Low Dollar Purchase _LDP_ - DOC Guidelines

Document Sample
Low Dollar Purchase _LDP_ - DOC Guidelines Powered By Docstoc
					              University of Alberta


   Low Dollar Purchase (LDP)
   System Procedure Manual




Low Dollar Purchase (LDP) System Manual 12Nov08.doc   Page 1 of 13
                               Table of Contents
1. System Objective                                             3

2. System Benefits                                              3

3. Key Areas & Responsibilities

   Supply Management Services (SMS)                             3
   Suppliers                                                    3
   Departments                                                  3

4. General Procedures and Requirements

   Procurement & Contract Management and
   Supplier Payment Services (SPS)                              4
   Distribution Services/Customs Division                       4
   Suppliers                                                    5
   Departments                                                  6

5. System Monitoring                                            9

Appendix A – Supplier Compliance                               10

Appendix B – Department Compliance                             11




Low Dollar Purchase (LDP) System Manual 12Nov08.doc   Page 2 of 13
1.     System Objective

       The primary objective of the Low Dollar Purchase (LDP) System is to provide an
       efficient, distributed procurement method for lower dollar value goods and services.
       The LDP System is restricted to those instances where purchases cannot be
       made using the Corporate Card or Preferred Supplier Agreement (formerly
       Direct Order Contract) Systems and all purchases must comply with the
       procedures and requirements specified in the LDP Procedure and System
       Manual. The LDP System can be used for Canadian purchases with a value of
       $5,000.00 CDN or less, excluding GST and $1,600.00 for Foreign Orders excluding
       GST. Departments are to place the orders directly with the Supplier and instruct the
       Supplier to send invoices directly to the ordering Department.

2.     System Benefits
       Some of the key benefits of using the LDP System are as follows:

       a) Direct ordering capability, for purchase transactions where other distributed
          procurement methods (Corporate Card, Preferred Supplier Agreements,
          Standing Orders) are not suitable for the purchase;
       b) Reduction in paper volume (i.e., fewer purchase requisitions and purchase
          orders);
       c) Reduction in order cycle time.

3.     Key Areas & Responsibilities

       Supply Management Services (SMS)
       SMS is responsible and accountable for monitoring LDP System transactions for
       compliance with the LDP Procedure and System Manual. Distribution Services –
       Central Receiving is responsible for the receipt and re-distribution of all incoming
       shipments from Suppliers. Customs Division is responsible for the customs
       clearance of all U.S. and International shipments.

       CONTACTS:             Lorraine Ulmer (Procurement & Contract Management)
                             492-4192

                             Phil Webb (Distribution Services)
                             492-5133

                             Nicole Smereka (Customs Division)
                             492-6849

       Suppliers
       Suppliers are responsible and accountable for processing LDP System orders
       accurately and for recording appropriate information as provided by the ordering
       Department on all documents (e.g., packing slips, invoices, customs paperwork).


Low Dollar Purchase (LDP) System Manual 12Nov08.doc                      Page 3 of 13
       Departments
       Departments are responsible and accountable for ordering, receiving goods and/or
       where applicable, verifying that services were received, ensuring that invoices are
       reviewed, coded correctly, approved in a timely manner by an authorized individual
       and forwarded to SMS. Departments are responsible for reconciling transactions in
       accordance with the LDP Procedure and System Manual. All purchases must be
       made in strict compliance with all donor/sponsor requirements and University
       policies and procedures.

4.     General Procedures and Requirements

       Procurement & Contract Management and Supplier Payment Services (SPS)

       1. Review of LDP System transactions: Procurement & Contract Management staff
          will randomly review LDP System transactions to verify the validity of the
          purchasing method.

       2. GST code: SPS is responsible for ensuring all invoices are assigned the correct
          GST code. Departments are responsible for assigning the correct GST code
          if the transaction is a domestic transaction and not a default code “GST”
          transaction (e.g., assign code “ITC” for commercial transactions and Code
          “Book” for book orders.)

       3. Invoicing: Upon receipt of an authorized invoice from the ordering Department,
          SPS will process the invoice for payment. The voucher description will be
          prefaced with the initials LDP.

       Distribution Services

       1. Receipt, tracking and delivery of goods: When goods are delivered to
          Distribution Services - Central Receiving from suppliers, Distribution Services
          will:

          a) Ensure that the shipment is for a University Department, and review
             shipping documents and/or packages for accurate delivery information
             (e.g., name, ordering Department, room number, and building);
          b) Check packages for visible exterior damage.

          Items are scanned into the receipt tracking system for tracking purposes, and
          staged for delivery to Departments.

       2. Returned shipment errors: Distribution Services will return all shipments
          delivered in error (i.e., not for a University Department).

       3. Customs clearance: Customs Division will ensure that all items received from


Low Dollar Purchase (LDP) System Manual 12Nov08.doc                     Page 4 of 13
          U.S. and International origins have the appropriate applicable duties and taxes
          assessed, and are in compliance with Canada Border Services Agency
          legislation and regulations.

       4. Damaged shipments: If there is visible exterior damage, Distribution Services will
          advise the ordering Department and will contact the carrier/courier company and
          initiate the damage claim process.

       5. Document retention: Distribution Services will retain an electronic record of all
          waybills, pro-bills and trip tickets. (The Customs Division will retain customs
          documents) (i.e. commercial invoices), if applicable, will be retained for the
          current year plus the previous 6 years. It is the responsibility of the ordering
          individual to verify and retain the packing slips of USA/International shipments.

       Suppliers

       1. Acceptance of orders: LDP Orders are generally accepted by phone, in person,
          email, web or fax.

       2. Pricing: The Supplier must confirm pricing with the ordering Department.

       3. Shipping information: The Supplier must request a ship-to address (including
          department name, room number and building), contact name and phone
          number. This information is required for accurate delivery of packages. For U.S.
          and international shipments, the Supplier must ensure that all required Customs
          documentation is completed accurately and provided with the shipment (e.g.,
          commercial invoice, certificate of origin). The Supplier must ensure that the
          ordering Department’s information is included on Customs documents.

       4. All orders must be shipped to University of Alberta, Supply Management
          Services, Central Receiving, 116 Street & 85 Avenue, Edmonton, Alberta,
          Canada T6G 2R3

       5. Invoice information: All invoices are to be sent directly to the ordering
          Department. The Supplier must request an invoice mailing address including the
          name of the Department, room number, building, postal code and contact name.


       6. Billing: The Supplier must provide, at a minimum, the following information on all
          invoices:

          a)   Invoice number
          b)   Ship-to address
          c)   Contact name and phone number
          d)   Detailed description of goods and/or services including quantity, unit pricing
               and extensions



Low Dollar Purchase (LDP) System Manual 12Nov08.doc                       Page 5 of 13
          e)   Net amount
          f)   GST and GST Registration Number
          g)   Gross amount
          h)   Speed code and account (optional)

          *Non-North American Purchase: All payments to non-North American banks will
          be made via wire transfer. Invoices must include: Beneficiary Bank, Bank Name,
          Bank Address, Bank ID in the form of a SWIFT, ABA CHIPS number and a Bank
          Number.

       7. Terms and Conditions: The University of Alberta’s Terms and Conditions of
          Purchase Order as posted at
          www.uofaweb.ualberta.ca/vpfinancesms//pdf/SupplementalConditionsofPurchaseOrd
          er05Dec06.pdf shall govern transactions for commodity purchases. The
          University of Alberta’s Supplementary Conditions of Purchase Order as
          posted at
          www.uofaweb.ualberta.ca/vpfinancesms//pdf/TermsandConditionsofPurchaseOrder2
          7Mar07.pdf shall govern transactions for the purchase of services.

       8. System restrictions: Suppliers cannot take orders for the following without
          an official University of Alberta Purchase Order issued by Supply
          Management Services:

          a) Construction and Construction Design Services *
          b) Ongoing equipment maintenance and software license agreements
          c) Dangerous goods and any other restricted items (refer to Purchase of
             Restricted Items Procedure)
          d) Cell Cultures (e.g., American Type Cultures)
          e) Office Imaging Equipment
          f) Pressure Equipment
          g) Travel or hosting (catering services are permitted)
          h) Lease Agreements
          i) Compressed Gases and Related Cylinder Rental
          j) Restricted or Controlled Goods Entering Canada from Foreign Suppliers
             Regardless of Value – see SUPPLEMENTAL RESTRICTIONS (Appendix C)
          k) Goods Valued in Excess of $1600 CAD (or foreign equivalent) Entering
             Canada from Foreign Suppliers

          *    Departments of Planning and Infrastructure / Ancillary Services are not
               subject to this restriction.

       Departments

       1. Purchasing and Signing Authority: LDP System orders are to be placed only by
          authorized University staff in accordance with the University Signing Authority
          and Delegation of Signing Authority Policy – All Funds and the Signing Authority



Low Dollar Purchase (LDP) System Manual 12Nov08.doc                     Page 6 of 13
          and Approval Procedure. Generally orders are placed by phone, in person,
          email, web or fax. SMS does not require Purchase Requisitions for LDP
          System orders. An LDP System Order Form and Order Log is available in the
          Forms Cabinet at:

          http://www.financial.ualberta.ca/formscabinet.cfm

       2. System emphasis: Domestic orders cannot exceed $5000 CAD (excluding
          GST) and Foreign orders cannot exceed $1600 CAD using this purchasing
          method. Purchases greater than $5,000.00 in value must be processed
          with a Purchase Requisition and sent to SMS for Purchase Order issuance
          and processing. Purchases must be made within the limit value of
          $5000.00 CDN or less. Splitting transactions in order to circumvent the
          transaction limit is strictly prohibited.

       3. Foreign Orders: Provide the foreign supplier with a copy of the Customs
          Clearance Form

          The Customs Clearance Form is a written indication for our customs broker
          that a shipment of goods entering Canada is the responsibility of the
          University of Alberta. To expedite customs clearance and avoid accounting
          delays, this form must be complete and accompany all goods entering
          Canada for the University, whether the goods are purchased or are supplied
          at no-charge. Shipments without this form attached will be subject to delays
          while our broker verifies ownership and accountability.

          The Customs Clearance Form is available in editable PDF format in the
          SMS Forms Cabinet at:
          http://www.financial.ualberta.ca/formscabinet.cfm

          Reminder: Foreign orders exceeding $1600 require a Purchase
          Requisition. When a Purchase Order is issued the Customs Clearance Form
          is not required. The formal PO number is sufficient indication for our broker
          that they may clear the goods on behalf of the University.

       4. Equipment purchases: Are required to be reported in writing to Financial
          Services, Equipment Inventory Services, 3rd floor Administration Building. Refer
          to Appendix B – Department Compliance for more detailed information.

       5. System restrictions: Orders for the following must be processed through
          Supply Management Services:

          a. Construction and Construction Design Services *
          b. Ongoing equipment maintenance and software license agreements
          c. Dangerous goods and any other restricted items (refer to Purchase of
             Restricted Items Procedure)
          d. Cell Cultures (e.g., American Type Cultures)


Low Dollar Purchase (LDP) System Manual 12Nov08.doc                     Page 7 of 13
          e. Office Imaging Equipment
          f. Pressure Equipment
          g. Travel or hosting (catering services are permitted)
          h. Lease Agreements
          i. Restricted or Controlled Goods Entering Canada From Foreign Suppliers
             Regardless of Value – see SUPPLEMENTAL RESTRICTIONS (Appendix C)
          j. Goods Valued in Excess of $1600 CAD (or foreign equivalent) Entering
             Canada from Foreign Suppliers

          *    Departments of Planning and Infrastructure / Ancillary Services are not
               subject to this restriction.

          Payments to individuals and small unincorporated companies (i.e., sole
          proprietorships) for services must be processed through Staff and Student
          Payments (S & SP) using a Contract for Services.

       6. Goods and Services Tax (GST): All invoice transactions will default to Code
          “GST”. All imported goods are subject to the assessment of GST upon entry into
          Canada. If GST is included in the payment transaction for the goods, a copy of
          the backup documentation and the proof of payment (voucher id) is to be sent to
          the attention of the Customs Division. A refund for the GST paid to CRA will be
          processed. This would apply to only those purchase transactions where Code
          “GST” was applied and the 67% rebate is taken. Departments are responsible
          for assigning the correct GST code if the transaction is a domestic
          transaction and not a default code “GST” transaction (e.g., assign code
          “ITC” for commercial transactions and Code “Book” for book orders.)

       7. Invoicing: LDP System invoices are to be sent directly by the Supplier to the
          ordering Department for review and approval.

          Order placement: When placing an order with a Supplier, it must be placed
          according to the procedures in this LDP Procedure and System Manual.
          Departments must provide the following information to the Supplier:

          a) Shipping Address: University of Alberta Central Receiving
                                116 Street & 85 Avenue
                                Department Name
                                Room Number and Building
          b) Name of ordering Department and individual to whom the item is to be
             shipped
          c) Contact name and phone number
          d) VALID 5-digit SpeedCode and 6-digit account (optional*)
          e) Invoice Address:   University of Alberta
                                Department name
                                Room Number and Bldg
                                Name of Individual placing the Order
                                Postal Code


Low Dollar Purchase (LDP) System Manual 12Nov08.doc                    Page 8 of 13
          *   Optional: SpeedCode and Account Number. If a Supplier requests a
              Purchase Reference Number the SpeedCode and Account Number may be
              provided.

          Non-North American Purchase: All payments to non-North American banks
          will be made via wire transfer. Invoices must include: Beneficiary Bank, Bank
          Name, Bank Address, Bank ID in the form of a SWIFT, ABA CHIPS number
          and a Bank Number.

          NOTE: Instruct the Supplier to provide the above information on all related
          documents.

       8. Disputed items: Departments are responsible for attempting to resolve disputed
          issues with Vendors (e.g., incorrect charge on invoice). SMS will provide
          assistance if the dispute is not easily resolved.

       9. Chartfields: It is the ordering Department’s responsibility to ensure that
          appropriate account numbers and speed codes are supplied. A speedcode
          might be active but if the project/grant within that speedcode is not active
          throughout the life of the transaction, there will be delays in processing. In such a
          case, an attempt will be made to acquire a valid speedcode, however, if one is
          not received within 5 business days, a default departmental operating speedcode
          will be used.

       10. Department receiving: Upon delivery of a shipment, ordering Departments must
           confirm the following:

          a) reconcile shipment for number of items received and reference number (if
             applicable);
          b) check the shipment for any damages;
          c) note and report any discrepancies or damages to the Supplier, Supplier
             Payment Services and, if the shipment is of U.S. or international origin, to the
             Customs Division.

       11. Processing invoices: Upon receipt of the invoice, ordering Departments must:

          a) confirm receipt of materials or equipment in good order at the department
             location or on satisfactory completion of services;
          b) confirm accuracy of the invoice;
          c) apply appropriate speed code and account number;
          d) assign the correct GST code if the transaction is a domestic transaction and
             not a default code “GST” transaction (e.g., assign code “ITC” for commercial
             transactions and Code “Book” for book orders.)
          e) have an authorized University staff member sign the invoice, along with the
             printed name of the authorized signature



Low Dollar Purchase (LDP) System Manual 12Nov08.doc                         Page 9 of 13
          f) add the printed name of the authorized staff member below their signature on
             the invoice.
          g) forward the invoice to SMS Supplier Payment Services for processing.

       12. Document Retention: All purchase documents, packing slips, waybills, invoices
           and dangerous goods paperwork are to be retained in accordance with
           University of Alberta policies and procedures. For Customs purposes, all
           documents relating to U.S. or International Shipments must be retained. It is
           recommended that these documents be filed alphabetically by supplier name.

       13. Reconciliation: Reconciliation for any transaction must take place when the
           monthly General Ledger reports are made available. Invoice descriptions will
           appear on the General Ledger with the prefix of LDP. Departments are
           responsible for ensuring that expenses are recorded with the appropriate
           SpeedCode, account code, and the appropriate GST code and GST amount.

5.     System Monitoring

       SMS will review selected LDP System transactions for compliance with the LDP
       Procedure and System Manual.

       In addition, the reviews will cover the following areas:

       1. Supplier Compliance (Appendix A)
       2. Department Compliance (Appendix B)




Low Dollar Purchase (LDP) System Manual 12Nov08.doc                   Page 10 of 13
                          APPENDIX A – Supplier Compliance


   Did the shipment contain all required shipping information?


   Did the invoices contain all required information?


   Did the Supplier provide required shipping documents, if applicable? Was
   necessary information contained in the documents?


   Customs Documents (e.g., commercial invoice, certificate of origin, packing slip)




Low Dollar Purchase (LDP) System Manual 12Nov08.doc                   Page 11 of 13
                        APPENDIX B –Department Compliance


Were all packages and items received as per the packing slip?

   Did an authorized individual or properly delegated authority authorize the purchase
   (include their signature and printed name)?

   Was invoice information accurate?

Were the following documents retained?

       Invoice copy
       Packing Slips
       Customs documents (if applicable)

   Was the transaction reconciled to the GL?

   Were equipment items reported to Equipment Inventory Services?

   Equipment purchases that meet the following are to be reported to Financial
   Services, Equipment Inventory Services, 3rd floor Administration Building.

   - Equipment   defined as re-locatable and not part of building
   - Life expectancy of more than one year under normal use
   - An identity which does not change with use
   - Unit or system nature for which formal accountability is practical (i.e. attractive for
    theft)
   - Usually repaired and not replaced when damaged
   - Leased equipment
   - Equipment donated or transferred to the University of Alberta
   - Equipment purchased on Professional Expense Allowance
   - Reimbursements for Equipment




Low Dollar Purchase (LDP) System Manual 12Nov08.doc                       Page 12 of 13
                         APPENDIX C –Supplemental Restrictions


   LDP System Restrictions

   Restricted or Controlled goods entering Canada from USA and International locations
   are not to be ordered using the Low Dollar Purchase System regardless of the value
   of the goods. These commodities may require permits, licenses or certificates which
   must be obtained prior to the order being placed with the foreign supplier. Unless
   otherwise specified below, a Purchase Requisition must be used to order the following
   types of commodities from Foreign Suppliers.

       i.   Live Animal, Fish and Plants (Order lab animals through HSLAS)
      ii.   Animal Embryos and Semen
     iii.   Human and Animal Organs, Tissues and Sera
    iv.     Human, Animal and/or Plant Pathogens and Toxins
      v.    Food Products (i.e. Dairy, Meat)
    vi.     Agricultural Products (i.e. Seeds, Soil, Lumber, Turkey, Chicken)
    vii.    Fertilizers
   viii.    Carbon Steel and Specialty Steel Products (i.e. Stainless Steel Wire)
    ix.     Textile and Apparel Products
      x.    Rough Diamonds
    xi.     Explosives, Propellants, Safety Flares, Pyrotechnics
    xii.    Commercial Alcohols
   xiii.    Radioactive Isotopes
   xiv.     Precursor Chemicals and Controlled Drugs or Narcotics
   xv.      Energy-Using Products (i.e. Furnaces, Boilers, Heaters, Pumps, Air
            Conditioners)




Low Dollar Purchase (LDP) System Manual 12Nov08.doc                    Page 13 of 13