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Vanderbilt Procurement Processes

Vanderbilt Procurement Processes

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Vanderbilt Procurement Processes

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  1. Vanderbilt Procurement Processes “How to purchase the stuff you need”

  2. Introduction to Procurement Vanderbilt shops. . . What do we buy? How much do we spend annually? How do we purchase items?

  3. Overview • Procurement Mission & Roles • Procure-to-Pay Process Flow Chart • Methods of Purchasing • Steps in the Process • eProcurement and PMM • P-card • Requisitions • Details of Requisitions • Internal Controls • Special Programs • Resources

  4. I. Procurement Services Mission • Support all purchasing activities via: • Medical Supply Sourcing • Procurement Services • Execute purchasing transactions • Negotiate contracts on your behalf for • Volume discounts • Strong supplier relationships • Best products and service available • Manage supplier programs

  5. I. Procurement Services Mission In other words, we help you to… • buy what you need • get the most for your money • get the best product quality from suppliers • get the best service from suppliers • purchase items in the most timely, efficient manner possible • help Vanderbilt keep accurate records and data on spend

  6. I. Procurement Services Roles How do we do this? With Purchasing Agents and Sourcing Officers… What do they do for you? • What is a Purchasing Agent? Your buyer • information, quotes by commodity • paperwork execution – places the order • exception resolution

  7. I. Procurement Services Roles How do you work with purchasing agents? Use the website contact list of buyers Use the commodity list to find buyers Know the location of the two offices Use online reporting for answers If need assistance, call purchasing agents directly More details on this topic later!

  8. I. Procurement Services Roles How do we do this? With Purchasing Agents and Sourcing Officers… What do they do for you? • What is a Purchasing Agent? Your buyer • information, quotes by commodity • paperwork execution – places the order • exception resolution • What is a Sourcing Officer? Your strategist • Research by commodity • Strategies for commodity purchases • Negotiations by commodity

  9. I. Procurement Services Roles How do you work with Sourcing Officers? Ask if we have contracts for what you are purchasing - These are recorded in our Vandy Contracts Database System and the PMM Contract Manager. Ask if we have preferred suppliers Find this info on our website Check supplier list for active vendors before using New Vendors if possible – but let us know about those which interest you

  10. II. Procure-to-Pay Process

  11. II. Procure-to-Pay Process

  12. II. Procure-to-Pay Process

  13. II. Procure-to-Pay Process

  14. II. Procure-to-Pay Process

  15. III. Methods of Purchasing Prime methods to order products & services: • eProcurement or PMM online order process • Purchase or Procurement Credit Card (“P-Card”) or “AmEx Corp Card • Purchase Requisitions (paper form) • General purchases (“A” Req) (pg 4 of appendix) • Capital Requisition (“C” Req) (pg 8 of appendix) • Consultants (“S” Req) (pg 9 of appendix) • Small Purchase Order (“SPO”) (pg 14 of appendix) See for Preferred Purchasing Methods by commodity

  16. IV. Steps in Purchasing • Determine product/service needs • Identify or select supplier • Engage Procurement Services as needed • Follow procedure for best method for the product: • Order online with eProcurement or PMM; or • Purchase with a Pcard; or • Fill out appropriate Requisition Form

  17. eProcurement • New online requisition and ordering system • Fast, flexible and paperless • Automates the Dept. approval process • Standard process for buying supplies up to $25,000 • Select from products from 3 different sources: • VU eCATalog of high volume everyday products • “Punch Out” suppliers • Over 500+ free form suppliers • Most orders go directly to the supplier

  18. Pathways Materials Management (PMM) • Online ordering and inventory control system used for Medical / Surgical Supplies • Contract Management Module • Electronic PO transmission (EDI) and (FAX) • Automated Electronic price updates (832) • Par Level and Template Forms • Approximately 2800 active vendors Anyone requesting a PMM login should contact the Help Desk:

  19. Purchase Card (P-Card) • JP Morgan Chase Credit Card • Issued to specific users approved by Dept. • Limits set by Dept. • Used for miscellaneous purchases • Advantages: • Widely accepted by merchants • Convenient; allows for internet ordering • Reduces paperwork and need for SPOs and Demand Checks • More accurate record keeping • Insures timely payment to suppliers

  20. V. Filling out Requisition Forms The process is the same for all types of Requisitions • Specify Account & Center Numbers • Obtain required approval signatures • Indicate Supplier/product/prices and terms • Route copy to appropriate Procurement Office, keep a copy • Procurement executes purchase order with supplier

  21. Primary method used to purchase more complex goods & services Generally used for orders >$500 3-part sequentially numbered form Requirements: Dept information Valid Account and Center Numbers Authorized signatures per your Dept. procedures Specific customer information Purchase Requisition (A Req) Pg 4 of Appendix

  22. Pg 4 of Appendix

  23. Purchase Requisition (A Req) Other Requirements: • Supplier contact information If a new supplier: • Federal Tax ID Number • W-9 data • Remit to Address • Itemize products/services & prices • If no supplier provided, Procurement will select or competitively bid requirements • For one-time orders, service contracts and blanket purchase orders

  24. Purchase Requisition (A Req) And very important…. • Fill the form in well…. • Slows process if poorly written, wrong or contains omissions • We send the form back if not complete or legible • Be explicit in describing items – attach forms, etc. with a note “See attached” • Keep your copy; send in only top copy to Procurement • Send to us to order – do not order items yourself. If someone has inadvertently placed the order, please note the following on the Req: • “Confirmed and order has been placed” – if someone in the department placed the order • Be sure they did not give the Req number to the vendor as a PO number.

  25. Capital Requisitions (C Req) Pg 8 of Appendix • Only used for Capital Equipment purchases • Capital Equipment defined as: • Durable products w/ life expectancy >2 years • Purchase Price >$3000 • Rest of process same as A-Requisition

  26. Consultants (S Req) Pg 9 of Appendix • Rules of engagement are complex • Office of Contract & Grants Accounting (OCGA) sets policy • Use “20 Rule Test” to determine relationship • If spend <$5000; Demand Check • If spend >$5000; Purchase S Req

  27. Special Requirements Pg 5 & 10 of Appendix Sole Source Justification • For orders >$25,000 University Policy requires: • Competitive bidding process, or • Documentation justifying no-bid awards • Dept. Management signature • Requirements printed on reverse of General Purchase “A” Req & Capital Requisition “C” Req Forms

  28. Special Requirements Pg 5 of Appendix HIPAA Guidelines • Health Care Insurance Portability & Accountability Act (Federal Statute) • Applies to products/services that directly impact protected patient information • May require the supplier to sign VU Business Associates Agreement (BAA) • Requirements printed on reverse of new Requisition Forms (A,C,S)

  29. Forms How do I get these forms? • Purchase forms on eProcurement

  30. Small Purchase Order (SPO) Pg 14 of Appendix • Pre-approved purchase orders • (222 / 255 prefix) • For miscellaneous purchases <$500 in total value • Certain products & services excluded (list) • Disadvantages: • Paper intensive process • Some suppliers won’t accept • Can’t be used for internet ordering • eProcurement is a more efficient means to order supplies

  31. VI. Internal Controls for Purchasing • Foundation is the adequate segregation of duties. Reduces the likelihood that errors (intentional or unintentional) will go undetected: • by providing separate processing by different individuals at various stages of a transaction • by independent reviews of the work performed • No employee or group should be in a position both to perpetrate and to conceal errors or fraud in the normal course of their duties.

  32. Segregation of Duties • The principal incompatible duties to be segregated are: Authorization or approval of transactions related to those assets Recording or reporting of related Transactions Execution of the transaction or transaction activity Custody of asset • The same person generally should not process a transaction and record or report the transaction.

  33. VII. Campus Travel Management The Vanderbilt Travel Portal Faculty and Staff Travel Portal Travel Tutorial First Time Users Flights Rail and Bus Hotels Colleague Reciprocity Travel Marketplace Travel Agencies Airport Parking Car Rental Internal Resources Meeting/Event Spaces Visitor’s Travel Portal Travel Resources

  34. VIII. Procurement Resources Comprehensive information about Procurement Services is on the web page: • Procurement Services • Medical Supply Sourcing • eProcurement • P-Card Program • Policies and Procedures • Request invoice copies to work on exceptions • Request purchase order copies • Request an encumbrance removal • Travel Program • Contacts • Supplier Directory • FAQs

  35. Disbursement Services

  36. What is Disbursement Services? Responsible for review and disbursement of the University's funds in accordance with its policies and procedures • Manages the Accounts Payable function • Reconciliation of vendor statements • Distribution of checks and document imaging of purchase orders and invoices for both the University and Medical Center • Processing and payment of all invoices

  37. What is Disbursement Services? • Manages the ACH, wire transfer and 1099 tax reporting functions for the institution • Maintains the University Central demand check function • Travel advances and reimbursement • Expense reimbursement • Student refunds • Stipend payments • Payments for non-purchase order items. • Now responsible for the PCard program

  38. Statistics • 30 management and staff • Total funds disbursed annually: $1.8 billion • PCard transactions: 182,000 annually totaling $49.6 million • Exception vouchers resolved: 36,000 annually • Xbatch invoices resolved: 7,000 annuallyCustomer service calls resolved: 50 daily • 9,700 new vendors setup • 10,000 vendor records updated annually

  39. Statistics AP invoices processed 415,000 annually 38,000 monthly 1,800 daily Demand checks processed 65,000 annually 5,400 monthly 255 daily Checks distributed 133,000 annually 11,000 monthly 525 daily

  40. What is Accounts Payable? Primary responsibility: processing and payment of all invoices for purchases made against purchase orders (A-reqs, S-reqs, C-reqs, SPO, e-procurement, PMM) for both the University and Medical Center

  41. What is Accounts Payable? • Additional functions: • Collection of credit for over payments or returned goods • Vendor statement reconciliation • Process Vendor Refund Checks • Process Return Checks • Recurring Vouchers - Equipment lease payments • Paymentof Fed Ex & UPS freight charges

  42. What is Accounts Payable? • Types of invoices that Accounts Payable receives and processes • Paper Invoices • Electronic Invoices • Type of invoices that Accounts Payable does notprocess as these are not valid invoice types • Order Confirmation • Quotes from Vendor • Delivery or Packing Slips • Requisitionand/or Purchase Order copies

  43. What is Accounts Payable? • Types of payments that Accounts Payable processes • Physical Paper Checks • EFT – Electronic Payments • ACH – Electronic Bank Transfers • Wire Transfers – Foreign & Domestic

  44. How does AP invoice processing work? • Department initiates purchase by issuance of a purchase order (following procurement services procedures) to a vendor • Vendor ships goods/performs services. • Vendor sends invoice to Disbursement Services. PO number must be referenced on invoice. • Disbursement Services enters invoice against PO into Peoplesoft system.

  45. Disbursement Services verifies • PO number • Vendor name • Vendor payment terms • Invoice date • Invoice number • Invoice amount • Remit Address • Each night the Peoplesoft system runs a process to match the detail of the invoice against the detail of the PO. • If all items are <= the PO then the invoice will be set to pay, if not then an exception will occur.

  46. Matched invoices are set to pay from the invoice date based on terms negotiated for that vendor. • Vanderbilt’s standard terms are net 45 days. • Since the system only matches the invoice to the PO (two-way match) the department is responsible for verifying that the goods/services were received and acceptable. • When shipment arrives compare packing list to shipment verifying completeness

  47. Compare Departmental Invoice Report, Internal PO Copy and Packing List verifying all goods were received and billed as ordered (three-way match). • If there is a problem with the billing and/or goods department should contact Disbursement Services to have invoice put on hold until discrepancy can be resolved. • Disbursement Services cuts checks for payments against PO’s each Tuesday night. • Checks are reviewed and mailed to vendors each Wednesday.

  48. Departmental Invoice Reports (DIR) • Currently: departments receive paper Departmental Invoice Reports (DIR) for use in the three-way match process. • Now also obtainable on-line from the PDS Reports for Departmental Use available on the Procurement website. • Effective April 6, 2009 the reports will only be available on-line.

  49. How can I check my invoice (DIR)? • Click on PDS Reports for Departmental Use at the top of the page to access your reports • Halfway down the page under “How to Find the Reports” click on Business Objects InfoView XI Login • Run thePO Detail (Multiple PO’s) and the Invoice Detail (Multiple Departmental Invoice Report, DIR) for your centers and the desired time frame.

  50. ORRun ‘Invoice Summary” Report for the centers and period of time desired