Introduction to Accounts Payable by crawfordhanes



  Purchasing Manual

This manual is intended to assist you in determining which procurement method to use when buying
goods and services for Metropolitan State College of Denver (MSCD) and what the basic rules and
regulations guiding the purchasing process are. All purchases must be made in accordance with the
regulations established by the State of Colorado, as well as all Federal and College rules to ensure
accountability to the public and fairness to the vendors.

Any person employed by the State of Colorado who purchases goods and services or is involved in
the purchasing process for the State, shall be bound by this code and shall:

1.    Avoid the intent and appearance of unethical or compromising practice in relationships,
      actions, and communications.

2.    Demonstrate loyalty to the State of Colorado by diligently following the lawful instructions of
      the State of Colorado while using professional judgment, reasonable care, and exercising only
      the authority granted.

3.    Conduct all purchasing activities in accordance with the laws, while remaining alert to, and
      advising the State of Colorado regarding the legal ramifications of the purchasing decisions.

4.    Refrain from any private or professional activity that would create a conflict between personal
      interests and the interest of the State of Colorado (C.R.S., 18-8-308).

5.    Identify and strive to eliminate participation of an individual in operational situations where a
      conflict of interest may be involved.

6.    Never solicit or accept money, loans, credits, or prejudicial discounts, and avoid the
      acceptance of gifts, entertainment, favors, or services from present or potential suppliers
      which might influence, or appear to influence purchasing decisions.

7.    Promote positive supplier relationships through impartiality in all phases of the purchasing

8.    Display the highest ideals of honor and integrity in all public and personal relationships in
      order to merit the respect and inspire the confidence of the State of Colorado and the public
      being served.

9.    Provide an environment where all business concerns, large or small, majority or minority
      owned, are afforded an equal opportunity to compete for State of Colorado business.

10.   Enhance the proficiency and stature of the purchasing profession by adhering to the highest
      standards of ethical behavior.

COMMITMENT VOUCHERS: You may not purchase an item from a vendor without providing a
commitment voucher (Procurement Card, Special Purchase Order, Invoice and Certification for
Personal Services, Purchase Order, or Contract) BEFORE making the purchase.
    A commitment voucher tells the vendor that the State is definitely going to buy something
       from them and that we are obliged by law to pay for it.
    It also commits the vendor to provide the goods or services we intend to purchase for the
       stated amount of money and according to certain terms and conditions.

AHEC PURCHASING DEPARTMENT: All purchases over $5,000 and/or for restricted goods or
services must go through the AHEC Purchasing office. The goal of AHEC Purchasing is to assist
you in obtaining the best value for each dollar you spend and to ensure all purchases are made in
accordance with the regulations established by the State of Colorado. AHEC Purchasing is also
invaluable for answering questions and helping departments as needed, no matter the dollar amount of
the purchase.

PURCHASING AUTHORITY: Not everyone is allowed to purchase on behalf of the State. Even
attending Purchasing Training does not give an employee purchasing authority. College
departments designate who is authorized to approve purchases by processing the Signatory
Authorization form. A Primary and Alternate Signatory are authorized to sign for the purchase of
goods and services for the department, as long as the goods and services are within the department's
budget and follow purchasing procedures. IMPORTANT: Under no circumstances is anyone
allowed to authorize his/her own paperwork, including reimbursements, travel requests, petty cash,
etc. The Accounting Services department is authorized to deny signatory authority to someone, if it
feels the College’s welfare may be compromised by granting it.

TAX EXEMPT STATUS: Metropolitan State College is a tax exempt institution. Tax will be
automatically deducted from invoices and will not be reimbursed to individuals. A copy of the Tax
Exempt Letter is included in this manual.

STATE AWARDS: In many cases, the State of Colorado has negotiated contracts with vendors to
provide certain goods or services for all state agencies. Always check the State Award list before
buying anything to see if there is a State Award in place. The list is updated periodically as awards
    There are two types of State Awards: Mandatory and Permissive.
    Mandatory awards include such things as furniture, which must be purchased from Colorado
       Correctional Industries (dba Juniper Valley Products), and printing, which in the case of
       MSCD and the Auraria Campus must be purchased from Clicks! (the Auraria printing
    If a mandatory award is in place, the only way to purchase the goods or services from a
       different vendor is to receive a waiver from AHEC Purchasing before making the purchase.
       If a waiver is not granted, the purchase may not be made from a different vendor. Any
       violation of this policy may subject the employee to personal liability for the purchase.
    Permissive awards allow you to purchase from other vendors; however, the State has usually
       negotiated the best prices from the awarded vendors. Use of a different vendor should be
       justified in writing to AHEC Purchasing.

      Use of a State Award Vendor allows you to make purchases without having to go through the
       competitive solicitation process, which saves a great deal of time and effort for everyone.

VENDOR AGREEMENTS: Frequently, vendors will ask a customer to sign some kind of
agreement related to purchasing terms, credit references, license agreements, etc. IMPORTANT:
ADMINISTRATOR HAS APPROVED IT. You can attach an unsigned copy of the agreement to a
purchase requisition for clarification of what is being purchased. However, if the vendor paperwork
includes any terms or conditions of sale, they must be reviewed by the Contracts Administrator. If a
vendor insists that their paperwork be signed, forward the discussion to the Contracts Administrator.

PERSONAL LIABILITY: Any employee who violates the purchasing rules may be subject by
law to personal liability for the purchase amount. The State Controller’s Office has sole
authority to approve or deny payments by the State for such “illegal purchases.”
    CRS 24-109-404 – If any governmental body purchases any supplies, services, or
       construction contrary to the provisions of this code, or the rules promulgated pursuant
       thereto, the head of such governmental body and the public employee, which for
       purposes of this section includes elected officials, actually making such purchase shall
       be personally liable for the costs thereof. If such supplies, services, or construction are
       unlawfully purchased and paid for with State monies, the amount thereof may be
       recovered in the name of the State in an appropriate civil action.

I need to buy something – now what?
Question 1: What Is Being Purchased?
Personal Services (CRS 24-50-501 through 514):
Personal services include any work done by a person that is not simply incidental to the purchase of
goods. All personal services purchases over $5,000 total MUST be reviewed by the Human
Resources Department before a purchase order or contract can be processed or any work begins.
Personal services purchases under $5,000 will be reviewed by Accounting Services. The purpose of
this review is to correctly classify workers as either independent contractors or employees.
Departments must fill out an Independent Contractor Verification Checklist and attach it to the ICPS
form or the purchase requisition. Independent Contractor or Employee status will be determined by
either Human Resources or Accounting Services. If the vendor is determined to be an employee, the
department will be notified and appropriate direction given for proceeding.

All other purchasing rules apply for personal services, including the use of State Awards whenever
possible and posting the request on the BIDS system when necessary. For purchase of services
under $5000 for the entire fiscal year, use an Invoice and Certification for Personal Services (ICPS).
For purchase of services that will total more than $5,000 for the fiscal year, process a purchase
requisition in the normal manner, forward it to Human Resources, who will then forward it to AHEC
Purchasing to create a purchase order. IMPORTANT: Employees of MSCD may NOT be hired as an
independent contractor in any manner in addition to their employment at the College.

The first step in purchasing goods, as with all purchases, is to check the State Award List. If the
goods are awarded to a vendor on the list, you must use that vendor. If for some reason you believe
you should buy the goods from a different vendor, you must receive a waiver from AHEC
Purchasing. Such waivers are handled by AHEC Purchasing. IMPORTANT: Needing something
right away is almost never an acceptable reason for not using an awarded vendor. The only
exception is the case of an emergency, such as a fire or flood.
 Some of the most common State Award issues are:
         Furniture must be purchased from Juniper Valley (Correctional Industries)
         Printing must be purchased from Clicks! (the Auraria printing agency) or from the State
            Central Services printing department
         Office supplies must be purchased from either Faison or Boise Cascade
         Office supplies MAY NOT be purchased from the Book Center
         Copiers must be leased from either IKON Office Solutions or Konica Minolta Corp.
If a vendor has been issued a permissive award, rather than mandatory, you may use another vendor,
but you must document precisely why the awarded vendor(s) could not satisfactorily provide the
goods or services. One major benefit of using a State Award vendor is that prices and terms have
been negotiated by the State. Therefore, purchases do not require competitive solicitation or posting
on BIDS, significantly speeding up the process.

There are some other internal restrictions for purchasing certain goods or services, namely:
        Cell phones for business use must be processed through the Business Services office.
        Any computers, computer-related equipment, or software must be approved by your
           department’s Vice President and be processed by the Information Technology
        All air travel must be processed through one of MSCD’s approved travel agencies. Other
           restrictions apply to travel, such as rental cars and in-state hotels. Contact the
           Accounting Services office to sign up for Travel Training.

The final consideration in purchasing goods is the purpose. All purchases must be for legitimate
business purposes, for the benefit of MSCD, and follow MSCD’s standards for allowable purchases.
If you have any question about whether a purchase is allowable, contact the Accounts Payable office
for clarification.

Question 2: How much does it cost?
Once you know what you are buying, the next thing to consider is the price. The total cost
determines which forms to use and what approvals are required. IMPORTANT: The total cost is the
cost over the fiscal year, NOT one individual purchase, and includes any charges for
shipping/freight handling. Purchases may not be split in any way in order to avoid some part of the
purchasing process.
       CRS 24-103-204 – Any procurement not exceeding the amount established by rule may be
       made in accordance with small purchase procedures established by rules, but procurement
       requirements shall not be artificially divided so as to constitute a small purchase under this

In other words, if you plan to buy 10 cameras for $10,000, which would require competitive
solicitation, you may NOT split the order into two purchases of 5 cameras for $5,000 in order to
avoid the BIDS process.

PROCUREMENT CARD (Procard): A MasterCard credit card, used for small dollar purchases,
not to exceed the cardholder’s transaction limit. Departments may set per transaction limits up to
$4999 for specific cardholders. The card is issued in the name of an individual and cardholders are
not to allow others to use their card. (See Procurement Card Cardholder Handbook for details).
Procurement Card transactions are allocated by individuals within the department to the correct
FOAP using BANNER. Transaction information is fed to the financial database charging the FOAP
indicated. No encumbrance is created. All transactions must be made within State fiscal and
procurement rules.
    o The Procurement Card is:
             The preferred method for small-dollar purchases because it is the simplest, most
               efficient, and least costly means by which to procure goods and services;
             Used to order goods and services by phone, over the internet, or in person;
IMPORTANT: If using the Procard to make an online purchase and the vendor requires any kind of
terms or conditions to be accepted (frequently by clicking an “I accept” button), you may not make
that purchase without consulting with the Contracts Administrator first. Other rules and regulations
apply to Procard usage. Contact the Accounting Services office to sign up for Procard Training.

SPECIAL PURCHASE ORDER (SPO): Created within the department prior to an order being
placed for purchases up to $5,000 and provided to the vendor, thereby documenting the College’s
intent to purchase.
    o The SPO:
             Creates an encumbrance on the FOAP combination to be charged;
             Allows the department to place restrictions on its use, such as when inspection of
               goods is required before payment, and where authorized personnel need to be
             Allows an individual in the department to take it to a vendor, thus providing enhanced
               purchasing capability and flexibility.
             May NOT be used for payments to individuals. Such payments must use an ICPS
               form, if under $5,000.

JUNIPER VALLEY: Furniture orders from Juniper Valley that total $5,000 or less should be put
on a special JVP Order Form, which is available from AHEC Purchasing.

for services to be provided over a specific period of time, such as performances, personal services
contracts, and lectures by visiting speakers. Non-specific, recurring services are not considered to be
a contractor relationship and should be sent through the payroll process. The ICPS form is also used
for appropriate honoraria – paid to individuals only. It should be a token payment and there should
be no prior obligation or contractual commitment.

CHECK REQUEST: Check requests are used in a limited capacity to authorize payment for
purchases not requiring a commitment voucher.
    A Check Request may be used:
            For any purchase from a vendor totaling less than $100 for the fiscal year;
            To reimburse an employee for purchases up to $500 total, only if the employee can
               document that the purchase could not be made following the standard purchasing
               procedures AND attaches an original receipt. The purchase must be non-repetitive
               in nature and proof of payment must be included, i.e., if a receipt is not available, a
               credit card statement could be used. IMPORTANT: Sales tax will not be

      A Check Request may be used for any dollar amount for:
           Dues, memberships, and subscriptions.
           Financial aid or tuition assistance programs (scholarships to students).
           Postage, freight, or other delivery charges (e.g., messenger fees).

      A Check Request may be used to pay a vendor in amounts up to $5,000 for:
           Books (hard copy or electronic media), audiotapes, and videotapes.
           Reprints of articles from journals or other periodicals.
           Page charges to publish articles in journals.
           Tickets to allow admission to events such as theatrical plays.
           Renting of space at exhibits (including set-up fees, furniture rental, and supplies to
             make this space operational).

DEPARTMENTAL ORDER INVOICE (DOI): The Auraria Book Center may be used for some
miscellaneous purchases under $5,000 by submitting a DOI form. If a purchase will total more than
$5,000, the department must process a purchase order through AHEC Purchasing. IMPORTANT:
No office supplies of any kind may be purchased from the Book Center.

OFFICIAL FUNCTIONS: An official function is an event for official business purposes
sponsored by MSCD-authorized personnel that includes food and/or alcohol of any kind.
       Colorado Fiscal Rule 2-7: Official Functions and Training Functions shall be held to achieve
       program objectives and shall be limited to reasonable and actual costs. The attendance of
       State employees at these functions shall be kept to a minimum and shall include only those
       individuals directly related to the purpose of the function. Expenditures shall be kept to a
       minimum as they have the potential of being perceived to be for personal benefit and an
       abuse of public funds. Expenditures incurred for official functions shall be approved by the
       chief executive officer or by a representative of the state agency or institution of higher
       education that has been delegated authority by the chief executive officer.

In all cases, regardless of dollar amount, a completed Official Function form must be in place prior
to the event and approved by the appropriate Vice President or Dean.
    o An SPO must be used when official functions/training functions are estimated to total
         between $100 and $5,000 from one vendor in any fiscal year.
    o A PO must be used when official functions/training functions are estimated to total more than
         $5,000 from one vendor in any fiscal year.

Official Functions include:
    Community relation functions - Events hosted by the College on behalf of external entities or
        activities directly related to the educational, research, or public service mission of the

      Employee recognition functions - Events that recognize College faculty or staff members for
       outstanding service that have prior approval of the Dean, Vice President or President.

      Holiday parties - Events hosted by an MSCD operational unit for associates and employees
       to celebrate an MSCD-recognized holiday. All such events must have prior approval of the
       area Vice President.

      Recruitment functions - Actions to enlist new employees, faculty, etc.

      Student functions – Events hosted by MSCD that may be attended by students in addition to
       MSCD employees and/or associates and directly related to student or educational
       development, such as student recruitment or student program development.

      Occasional (not daily, weekly, or monthly) lunch meetings of only employees and official
       guests of the College. The primary purpose of the meeting is to conduct MSCD business and
       the specific business purpose is stated on the Official Function form.
      Training Function – held to enhance knowledge or educate of the participants. Training
       functions have a written agenda, study materials, and are led by an identified presenter.

The following activities do not qualify as Official Functions:
      Regularly scheduled meetings, including departmental staff and/or committee meetings.
      Lunches, dinners, receptions and other gatherings where the primary purpose is for MSCD
       personnel, (faculty, staff and students), to informally gather for social or personal purposes
       and not to further specific College program objectives. This includes going away receptions
       for non-retiring employees and similar events.
      Gifts and gatherings recognizing occasions of personal importance to employees and non-
       employees that are not directly related to the conduct of MSCD business or accomplishment
       of program objectives. This includes birthdays, weddings, engagements, death or birth in an
       individual's family, illness or hospitalization of an individual, retirement gifts, or other
       "special days".
This policy should not discourage employees or departments from taking up a collection and making
unlimited private gifts to colleagues in appreciation for their services or in recognition of events of
personal importance.

                                         Alcoholic Beverages
  The College does not authorize payment for alcoholic beverages, with the following exceptions:
         Executive-approved official functions
         Purchased for use in Hospitality, Travel and Management Administration (HMTA) courses,
          where the alcoholic beverage is part of the course curriculum.
         Purchased through the MSCD Foundation. Refer to the Foundation policy regarding the
          purchase of alcoholic beverages.

PURCHASE REQUISITIONS/ORDERS: All purchases over $5,000 will be handled by the
AHEC Purchasing Office and may require a Documented Quote, an Invitation for Bids (IFB), or a
Request for Proposal (RFP) to be published on the BIDS system by Purchasing. The department
requiring the goods or services must fill out a purchase requisition and get all appropriate
authorization signatures, including Personal Services review if necessary, then forward the
requisition and all backup information to AHEC Purchasing. IMPORTANT: The purchase
requisition is NOT a purchase commitment voucher. It may not be given to a vendor for any
reason. The purchase may NOT be made until a Purchase Order is issued by AHEC Purchasing.
AHEC Purchasing will arrange the order, as well as shipping and receiving of goods. If a
documented quote is required for the purchase, it must be posted on BIDS at least 3 days. If an IFB
is required, the solicitation must be posted 14 days and at least another 15 working days should be
allowed for the selection process. For an RFP, the solicitation must be posted a minimum of 30 days
and at least another 15 working days should be allowed for the selection process. Keep in mind,
however, that because of the complex nature of formal solicitations, a significant amount of time
should be allowed for preparation of the request (1 to 3 months). After bids are opened and a
purchase order is issued you will also need to allow for vendor delivery time.
 The difference between an IFB and an RFP is that an IFB is used when specifications are clear
     and concise, and an RFP is used when the specifications are unclear, complicated, and it may be
     important to weigh other factors as well as price.
 When an item is out for bid the requesting party and solicited vendor may not communicate in
     any manner - all questions are to be handled by AHEC Purchasing. Any deviation from this
     procedure could render the bid null and void, in which case the bid will be canceled and a period
     of 6 to 8 weeks must lapse before another requisition can be processed. This procedure is to
     protect all parties involved against collusion, bid rigging, or other violations, which are
     punishable under law.
 The authority for obtaining quotes or bids lies with AHEC Purchasing, not the department.

OPEN PURCHASE ORDERS: If your department intends to repeat purchases for similar goods
over a long period of time, i.e., office supplies, you may use an Open Purchase Order (OPO). An
OPO is an open contract with an effective date, an expiration date, and specific dollar limits, which
allows you to purchase directly from a vendor. There is no competitive solicitation or dollar limit
for goods purchased on an OPO from a vendor that has been issued a State Price Award. Services
from a State Award vendor may be purchased with an OPO up to $50,000.

CONTRACTS: Contracts are required for purchase of services over $50,000 or purchase of goods,
if it includes services that exceed $50,000 of the total purchase price. They may also be used in
other circumstances when not specifically required, such as complicated or technical projects in
which MSCD may be at greater risk. Contracts contain detailed terms and conditions to protect the
College’s and the State’s interests. Because of the increased risk involved, they may only be
processed by MSCD’s Contracts Administrator and may only be signed by the College’s President
or his/her authorized representative.

$0 - $5,000
1)       Must use State Price Agreement if available.
2)       Use either an SPO or PR (to have a purchase order issued) depending on Agency dollar limits.
3)       No Bid or Documented Quote needed to be published on the BIDS system.
4)       Attach any documentation you may have with the request.
5)       Use the State Procurement Card when possible.
6)       If it is a service of any kind, use an ICPS form and attach a completed Personal Services Checklist, which will
         be reviewed for personal services/employee status by Accounting Services. Obtain the proper insurance
         certificates listing AHEC and the State of Colorado as additional insured.

$5,000 - $50,000
1)       Must use State Price Agreement if available, in which case no competition is required.
2)       Personal Services: HR must sign before sending to purchasing. Attach a completed Personal Services Checklist
         to the purchase requisition.
3)       Documented quotes (if not using a State Price Agreement):
         a. Goods – over $5,000 but under $50,000;
         b. Services – over $25,000 but under $50,000.
         c. Documented quotes must be published on the BIDS system by the Purchasing Office;
         d. must be published a minimum of three (3) days or more based on the requirements, at the discretion of the
              purchasing agent.
4)       Send all information/specifications you may have with the PR.
5)       Must have a purchase order issued by Purchasing.

Over $50,000
1)     Must use State Price Agreement if available, in which case no competition is required.
2)     Personal Services: HR must sign before sending to purchasing. Attach a completed Personal Services Checklist
       to the purchase requisition.
3)     Must be published on the BIDS system by Purchasing; solicitation types available are:
       a.       Invitation for Bid (IFB) – must be published for a minimum of 14 calendar days,
       b.       Request for Proposal (RFP) – must be published for a minimum of 30 calendar days. If an RFP is
                used, then the personal services form must be sent to HR before purchasing may start the process.
4)     Can be a one time or multi-year purchase if applicable.
5)     Please attach all information/specifications you may have with the PR.
6)     Must have a purchase order issued by Purchasing for goods; and a contract executed by Agency contracting
       authority for services.

               Dollar Threshold Requirements for Goods and Services
                         $0-5000              $5,000.01-25,000          $25,000.01-50,000      $50,000.01 and up
Discretionary     Goods and services in    Discretionary for       No                        No
                  this range may be        Services only.
                  purchased on a
                  discretionary basis.

Personal          Not formally required,   Required for Services   Competitive               Competitive
Services – fair   but purchaser should     only.                   solicitation determines   solicitation determines
& reasonable      be able to show that                             fair & reasonable         fair & reasonable
pricing           prices are fair &                                pricing.                  pricing.
determination     reasonable.

Personal          Required for Services    Required for Services   Required for Services     Required for Services
Services Waiver   only.                    only.                   only.                     only. Required for
Review                                                                                       Goods, if purchase
                                                                                             includes services over

Competitive       Not required.            Required for Goods      Required for both         Required for both
Solicitation                               only. Optional for      Goods & Services.         Goods & Services.
Required                                   Services.

Documented        Optional for both        Required for Goods      Required for both         NOT allowed for
Quote             Goods & Services         only, optional for      Goods & Services.         Goods or Services.

Competitive       Not required.            Optional for both       Optional for both         Required for both
Sealed Bid                                 Goods & Services.       Goods & Services.         Goods & Services,
                                                                                             unless an RFP is used.

Request for       Optional for both        Optional for both       Optional for both         Required for both
Proposal          Goods & Services.        Goods & Services        Goods & Services.         Goods & Services,
                                                                                             unless Sealed Bid is

Formal Written    Not required.            Optional for both       Optional for both         Required for Services.
Contract                                   Goods & Services        Goods & Services          Optional for Goods,
Required                                                                                     unless the purchase
                                                                                             includes services over


State Award List

Code of Ethics


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