1. Confirming Orders
(After-the-fact orders)

2. Definition of a Confirming Order
A purchase, letter of intent to purchase, or request for scheduling in advance of an order that is made by an individual, without having a valid purchase order number, P-Card or approved payment request form established to pay for that purchase or service.
A Confirming Order is when you ask a company or an individual to provide goods or services, without using either a valid purchase order, p-card if allowable under the p-card program, or payment request form, where a check is cut to the supplier before goods are ordered or service is rendered.
In other words, you don’t have a University approved payment method.

3. University and Procurement Policies
Use of confirming Requisitions and Purchase Orders without an approved University payment method to authorize retroactively commitments to suppliers by personnel is a violation of University policy.

4. Delegation of Procurement
The President, through the Vice President for Finance and Administration, has delegated the procurement function to the Procurement Services Director/Chief Procurement Officer. Any acquisition of a commodity or a service made before Procurement Services issues a PO may become the personal obligation of the individual obtaining the commodity or service.

5. Delegation of Procurement
The requirements stated herein apply to all purchases of commodities and contractual services regardless of the funding source.
It is the responsibility of Procurement Services to determine the price and secure the source of supply (supplier) for the purchase. Requisitioning departments shall never assume that their recommended supplier will be the supplier/contractor to whom the PO will be issued.
Requisitioning departments are urged to contact Procurement Services prior to preparing a requisition to secure information about specifications, sources of supply, terms and prices.
A supplier should never be allowed to provide a service or deliver a commodity before a PO is issued.
It is the responsibility of the Procurement Services Department to obtain quotations from prospective suppliers. However, for budget purposes, a department may obtain cost information from catalogs, prior orders or suppliers. The Procurement Services Department is not bound to accept quotations secured by departments. When a department chooses to secure quotations, the quote must contain the name of the supplier; the supplier representative who gave the quote, the date of the quote, the FOB (free on board) point, the payment terms and the price of each item(s). The Director of Procurement Services has the ability to make exceptions on a case-by-case basis only.

6. Delegation of Procurement
Even when legal authority exists via a power of attorney, all contracts and agreements require review and approval by Procurement Services prior to the signing of the contract document, a requisition must be submitted and a PO issued before any contract documents are released to the supplier. If this policy is not followed, the individual signing the contract may be personally liable for any costs incurred.

7. Audit for Fiscal Year
An audit for FSU for fiscal year by the State of Florida, Office of the Auditor General recommended:
“The University should ensure that University personnel do not enter into written contracts that exceed their authorized limits, and that contracts are reviewed first by Procurement Services, and then if necessary, Procurement Services will obtain approval by the Office of the General Counsel prior to executing written contracts, as required by University policy.”

8. Prohibited Procurement Practices
Placing orders for goods or services directly with suppliers or instructing the supplier to invoice FSU before Procurement Services has issued a PO to that supplier.
Using a personal credit card or personal funds to purchase goods or services for the department, with the expectation of being reimbursed by FSU, unless the amount is less than $25.00.

9. Prohibited Procurement Practices
Any individual who engages in a prohibited procurement practice is hereby notified that he or she is risking their personal funds only, and not the funds of FSU. This policy applies to all funds on deposit with FSU, regardless of the source. Lack of knowledge of proper procedures, or a perceived lack of time to follow them, when circumstances do not indicate that a true emergency existed, will result in the return of all payment requests, expense reimbursements or requisitions for handling by the individual making the charge, or the individual approving it after the fact within the department.

10. Applies to: Requisitions Expense Reimbursements (especially over $25)
Payment Request Forms for unencumbered payments
Requisitions that do not have a valid PO in dispatched status in OMNI and/or where goods/services have either been ordered or received.
Expense Reimbursements or Reimbursements other than Travel (while in travel status or urgent needs while out in the field).
Payment Request forms shouldn’t be used to bypass the normal purchasing procedures.

11. Expense Reimbursements
Anything over $25.00 requires a justification
Employee must be considered in Travel Status
Acceptable Reimbursements: (i.e. at a conference and you need to purchase a book but they don’t take P-Card or out in the field performing research at a more remote location and you need to purchase something for that research but supplier doesn’t take p-card and no access to the SpearMart system)

12. Expense Reimbursements
Sales Tax: The University is sales tax exempt for PO or P-Card. When making a University business purchase using personal funds and you are charged sales tax, if approved, the University reimburses you back the full cost of the purchase including the sales tax but the University never recoups sales tax.
This costs the University a lot of money over time.

13. Payment Request Forms
Goods and Services should all come through Procurement Services. There is an allowable Unencumbered Disbursements list for certain things that can be purchased using a Payment Request Form (PRF). For a complete listing, contact Accounts Payable.
Items being paid via a PRF should not be after the fact. The University would send a check to the supplier and then merchandise is shipped, not the other way around.
PRF’s can may be able to be used when a supplier doesn’t take POs or P-Card. The University should consider using other suppliers that do accept POs or P-Cards before using PRFs for ordering items. Consult with Procurement first.

14. Examples of Confirming Orders (without establishing a payment method - i.e. PO, University check, P-card)
Catering at the University Center Club
*unaware of the cost of the catered services or service charges.
Blanket orders not issued as services are required and then submitted several months later when invoices received.
Printing or design work submitted after the work was completed.
Charter buses secured 2 days prior to departure or after trip.
Clothing (i.e. uniforms, shirts, etc.) embroidered/purchased.
Computer or A/V supplies ordered and delivered with no PO.

15. Adverse Effects of Confirming Orders
Supplier assumes risk by providing goods or services.
FSU employee assumes risk by requesting goods/services without having an established payment method.
Insufficient funds
Budget closed or grant ended or grant may not allow the purchase
Overpayment for goods/services
Potential Liability
EH&S Issues
Construction/Facilities Issues
Property Tag / Asset Management Issues
The supplier is assuming the risk of not getting paid by doing the work or providing the goods and the individual that contracted with the supplier to do the work or provide the service is assuming risk because a payment method hasn’t been established and they may have to bear the cost of the order.
When items arrive, there may not be sufficient funding to pay for them if not encumbered by a PO up front.
Lack of proper approvals such as EH&S, Construction or Facilities management.

16. Adverse Effects of Confirming Orders
Lack of Administrative Approvals
By-passing State Law or Board of Governors Regulations for procurement methods
By-passing Federal Procurement Requirements
By-passing Legal Review
Taxation Issues – Conflict of Interest (Employee Employer relationship)
Interest penalties / University Credit rating
Supplier Diversity Initiative
Lack of Internal University Approvals
Risk of Audit write-up
If it continues, and University continues to support it, we would be granting inherent authority to continue the practice
Lack of Administrative Approvals: Certain University Approvals are required for certain things.
Bypassing State Law for procurement methods: State Law says anything over $50K requires a procurement method therefore it must be either competitively solicited (bid), sole sourced if it meets the requirements, exempted from bidding by getting an approved SRE, purchased on a Contract that has already been competitively procured or by Emergency Purchase.
Bypassing Legal Review: Legal Services and agreements over $10K require the review of the Office of General Counsel.
Taxation Issues: There could be tax issues when making payments to individuals
The University could pay Interest Penalties / It could affect the University Credit Rating: If the University Prompt Payment Policy is not followed then the University could have to pay interest for late payments and this could eventually affect the University’s Credit Rating.
Supplier Diversity Initiative: The University has a supplier diversity initiative that we must follow to procure goods and services and make an effort to use Certified Minority suppliers when we can.
Lack of Internal University Approvals: Certain goods/services require the approval of internal departments before the requisition can route to Procurement Services. (See next slide).

17. Bypasses Internal University Approvals
Computing Equipment (over $20,000) and software
Security Systems and Fire Alarms
Renovations
Copiers
Printing and Copying
Telephones and Telephone Equipment
Radiological Material
Uniforms or clothing for employees
Legal Services
Signs, exterior (permanent)
Controlled Substances
Fans, Heaters, air circulators, defibrillators, drones, golf carts
Hazardous Waste
Traffic control & Personal Safety Devices / Law enforcement
Contract and Grant Requisitions
Computing Equipment (over $20K) requires Information Resource Mgr. Approval.
Security or fire alarms: Telecommunications
Renovations: Campus Design
Copiers: Copier Program
Printing and Copying: Printing Services and Publications (They have first right of refusal)
Telephones and telephone equipment: Telecommunications
Radiological Material: EH&S
Uniforms or clothing for employees: HR
Legal Services: Office of General Counsel
Signs, Exterior (permanent): University Sign Committee
Controlled Substances: EH&S
Fans, Heaters, air circulators, etc.: EH&S
Hazardous Waste: EH&S
Traffic Control & Personal Safety Devices / Law Enforcement – University Police
Contract and Grant Requisitions: C&G if $1000 or more
Some things like uniforms or prescription safety glasses require a University prerequisite form to be filled out and approved by HR. Household Moves require that the Approval to Pay moving expenses be approved by your department and HR.

18. Acceptable Procurement Methods
FSU Visa Procurement Card (“the P-Card”) if allowable by the P-Card program. Newly revised policies and procedures have expanded the flexibility of the P-Card, so that its use can be more closely tailored to the needs of the department.
Submission of a requisition to Procurement Services via SpearMart.
Payment Request Form if allowable per the allowable Unencumbered Disbursements list.

19. Emergencies
If you have a bona-fide emergency and the University is closed or you’re in travel status and do not have a P-Card or supplier doesn’t accept P-Card, document the nature of the emergency and turn in your paperwork by the next business day to Procurement Services for review.
If it’s a true emergency then Procurement Services will approve the request.

20. Confirming Order Log
Confirming Orders are reported via the monthly compliance report that is ed to all DDDH’s.
We check for reoccurrences from the same department, same individual and same supplier.
Suppliers are communicated to and sometimes sent a letter putting them on notice that if it continues to happen, they may not be paid and they must obtain a University payment method (i.e. valid PO, P-card or University check) prior to providing services or goods.

21. How to Prevent Confirming Orders?
Plan Ahead
Contact Procurement Services for help or expediting orders, obtaining price quotes, bidding, or contract information.
Know or read the University Procurement policies and procedures.
Use a P-Card for allowable P-Card purchases when you can.
Enter a requisition in a timely manner to allow Procurement Services time to obtain competitive pricing, verify supplier information, obtain missing requisition information, etc.
Lack of knowledge or saying someone was new is not sufficient for approval of confirming orders.
Try to plan well enough in advance that if you need help, if something requires bidding, if it requires legal review, or internal approvals, all this can be accomplished before you actually require the goods or services.

22. How to Prevent Confirming Orders?
When watching for the PO number in SpearMart, make sure that the PO has gone through all workflow approvals before providing the PO number to the supplier. You can search by the requisition number in SpearMart and if the PO is established, the PO number will automatically show. From the PO you can look at the workflow approvals.
If no PO number is showing the requisition has not finished processing to PO and it has not finished workflow approvals.

23. How to Prevent Confirming Orders?
Remember, it takes more time to do it the wrong way than the right way. If in doubt or you’re not sure the correct way to handle something, please contact Procurement Services.

24. How to Prevent Confirming Orders?
Procurement Services Main Phone Number:
Website:
To apply for a P-Card, eligible employees must use the Cardholder Application form in SpearMart. The appropriate approvals will need to approve the form when submitted.
P-Card web page:
P-Card Program Manager:
Confirming Orders: Contact Karen Gibson or Rosey Murton at
Use the Confirming Order justification form in SpearMart for goods and services.
Use the Reimbursement Justification Form on the Accounts Payable website located within Forms (routes to AP for approval)
On-site training can be made available to discuss compliance and procedures by contacting Procurement Services at

25. QUESTIONS?