )
     • Those making decisions about or approving expenses on
       endowment accounts are required attend Endowment
       Admin & Compliance training (register at )
     • Training is also required for access to Endowment Term
       Sheets, a web-based tool for departments to obtain key
       Terms & Restrictions information
     • Further information on endowments can be found at
   Advise PIs that they are responsible for insuring that:

    ◦ Improper costs are not charged to the sponsored project

    ◦ Costs that should be charged to the sponsored project are reflected

    ◦ Charges are consistent with the PI’s expectations

    ◦ The PI knows the overall financial status of project

    ◦ Significant variances from budget are identified and addressed

   Special conditions apply to reimbursement to human
    subjects, as all receipts for human subjects need to be HIPAA

   According to IRS regulations, annual compensation (subject
    incentives) to study subjects of $600 or greater is considered
    taxable compensation and reportable to the IRS.

   Procedures for handling these circumstances may be found in
    the University’s policy on Petty Cash, available in the
    Administrative Policy Library.

   Know proper account and sub-code to charge
    expenditures against (See FFE for sub-code list)

   Follow proper procedures when paying invoices
    from restricted accounts.

   See Finance Gateway for Sponsored Projects
    Policies and Procedures
   At Columbia, a FAS general ledger account is a type of
    account that represents a self-balancing fund created for a
    certain activity such as a faculty practice or an endowment or
    an unrestricted fund.

   Each general ledger account at Columbia has its own fund
    balance, as well as cash and other balance sheet accounts,
    plus summarized revenue and expense activity. The fund
    balance carries forward from year to year, and the change in
    the fund balance is the revenues less expenses for the year.

   Each general ledger account may have sub-ledger accounts
    attached to it. A general ledger can have many sub-ledgers
    attached to it, but a sub-ledger can only be attached to one
    general ledger.

   Sub-ledger accounts keep track of detailed revenues and
    expenses, which roll up to the general ledger.

   Sub-ledger accounts define activities and can have a series of
    sub-codes that refer to what specific account activities (e.g.,
    major equipment expense, admissions revenue, software

   Sub-codes occupy the same spot as the account controls in
    the general ledger (the last four digits of the account string).

   When charging invoices, p-card transactions, check requests,
    or other general expenditures against an FAS account and
    sub-code, consider the following:
    ◦ Verify that the FAS account and sub-code to be charged has funds
      allocated for the expense

    ◦ Always verify prior expense planning and FAS account allocation before an
      expense is incurred or a liability (e.g., a purchase order) is initiated
    ◦ If the invoice is associated with a purchase order (PO), use the expense
      allocation as per the actual PO account distribution

   Also consider:
    ◦ To view a breakdown of expense allocation (i.e., budget) and funding
      availability (i.e., actual expenses to date) by FAS account and sub-code,
      refer to departmental paper FAS statements or corresponding information
      in the Departmental Advance Tracking and Reporting System tool (DARTS)

    ◦ Be aware that if an FAS sub-code that has no budget allocation is charged,
      an additional account line item will be created in the FAS sub-ledger
      account summary statement; this new line item will show up as an
      overdraft until either 1) the budget is reallocated to fund that sub-code,
      or 2) the charge is transferred (via FFE Journal Entry) to a previously
      funded sub-code

    Attend monthly CU Financial Accounting Overview class for more info …

   Use a financial model to develop a budget, then enter it using
    the University’s Budgeting Tool
   When significant variances are identified in the analyses of
    budget vs. actual expenses and revenues, work with relevant
    parties on taking appropriate action to decrease expenditure,
    increase revenue, revise the budget, or otherwise address the
   For sponsored projects, make sure PIs or their designees are
    reviewing on a regular basis the standard monthly paper
    reports (or online using DARTS)
   Following Year End and Quarterly instructions for booking
    expenses to accounts or eliminating certain types of liabilities
    prior to scheduled deadlines.

   To ensure funds are spent appropriately, departments must
    conduct regular reviews of expenditures and other charges to
    their departmental accounts and take appropriate action:
   Review weekly and monthly payroll transactions
   Review expense sub-coding for p-card transactions
   Review open encumbrances
   Identify and correct overdrafts
   Conduct monthly budget monitoring and analysis of budget
   Share relevant reports with the chair/director and PIs

   Provides faster access to funds

   Eliminates need for “Check Pick Up”

   Payments can’t get “lost in the mail”

   Easy sign-up on the AP Website

   To sign up, vendors submit a completed “Direct Deposit Form” (one
    is for members of the University community and the other is for
    non-University vendors)

   Separate set-up from Payroll Direct Deposit required
   Travel Expense Reimbursements
   Business Expense Reimbursements
   Entertainment Expense Policy
   Gift Policy

         Attend the Travel & Business Expense
          Reimbursement Class (held monthly)
What really helps…

       Those traveling must know the policies
                 before they travel

   We can help
    ◦ Training sessions
    ◦ “What to know” guide
   Using AP/CAR (Hands On) (bi-monthly)
   Travel & Business Expense Reimbursements
   Supplemental Approvals (monthly)
   Creating New AP Vendors (quarterly)
   Online Procurement Training (required to use

   Using AP/CAR Guide
   Getting Set-up with AP/CAR
   Special Payments
   Travel & Business Expenses
   Foreign Payments
   Forms Library
   Available Training
   Who to Call? Contact Info

   Contact AP Service Center 854-2122 or use
    the Service Center Request Form found on the
    AP Service Center webpage.

   Form at:

jolinmilioncherie jolinmilioncherie http://