Purchasing Policy and Procedures
Contents
1Introduction
2Purchasing Objectives
3Associated Polices and Guideline Documents
4Purchasing Strategy
5Good Purchasing Practice
6Responsibilities of Authorised Purchasers
7Code of Ethics
8Financial Regulations
8.1 Introduction
8.2 Delegation of Authority for Purchasing
8.3 Petty Cash
8.4 Purchase Card
8.5 Purchase Orders
8.6 Tendering
8.7 Building Contracts
8.8 EU Tendering
8.9 Payment of Invoices
8.10 Unauthorised Purchases
8.11 Personal Purchases
8.12 Traders, Credit Cards or Identity Cards
8.13 Employees as Suppliers
9Purchasing Procedures
9.1 Introduction
9.2 Process
9.3 Goods Value
9.4 Minimum Order Value
9.5 Exemption
9.6 Retention of Documentation
9.7 Advance Payments to Suppliers
9.8 Fair Competition
9.9 Health & Safety
- Identification of the Purchase Requirement
- Introduction
- Sourcing of Goods
- University Purchasing Contracts
- Computer and Computer Related Contracts
- Building Contracts
- European Union Contracts
- North West University Purchasing Consortium Contracts
- Nationally Negotiated Contracts
- Factors Relevant to Purchase Decisions
11 Purchase Requisitioning
11.1 Introduction
11.2 Scope
11.3 Forms
12 Petty Cash
12.1 Introduction
12.2Maximum Amount of Claims
12.3 Reimbursement of Amounts Spent
12.4 Replenishment of Floats
12.5 Restrictions
12.6 Forms
13 Purchase Card Purchases (VISA)
13.1 Maximum Value of Transactions
13.2 Process
13.3 Card Holder
13.4 Restrictions
13.5 Administration
13.6 Leavers
13.7 Unauthorised use of the Card Details
14 Quotations: The Sourcing Exercise
14.1 Introduction
14.2 Scope
14.3 Single Supplier
14.4 Quotation Evaluation
14.5 Exemptions
15 EG2 Process
15.1 Scope
15.2 Exemptions
15.3 Purchase Order Processing
15.4 Purchase Invoice Processing
16 Tendering
16.1 Introduction
16.2 Scope
16.3 General Rules
16.4 Evaluation of Tenders
16.5 Tender Process
16.6 The Contract
16.7 Debriefing Unsuccessful Suppliers
17 EU Tender
17.1 Introduction
17.2 Scope
17.3 Legislation
17.4 Contract Award
17.5 Statistical Returns
18 Purchase Ordering
18.1 Introduction
18.2 Process
18.3 Responsibilities
18.4 Goods Descriptions
18.5 Terms and Conditions
18.6 Signatures
18.7 Oral Orders
18.8 Changes to Orders
18.9 Cancellation of Orders
18.10 Minimum Order Value
18.11 Order Follow Up (Expediting of Purchase Orders)
18.12 Contract Orders
18.13Service, Rental and Maintenance Agreements
19 Goods Receipting
20 Invoice Processing
20.1 Process
20.2 Invoices without a Purchase Order
20.3 Restrictions
21 Payment Processing
21.1 Introduction
21.2 Process
21.3 Sundry Payments
21.4Forms
22 Foreign Transactions
22.1 Introduction
22.2 Euros or Dollars
22.3 Other Currencies
22.4 Sundry Payments
22.5 Forms
23 Suppliers
23.1 Master Files
23.2 Supplier Statements
23.3 Debit balances
23.4Forms
1. Introduction
1.1The University is committed to the pursuit of excellence and the adoption of best current practice in the purchasing function
1.2. Reporting to the Executive Group, the Director of Finance has been given overall responsibility for the University wide function. The University Purchasing Manager will be responsible to the Director of Finance for day to day control.
1.3. It is recognised that there is a need for an effective stores operation in ensuring the efficient acquisition of goods and the University has a separate policy governing School or Section stores ("Stores and Stockholding Policy").
1.4. Compliance with both the Financial Regulations and the procedures included in this document is mandatory.
2. Purchasing Objectives
2.1. To require all nominated personnel for all budget centres/grant holders, irrespective of the source of funds, to obtain supplies, services and equipment at the lowest possible cost consistent with quality and delivery requirements and in accordance with sound business practice. Factors to be considered in determining whether value for money is being obtained must, where appropriate, include:
Purchase costs
Fitness for purpose
Firmness of price (e.g. fixed or otherwise)
Foreign exchange risks and costs
Terms of payment
Length of warranty or period of free maintenance
Running costs (e.g. spares, consumable items, fuel, water, and electricity)
The cost of any required building or services alterations
The likely sale or scrap value
2.2. To consider, in sourcing, the best practicable environmental option so that products purchased provide the most benefit or least damage to the environment as a whole, at acceptable costs in the long and short term.
2.3. To ensure that all designated purchasing personnel are suitably trained or qualified to allow them to carry out their function in a professional and effective manner.
2.4. To ensure that all designated purchasing personnel provide (where requested) the required reports to the University Head of Purchasing to allow purchasing performance to be evaluated and consolidated reports to be presented to the University Finance Committee and/or HEFCE when required.
2.5. To fully support and further develop co-operative relationships between the commodity groups of the North Western Universities Purchasing Consortium to increase mutual benefit.
2.6. To comply at all times with the European Community Procurement Directives and Regulations.
2.7To comply with all legislative requirements including those of the Health and Safety at Work Act 1974; Regulations issued by the Health and Safety Executive and other relevant safety legislation (e.g. The Food Act).
2.8. To ensure that the University has separate arrangements for specialist professional services encompassing, amongst others, legal, audit and tax. Enquiries should be made in all such cases to the Director of Finance.
2.9. To develop present arrangements, all purchasing will be in accordance with the strategy set out in section 4.
- Associated Policy and Guideline Documents
3.1. Associated Policy and Guideline documents are issued periodically. These form part of the Purchasing Policy and the contents have the same mandatory force as the Purchasing Policy. Documents currently include:
- Stores and stockholding policy
- Disposal of equipment and furniture
3.2. Several policy and guideline documents are currently under construction. Once approved by Finance Committee, these documents will have the same force as those listed in 3.1. The documents under construction include:
- Hire of consultancy (including acquisition of teaching services from non-staff)
- Purchase of print
- Purchase of design
- Purchase of advertising
- Purchase of travel
4.Purchasing Strategy
4.1The Purchasing strategy provides a list of the function’s targets in respect of all aspects of its service to the University. The overall aim of the strategy is to provide a cost effective purchasing service which delivers value for money in all aspects of its operation to the total satisfaction of the customer.
4.2 Each approved Faculty and School purchasing officer will be required to perform their purchasing duties in accordance with the targets listed in the strategy to ensure that cohesive standards of service and performance are achieved.
4.3 The performance of purchasing officers and University purchasing against the targets of the strategy are part of the annual reports required by the head of University purchasing
4.4.1Purchasing Targets
These set the standards for the performance of the University staff and are composed of two elements:
- Purchasing Foundations
- Purchasing Practice
4.4.2Purchasing Foundations
Component Aim
Method of focusing purchasing resource By Pareto analysis (concentrating resource on high spend areas)
Expenditure analysis available By supplier, item and commodity
Information systems Full commodity based coding system
Purchasing organisation Full commodity based purchasing function (where all available expertise is utilised)
Purchasing mission Top quality customer service
Purchasing objectives Lowest total acquisition cost
Performance measures Low cost leading to performance improvement
Management support Full purchasing agenda on main committee
Professional standard Specialist resources CIPS or NVQ trained
Strategy definition Commodity based, market and user focused
4.4.3Purchasing Practice
Component Aim
Initiative to aggregate spend Major spend through Consortia and expert Purchasers
Substitution / alternative initiatives Partnership suppliers develop alternatives
Specification Full specification as opposed to brand derivation
Purchasing research Purchase index tracking, purchasing libraries
Post order management Formal expediting , aged order analysis
NegotiationDelivery date, extras, price reduction, warranties and cost breakdowns
Supplier selection Competitive tender, approved suppliers and supplies and vendor appraisal where appropriate
Supplier assessment Formal contract management where appropriate, defects, late deliveries and problems
5Good Purchasing Practice
5.1The guidelines covering good purchasing practice are contained in the report on "Good Purchasing Practice" by Ernst & Young and published by the committee of Vice Chancellors and Principals. A copy of this document must be available to and used by all nominated University purchasers.
5.2The document focuses upon day to day operations of the purchasing function and provides outline procedures for effective purchasing within a university. This will provide all nominated University purchasers with relevant guidance and support as they carry out purchasing activities.
5.3 The document covers all aspects of the procurement cycle including:
Specification
Sourcing
Enquiring and Tendering
Evaluation of Quotation and Tenders
Negotiation
Ordering and Award of Contract
The Management of the Purchase Order
General Instruction on Invoicing and Payment
A General Introduction to Contract Law
5.4 This document must be used in conjunction with the University's Purchasing Policy, Procedures and Regulations.
5.5 A copy of the document can be obtained by contacting the University Purchasing Manager.
6Responsibilities of Authorised Purchasers
6.1.1 University nominated Purchasers must at all times comply with all aspects of the University's Purchasing Policy, Procedures and Regulations.
6.1.2. Responsibility is delegated to all nominated Purchasers from the Salford University Head of Purchasing to ensure compliance with the University's Purchasing Policy, Procedures and Regulations.
6.1.3. Each University nominated Purchaser must be appropriately trained or qualified in order to carry out the function.
This will entail either:
- Corporate or student membership of the Chartered Institute of Purchasing and Supply (student membership entailing the ongoing study for attainment of full membership).
- Attainment of other purchasing qualifications such as N.V.Q. level 2, 3 or 4 (with training assistance offered through the University Purchasing Manager)
6.1.4. Every nominated purchaser is responsible for the provision of a purchasing service incorporating all aspects of the procurement cycle as detailed in section 9 of the Purchasing Policy "Good Purchasing Practice", the Purchasing Procedures (section 5) and the Financial Regulations Purchasing (Section 8).
6.2 Duties
6.2.1. Nominated University Purchasers will be functionally responsible for and report on all purchasing matters to the University Head of Purchasing through the University Purchasing Manager.
6.2.2. Certain University Purchasers will be responsible (upon request) for the production of an annual report on their purchasing activities which will be submitted to the Head of University Purchasing through the University Purchasing manager.
6.2.3. The annual report will inter alia provide details on the following:
Order throughput quantities
Savings achieved against spend allocation
Resistance to price increase requests on major value purchases
Timeliness of purchasing actions
Further details of these measurements will be advised by the University Purchasing Manager.
6.2.4. Specialised University Purchasers will be responsible for provision of a Purchasing Library covering all aspects of the commodities for which they are responsible.
6.2.5. Specialised University Purchasers will be required to provide advice and assistance in their specialist product area to other purchasers within the University.
6.2.6. Certain University Purchasers will have the responsibility for representation of the University on the NWUPC. It will be their responsibility, through Purchasing Services, to ensure the circulation of NWUPC information to interested purchasers within the University and also to provide feedback to the NWUPC from all University areas conducting purchase of the relevant commodities.
6.2.7.Each Purchaser will be responsible for the liaison with any University Store which is stocking the commodities which the post holder is responsible for. This will include the provision of any necessary usage and buying information which may affect the stock holding policy for any stock line or an economic ordering policy.
7 Code of Ethics
7.1 Introduction
7.1.1The ethical code is based on that adopted by the Chartered Institute of Purchasing and Supply, a summary of which is set out below.
7.2 Precepts
7.2.1Staff shall never use their authority or office for personal gain and shall seek to uphold and enhance the standing of the University by:
a. maintaining an unimpeachable standard of integrity in all their business relationship both inside and outside the University:
b. fostering the highest possible standards of professional competence amongst those for whom they are responsible:
c. optimising the use of resources for which they are responsible to provide the maximum benefit to the University and their School or Section:
d. complying both with the letter and the spirit of:
- the Laws of England:
- such guidance on professional practice as may be issued by the University from time to time:
- contractual obligations.
e. rejecting any business practice, which might reasonably deemed improper.
7.3 Guidance
7.3.1In applying these precepts, staff should follow the guidance set out below:
a. Declaration of Interest - Any personal interest, which may impinge or might reasonably deemed by others to impinge on a member of staff's impartiality in any matter relevant to his or her duties, should be declared. Personal interest includes that of immediate family and friends.
b. Confidentiality and Accuracy of Information - The confidentiality of information received in the course of duty should be respected and should never be used for personal gain: information given in the course of duty should be true and fair and never designed to mislead.
c. Competition - While bearing in mind the advantages to the University of maintaining a continuous relationship with a supplier, any arrangement which might, in the long term, prevent the effective operation of fair competition, should be avoided.
d. Business Gifts - Business gifts, other than items of very small intrinsic value such as business diaries and calendars, should not be accepted. Items of a personal nature as for house or private use should be declined.
e. Hospitality - Modest hospitality is an accepted courtesy of a business relationship. However, the recipient should not allow him or herself to reach a position whereby he or she might be deemed by others to have been influenced in making a business decision as a consequence of accepting such hospitality; the frequency and scale of hospitality accepted should not be significantly greater than the University would be likely to provide in return.
7.3.2When it is not easy to decide between what is and is not acceptable in terms of gifts and hospitality, the offer should be declined or advice sought from the staff member's superior or the University Purchasing Manager.
7.3.3The official version of the Ethics code of the Chartered Institute of Purchasing and Supply is available by contacting the University Purchasing Manager.
8. Financial Regulations
8.1 Introduction
These regulations are an extract from the financial regulations approved by the University in June 1999.
8.2 Delegation of Authority for Purchasing
The Deans of Faculty, Directors of Research Institutes, the Director of Graduate Studies, Heads of Schools and Directors of Support Units (Senior Designated Officers), are ultimately responsible to the Vice Chancellor for financial management in their own areas and for establishing and maintaining clear lines of responsibility for financial matters. They are advised by the Director of Finance in executing their financial duties. The Director of Finance will also supervise and determine the financial systems operating within their departments and units including the form in which accounts and financial records are kept. (Financial Regulations Section 3.5.5)
The Senior Designated Officers are responsible for purchases within their function. Purchasing authority may be delegated to named individuals or Budget Holders within the function subject to the approval of the Director of Finance.
The Director of Finance shall maintain a register of authorised signatories. Any changes to the authorities to sign must be notified to the Director of Finance immediately. Senior Designated Officers must provide the Director of Finance with specimen signatures of those staff authorised to raise orders and to certify invoices for payment. The authorised member of staff responsible for signing the order form must not be the member of staff certifying the invoice for payment. A member of staff may not authorise their own claim for reimbursement of fees or expenses.
The Senior Designated Officers and Budget Holders are not authorised to commit the University to expenditure without first reserving sufficient funds to meet the purchase cost.
Expenditure on a single purchase order in excess of £10,000 (incl VAT) shall require the prior approval of the Vice Chancellor using the EG2 procedure as set out in the Purchasing Policy. (Financial Regulations 6.2)
8.3 Petty Cash(Financial Regulations 6.3)
Where a single item costs less than £50 (incl VAT) it should be paid from a departmental petty cash imprest account. The transaction must be supported by receipts or vouchers.
The Director of Finance shall make available such petty cash imprests as are considered necessary for the disbursement of sundry expenses excluding staff travel.
Requisitions for the reimbursement of petty cash imprests must be sent to the Director of Finance, together with appropriate receipts or vouchers, before the total amount held has been expended, in order to retain a working balance pending receipt of the amount claimed.
Each member of staff issued with a petty cash imprest is responsible for its safe keeping. The balance of cash must be kept locked in a secure place, and will be subject to periodic checks by the Senior Designated Officer, or such person nominated by him or her.
Petty cash books must be used for recording all imprest accounts.
At the end of the financial year a certificate of the balances of petty cash imprests held must be completed by the member of staff responsible and countersigned by the appropriate Senior Designated Officer.
8.4 Purchase Card (Financial Regulations 6.4)
Goods and services costing less than £300 may be ordered and paid for using a University Purchasing Card where suppliers are willing to accept payment by that method. Purchasing cards may be issued by Barclays Merchant Services on the authority of the Director of Finance.
In the event of unauthorised personnel obtaining the card details the cardholder must immediately inform the Financial Controller. The card will be stopped immediately. A replacement card with a new card number will be ordered as soon as possible.
The card must only be used to purchase goods and services on behalf of the University of Salford
Any misappropriation of funds will be treated as Gross Misconduct and dealt with through the University’s disciplinary procedures
The minimum penalty for non-compliance with these procedures will be suspension of the card. Other sanctions may be imposed