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Why focus on procurement?. Donna Sandoval, CGFM. April 11, 2018. About our group at this presentation. My current position and experience with Procurement What is your position? What is your experience with Procurement?. What about Procurement?. Beginning of any financial transaction
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Why focus on procurement? Donna Sandoval, CGFM April 11, 2018
About our group at this presentation • My current position and experience with Procurement • What is your position? • What is your experience with Procurement?
What about Procurement? • Beginning of any financial transaction • Establishing an encumbrance to commit your budget to prevent overspending • First step of accuracy in financial reporting • If you get it right you can evaluate financial status and make management decisions
Best Practices Procurement Code - Arizona Procurement Code included in the Arizona Revised Statute (ARS) 41-2501 Purpose of this act is to: Simplify, clarify and modernize Continued development of procurement policies and practices Consistency Increased public confidence Ensure the fair and equitable treatment Provide increased economy Foster effective broad-based competition Provide safeguards
More about procurement code • Arizona State Procurement Office • University of Arizona • ABOR Arizona Board of Regents Procurement Code applies to Arizona’s Public Universities • Pima County Procurement Code • Tucson Procurement Code
Certified Procurement Officer (CPO) • A CPO must have the necessary experience, training and qualifications to commit funds for procurements on behalf of your governmental entity. • Do you have a CPO?
Do you have procurement policies? • Processes to ensure you comply with the Code • Purpose: • Comply with federal and state laws, rules and regulations • To ensure timely and accurate purchasing practices • Scope: Who does this apply to? • All department or university employees involved in procurement • Reviewing and Update annually to incorporate new requirements or address findings or problem areas
Example: 2016 Finding – Unrecorded Accounts Payable • A form, Internal Purchase Requisition (IPR) or Contract Request Form • Mechanism to request purchases – field offices or departments • Using the accounting system, it will record approvals and provides workflow • Provide training for staff of how to enter requisitions Corrective Action Plan
What do requesters have to submit? • Approval • by a manager or director that is knowledgeable about the good or service • Identify the funding source • Budget planning or a spending plan – How does this fit? • Quote(s)
Tracking requisitions • A packet with IPR, quote(s) and approval • Date stamp, log-in and place in the basket • Entry into the accounting system by someone other than an accounts payable staff • Do you use the accounting system?
Approval levels • Level 1 – Supervisor • Level 2 – CFO or CPO • Review and conversion to PO by purchasing staff (emails go out every morning what you have in your que for approval)
Review of encumbrances • Quarterly more often monthly at year-end (increase or decrease of encumbrance) • Beginning of FY process • Rules on encumbrances • Un-planned or special requests
Accounts Payable Functions • Matching of invoices and POs • Errors in invoice or POs? • Make corrections
Financial Reporting • If payments are correct our financial status reports will be correct • Including budget projections, expense to revenue, federal financial reports
Year-End Processes • Calculation of accruals • You could use balances on POs • Include all amounts, communicate with your program or service managers • Reconcile and review • What happens if liabilities are not included in accruals?
In Summary • Know the rules • Put policies or procedures into place • Update policies or procedures as needed • Training for staff • Address problems or obstacles • It is a work-in-process as rules change or staff changes