KEELE UNIVERSITY
FINANCIAL PROCEDURES
INDEX AND CONTENTS
Page
1.
PROCUREMENT
PROCEDURES 2
1.1
Financial
Regulations
2
1.2
Procurement
Section
2
1.3
Budget
Holder
Responsibilities
3
1.4
Authority
to
Purchase
4
1.5
Approved
Suppliers
5
1.6
Requirement to Tender and Obtain Quotations
5 – 7
1.7
Purchase
Ordering
7
–
9
1.8
Instructions for Raising Purchase Orders
9 – 10
1.9
Confirmation
Orders
10
1.10
Business
Credit
Card
Order
10
1.11
Procurement
Card
10
-
11
1.12
Foreign
Currency
Orders
11
1.13
Delivery
and
Inspection
11
1.14
Stores
Procedures
12
1.15
Sustainability
12
1.16
Code
of
Ethics
12
–
13
Procurement Procedures – July 2008
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TO REPLACE SECTION 3.5 TO 3.6 OF THE EXISTING FINANCIAL MANAGEMENT
AND CONTROL DOCUMENT – HIGHLIGHTED TEXT IS NEW.
1 PROCUREMENT
PROCEDURES
1.1 Financial
Regulations
1.1.1 The University Financial Regulations must be adhered to at all times. See Section 8.3,
Procurement, within the Financial Regulations which can be found on the Finance
Department’s Home page.
1.1.2 These procedures expand upon the Financial Regulations and apply to all areas of the
University excluding Catering and Residences. The latter are responsible for preparing
their own procedures which are required to be approved by the Director of Finance and
IT.
1.2 Procurement
Section
1.2.1 The Procurement Section of the Directorate of Finance and IT, (Procurement Section) is
responsible
for:
(a)
Ensuring that the supply of all goods, supplies and services to the University are
of the optimum quality and quantity at the lowest delivered price at the time they
are required regardless of the source of funds.
(b)
The development of a formal procurement strategy which aims to benefit all cost
centres in the procurement of all commodities, goods and services.
(c)
Developing a value for money awareness at all levels of procurement activity.
(d)
Providing procurement expertise to ensure that Budget Holders and delegated
members of staff have the information and skills to purchase effectively.
(e)
Providing advice and information on University approved suppliers, contracts, the
facilities available from the North Western Universities Purchasing Consortium
(NWUPC) and other public sector arrangements to which the University has
access.
Procurement Procedures – July 2008
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(f)
Developing a network of Lead Buyers within the University. The Lead Buyers
have been nominated for their specialist knowledge in their own areas of
expertise, some of whom will be required to attend the NWUPC commodity
group meetings which are held three times a year at various member institutions.
1.2.2 Wherever possible purchasers should liaise with the Procurement Section and other
University users to achieve standardisation of those products which will produce benefits
in negotiating the most competitive terms, achieve value for money and simplify
arrangements for repairs and services. Fragmentation of ordering amongst a wide range
of suppliers for similar goods and services reduces the scope for competitive negotiations
and improving product quality as well as increasing costs.
1.3
Budget Holder Responsibilities
1.3.1 Budget Holders are responsible for:
(a)
Ensuring that the University Procurement Procedures are being properly
implemented
(b)
Ensuring that sufficient budget exists for all orders raised
(c)
Ensuring that University official orders are always used for the obtaining of goods
and services and proper custody is maintained over unused order forms
(d)
Obtaining value for money from all purchases
(e)
Ordering goods and services which are necessary and suitable to meet the
objectives contained within the University’s budgets and plans
(f)
Ensuring that all purchases are to be made at the most advantageous costs
consistent with desired quality. To achieve this arrangement fair competition shall
be used and encouraged at all times.
(g)
Ensuring that the goods and services have been satisfactorily delivered as per the
terms of the contract, before any payment is made
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(h)
Ensuring that all invoices are properly checked and are in accordance with orders
and any relevant contracts before authorisation for payment is made
(i)
Ensuring that regular checks are made on monthly reports, received from the Link
Management Accountants in the Directorate of Finance and IT, against Faculty
and Directorate records and ensuring that the purchase ordering system reflects an
accurate position of commitments by the end of each financial year.
1.4
Authority to Purchase
1.4.1 Authority to raise purchase orders is the responsibility of the Budget Holder, this
authority may be delegated to a named member of staff. Delegation is to be given
formally including any limitations e.g. values or cost centres, that the Budget Holder may
wish to apply. The Procurement Manager must be notified of all changes to delegated
persons and limitations by completing an Authorisation Signature Sheet (AS1) within
two weeks of any change.
A copy of the form is available on the Payments and Insurance
Office Website.
1.4.2 All purchase orders for the supply of goods and services below the value of £7,500
including VAT shall be approved by the Budget Holder or other such person designated
to act on his/her behalf, or in the case of sponsored grants and contracts the designated
holder. All purchase orders, above a value of £7,500 including VAT will be approved by
the Procurement Manager to ensure best practice principles have been applied but not as
confirmation that sufficient budget is available, this is the responsibility of the Budget
Holder. The limit of £7,500 including VAT will be reviewed from time to time.
1.4.3 For orders above £7,500 including VAT, Faculties and Directorates must not indicate
acceptance of a quotation or bid to a supplier until authorisation has been given by the
Procurement Manager. Any exception to this rule must be agreed in advance by the
Director of Finance and IT.
1.4.4 Where an existing contract exists with a value above £7,500 including VAT, Faculties,
and Directorates must not arrange an automatic continuation of that contract beyond the
original termination date without first consulting the Procurement Manager.
1.4.5 All purchase orders between £30,000 (£50,000 in the case of Estates) and £100,000
including VAT require additional approval from the relevant Link Management
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Accountant in the Finance and IT Directorate to confirm that the required budget is
available.
1.4.6 All orders etc. greater than £100,000 including VAT require additional approval from the
Director of Finance and IT, see section 1.8.4.
1.4.7 All purchase contracts and leases must be approved by the Director of Finance and IT.
1.5 Approved
Suppliers
1.5.1 All purchases made by the University must be from suppliers or sub-contractors who
are approved by the Procurement Section. Key suppliers can be found on the buyer’s
guide on the Procurement Web Site.
1.5.2 Orders
should
not be placed with new suppliers until approval has been given by the
Procurement Section. The Procurement Section must be informed of potential new
suppliers at an early stage to enable supplier appraisal to take place if necessary.
Guidelines and a New Supplier/Company form are available on the Procurement website.
1.5.3 Where advantageous terms have been negotiated on behalf of the University by the
NWUPC or by any other public sector body, these contracts should be utilised, except
where it can be clearly shown that alternative arrangements are more beneficial.
1.6 Requirement to Tender and Obtain Quotations
1.6.1
Where the supply of goods and services arises from a contract agreement organised by
the Procurement Section, NWUPC or any other public sector body, there is no need to
obtain further quotations except where further market testing is considered desirable. If
better prices have been obtained from another source the Procurement Section should be
informed prior to purchase to establish whether or not best value is being achieved.
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1.6.2 Competitive tendering shall be employed wherever possible and always where the value
of the order exceeds £30,000 including VAT (£50,000 in the case of Estates), regardless
of the source of funds. However, if an existing University, NWUPC or public sector, for
example, the Office of Government Commerce Buying Solutions (OGC) or Local
Government, procurement arrangement can be used, which itself has been awarded by
competitive methods, then that arrangement can be employed without further action.
Tender/Quotation exemption forms may be issued in exceptional cases and must be
authorised by the originating Budget Holder and the Procurement Manager prior to the
order being raised.
Forms are available on the Procurement website.
1.6.3 All tenders for the supply of goods and services where the resultant contract value is
expected to exceed the current EU threshold must by law be tendered throughout the EU
in the European journal, allowing at least 3 months for this process to be completed. The
EU threshold for goods and services during 2008 is £139,893 including VAT. This figure
is reviewed every 2 years.
1.6.4 It is the responsibility of the Budget Holder to ensure that members of staff comply
with the EU Regulations by notifying the Procurement Manager well in advance of any
proposed purchases that would exceed the EU threshold.
1.6.5 The following thresholds apply for the supply of goods and services, which do not form
part of any arrangements covered by Section 1.5 above.
Value of order/contract
Action
Including VAT
Between £7,500 and £30,000
A minimum of 3 quotations are required,
(£50,000 Estates)
wherever possible, from approved suppliers
Between £30,000 (£50,000 Estates)
Undertake a sealed bid tendering exercise
and EU threshold
which is open to approved and new
suppliers
Over EU Threshold
Undertake an EU tendering exercise in
conjunction
with
the
Procurement
Section
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1.6.6
Detailed guidelines on tendering procedures can be found on the Procurement Website.
1.6.7 Evaluation of offers must take into account Whole Life Costing Procedures.
Details of
these procedures can be obtained from the Procurement Section.
1.6.8 Quotations/tenders must be kept for the duration of the contract plus one year and the
action taken (with reasons) must be documented. Where capital/equipment has been
funded by a specific grant, e.g. HEFCE, this must be kept until the completion of any
audit certificate requirement.
1.7 Purchase
Ordering
1.7.1 All purchases made on behalf of the University shall have due regard to best practice and
the achievement of value for money. Where applicable, purchases should be made in
accordance with the recommendations of the Procurement Section, NWUPC or any other
public sector arrangements.
1.7.2 The University’s standard Conditions of Purchase are documented or referred to on the
front or back of the University purchase order. Any variations to these Conditions should
be referred to the Procurement Manager prior to any agreements being made.
1.7.3 The Procurement Section, NWUPC and public sector bodies have negotiated
favourable terms and conditions covering a number of contracts for a wide range of
goods and services required by the University, details of which are circulated, as
appropriate, to end users by the Procurement Section.
A Buyers Guide is also
available on the Procurement Web page.
1.7.4 Faculties and Directorates routinely placing purchase orders should designate persons to
be responsible in co-operation with the Procurement Manager for the sourcing and
negotiation with suppliers. Good business practice should be adopted.
1.7.5 Where appropriate, technical expertise should be sought to ensure that a specification
meets the end users needs. It is essential that Estates be consulted regarding the proposed
purchase and installation of any major item of equipment prior to any order being placed.
This requirement relates particularly to potential issues associated with structural and
services matters, the physical installation of equipment and power supply.
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1.7.6 The professional advice and expertise of the Procurement Section should be sought
where appropriate and for all purchases over £30,000 including VAT at an early stage
when purchases are being considered.
1.7.7 Official purchase orders and internal requisitions shall contain a full, clear description
and specification of the requirements, quantity required, and quotation or agreed price
relating thereto along with clear delivery instructions including building name, room,
floor numbers and contact details.
1.7.8
There must always be a segregation of duties between raising orders and
certification of invoices, i.e. the same individual cannot authorise both a purchase
order and the relating invoice. This is an Audit requirement. Spot checks will be
regularly undertaken by the Procurement Section to ensure that appropriate
segregation of duties has been maintained.
1.7.9 The reduction of a potential single order of value £7,500 including VAT or above to
several orders of smaller amounts (but with a similar combined total) in order to avoid
correct authorisation will not be accepted
.
1.7.10 Blanket/Call Off orders can be used where a supplier is providing a regular
service/supply of goods to the University and should be raised each new financial year.
Any outstanding commitment must be closed down by marking the purchase order as
complete at the end of the financial year.
1.7.11 Goods and services should not be purchased via the Internet by Faculties and
Directorates. However, the University Business Card Facility, which is operated by the
Procurement Section, can be used if necessary, except for travel arrangements.
See the Procurement Website for further information. The University is also trialling the use, by
Faculties/Directorates, of a Procurement Card facility which may be rolled out to cover
this type of purchase at a later date.
See the Procurement Web Page for further
information.
1.7.12 No leasing, hire purchase or similar arrangements shall be entered into without
the prior approval of the Director of Finance and IT. The Procurement Section
should be contacted in the first instance.
1.7.13 When considering the lease of a photocopier the Procurement Section must be notified
immediately to ensure the correct specification and contract is issued to meet
requirements.
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1.7.14
Detailed work instructions on the various methods to obtain goods and services can be
found on the Procurement Website.
1.8
Instructions for Raising Purchase Orders
1.8.1 All purchasing requirements should be communicated to the relevant nominated
representative within the Faculty or Directorate who is responsible for the issuing of
purchase orders, prior to any commitment being communicated to the supplier by the end
user. The Budget Holder may not accept responsibility for the payment of invoices
received if the correct procedures have not been followed.
1.8.2 Once approval to purchase has been agreed by the Budget Holder a purchase order is
raised using the electronic purchase ordering system. Exceptionally manual order pads
may be used but only with the prior agreement of the Procurement Manager.
1.8.3 All orders less than £7,500 including VAT can be printed and issued to the supplier
without the additional approval of the Procurement Manager.
1.8.4 All orders over £7,500 including VAT require the authorisation of the Procurement
Manager in addition to the Budget Holder or delegated signatory, prior to issue as
follows:
Threshold
Approved
by:
Including VAT
Orders over £7,500
Procurement Manager
Orders between £30,000-£100,000 Procurement Manager with additional written
(£50,000 Estates)
confirmation from Link Management Accountant re
budget
Orders over £100,000
Procurement Manager, Link Management
Accountant and the Director of Finance and IT
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1.8.5 The Procurement Manager should be contacted to instigate the above approval process,
the order should not be communicated to the supplier until this approval process is
complete.
1.8.6 The Procurement Section will give approval electronically for those Faculties or
Directorates using the electronic ordering system, if the manual order system is used, the
Procurement Section is required to sign the purchase order before it is issued.
1.9 Confirmation
Orders
1.9.1 In exceptional circumstances urgent orders may be given verbally, for example,
emergency call-outs or requirements out of hours but must be confirmed by an official
purchase order endorsed ‘confirmation order only’ not later than the following working
day.
1.10
Business Credit Card Order
1.9.1 The Business Credit Card is a cost effective method of ordering goods and services for
low value and one off purchases. The card is managed by the Procurement Section who
place the orders on behalf of Faculties and Directorates.
1.9.2 The Business Credit Card should only be used where the value is less than £1000.00
including VAT but greater than £50.00 including VAT and where a current University
supplier cannot provide the goods or services and where it is not intended to trade with
the
supplier
again.
See the Procurement Website for further guidance.
1.11 Procurement
Card
1.11.1 The University operates a Visa Procurement Card facility which is an alternative method
of ordering and payment of goods/services that are of relatively low value and not in
regular repeat demands but, nevertheless, create a high volume of transaction
requirements.
1.11.2 By using the Procurement Card added value will be achieved by speeding up the
acquisition process without diluting management and budgetary control and should
reduce invoice processing and creditor activity.
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1.11.3 The Procurement Manager in conjunction with the Budget Holder determines the control
of limits for the:
(a)
Monetary value per month
(b)
Monetary Value per transaction
(c)
Authorised
commodities
1.11.4 Use of the Procurement Card for personal purchases is strictly prohibited. The
Procurement Card can only be used by the person stated on the card. Abuse of the
Procurement Card will be regarded as a disciplinary offence.
See the Procurement
Website for further guidance.
1.12
Foreign Currency Orders
1.12.1 Orders must be raised where the payment is required in a foreign currency or payment is
to be made in sterling but to an overseas bank account. The equivalent sterling value will
be charged to the cost centre and will include all relating exchange and transaction costs.
A minimum of seven days is required to enable such arrangements to be made.
1.12.2 The Finance Department will use the most economical way of making payment in foreign
currency, which may or may not be via the University’s bankers.
1.12.3
See the Procurement Website for further guidance.
1.13 Delivery
and
Inspection
1.13.1 All goods and services should be delivered to the location specified on the purchase order
and should be signed for as “unexamined, not accepted”. This will ensure that you have
sufficient time to inspect the goods for any discrepancies or damage. Any discrepancies
or damage must be reported to the supplier in writing within 36 hours of the receipt of
goods.
1.13.2 All stocks held at or near the point of use are to be identified and regularly examined with
a view to maximising their use. Shelf life, stock level, and rate of consumption should be
reviewed to reduce wastage and stockholding.
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1.14 Stores
Procedures
1.14.1 These are to be operated for the regulation of stock movements and levels and the
provision of adequate management information numerically and financially in
accordance with any procedural notes which may be issued by the Finance and IT
Directorate.
1.14.2 Stores should only hold stock in compliance with the following criteria:-
(a)
Essential
Goods
Only those items whose immediate availability is considered essential to maintain
a University service.
(b)
Bulk Purchased Supplies
To be purchased and held in bulk supplies where items are of relatively low value
and in common use. The costs of holding these items in store should not be
higher than the costs involved in ordering small quantities, taking into account
any discounts that can be obtained in bulk purchasing.
Appropriate diligence should be paid to ensure that bulk purchasing does not lead
to old and/or redundant items being held due to lack of usage.
1.15 Sustainability
1.15.1 The University will endeavour to ensure that all materials and services purchased shall
be done so with a minimal negative effect on the environment.
1.15.2 Subject to European directives, products should wherever possible be purchased
within the North West and Midlands areas of England.
1.16 Code of Ethics
1.16.1 The University promotes the Chartered Institutes of Purchasing and Supply code of
ethics which is to be observed by all staff and representatives engaged in University
procurement
activities.
See the Procurement Website for further guidance.
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1.16.2 University staff and representatives engaged in University procurement activities shall
always seek to uphold and enhance the standing of the Purchasing and Supply profession
and will always act professionally and selflessly.
1.16.3 Any personal interest which may impinge or might reasonably be deemed by others to
impinge upon impartiality in any matter relevant to Procurement duties should be
declared to the Head of Human Resources and discussed with Dean of Faculty, School,
Research Institute or Directorate, before conducting the business, using the
Disclosure of
Interest Form. See separate Conflicts of Interest Policy.
1.16.4 The confidentiality of information received in the course of duty should be respected and
specific details of suppliers offers must not be divulged to competitors. Information given
in the course of duty shall be true and fair and never designed to mislead and should
never be used for personal gain.
1.16.5 While bearing in mind the advantages to the University of maintaining a continuing
relationship with a supplier, any arrangement which might in the long term, prevent the
effective operation of fair competition should be avoided.
1.16.6 Gifts, other than items of very small intrinsic value such as business diaries or calendars,
must not be accepted from suppliers or potential suppliers.
1.16.7 Modest hospitality is an accepted courtesy of a business relationship. However, the
recipients should not allow a position to be reached whereby they might be or 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 such hospitality
should not be significantly greater than the University would be likely to provide in
return. A record of all such hospitality should be retained by the Budget Holder or
delegated officer.
1.16.8 University funds, whatever their source, should not be used for the provision of gifts,
entertainment or hospitality for staff, for example, staff Christmas/leaving parties.
1.16.9 Personal inducements in any form from suppliers of goods and services are forbidden.
Any instances of such inducements being offered must be advised to the Procurement
Manager
immediately.
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