Accounts Payable & Purchasing

The purpose of the purchasing policy is to provide the support necessary to support the mission, goals and objectives of the University while ensuring resources are protected and maximized.  Cal Lutheran does not have a centralized purchasing and receiving operation and it is the responsibility of each department which purchases goods and services to insure that basic internal control procedures are followed as outlined in this policy statement.

SCOPE OF POLICY

This document outlines policies and procedures in general terms to allow reasonable discretion by department managers and is not intended to address every possible situation.  The policy applies regardless of funding sources and, in cases of sponsored programs or restricted discretionary funds, the terms of the grant, contract or donor’s limitations may be more restrictive than the University’s policy.  Department managers may, at their discretion, impose greater but not less control than is required by this policy.

REQUIRED APPROVALS

All purchases and expenditures of University funds must meet the ordinary business standard of reasonable and necessary with prudent consideration of the University's limited financial resources.  Department managers should not approve purchases unless adequate funds are available within the identified funding source.  Purchases of goods and services on behalf of the University must be authorized in accordance with the following current approval thresholds:

Approver Amount

Budget Managers                                                                                      

 $1,000

Dean, Associate Vice President, Associate Provost, Senior Director, Senior Project Manager, Executive Director and General Manager 

$5,000

Controller

$10,000

Vice Presidents, AVP of Facilities

$25,000

Provost, Vice President of Admin. and Finance

$150,000

President

$250,000

Administration and Finance Committee (or Chair)

$350,000

Board of Regents (or Chair)                                                                                                  

Over $350,000

Commitment to "Green"

The University is committed to developing and maintaining a purchasing system designed to support the use and purchase of environmentally responsible materials, services and products. Department managers are expected to support this policy in accordance with established guidelines and procedures contained in the University’s Carbon Footprint Policy.

Contracts

All contracts are to be signed by the Controller or the Vice President of Finance and Administration. No other parties should be acting as agents to the University. Contract documents will be maintained on file at the Business Office.

Bids

Every reasonable effort should be made to obtain the best possible quality, service and price. For larger non-routine purchases and contracts, competitive proposals should always be solicited and evaluated. Even for routine purchases, vendor prices should be checked periodically with those of reliable competitors.

Competitive bidding is generally required for purchases, leases and contracts over $25,000.00. A Purchase Requisition, detailing the goods or services to be purchased, should be provided to vendors.  At least three (3) written bids should be obtained and evaluated. Awards should be made to the vendor whose bid or offer is most advantageous to the University, considering price, quality, service and conformance to specifications.

Formal competitive bidding may not be appropriate in certain cases; for example, where the item is a highly specialized piece of equipment (or service) that is only available from one source, or due to legitimate emergency circumstances. Authorization for exceptions to omit formal competitive bidding for items over $25,000.00 should be made by the President, Provost, Vice President for Finance and Administration, or Principal Investigator (for sponsored research grants), as appropriate.  

Documentation of competitive bidding (or justification why competitive bidding was not used) must be included in all requests for approval of purchases that exceed $25,000.00, along with the related Purchase Requisition. For smaller purchases, documentation should be kept on file at the departmental level or in grant records.

Computer Equipment

All computer equipment, software and computer related supplies must be approved by the University’s ISS department to ensure appropriateness of technology and supportability and are subject to these purchasing policies. E-mail your request to the Help Desk at helpdesk@callutheran.edu. Computers purchased outside of ISS will not be reimbursed or supported by the ISS staff. Computers must be returned to the University on requested leaves of 60 days or more.

Purchase Orders

Purchase orders are issued on a fiscal year basis and should only include anticipated costs for the current fiscal year. All purchases of goods and services exceeding $1,500.00 should be initiated on a University Purchase Requisition form before the purchase is made or the service performed.

Quotes or estimates are obtained from the vendor and attached to the Purchase Requisition. The Purchase Requisition and quote, with complete account number and authorized signature, are then turned into the Business Office for processing.

Purchase Orders must be approved by the Controller or Assistant Controller in the Business Office before they are sent to the vendor. After approval, the Purchase Order and back-up are faxed (if a fax number is provided), and then mailed to the vendor.

The purchase order is a legal document and, when accepted by the vendor, constitutes a contract between the University and vendor. It should therefore contain all pertinent details of the agreement such as terms and conditions of the sale or service. Purchases made by one department on behalf of another department require a countersignature.

If a department frequently needs supplies or services from the same supplier, a Blanket Purchase Order may be used to combine anticipated individual purchases. Blanket Purchase Orders are subject to authorized approval limits and must contain a description of the goods or services that can be ordered.

Purchase orders are not required for the following purchases:

  • Purchases under $1,500.00 unless required by the vendor
  • All utility costs
  • Agency or permit fees for construction projects
  • Contractual Sodexo student food services
  • Contracted legal, accounting and specialty consulting fees (excluding construction-related consulting)
Follow-Up

When the merchandise has been received, the shipping/receiving documents are reviewed to verify that the quantities match the original documents. When the invoice is received, the invoice quantities and amounts are compared to the retained Purchase Order copy and receiving documents to ensure accurate billing. For payment processing, write "OK to Pay" on the invoice, reference the Purchase Order number and have the authorized signer sign the invoice. Forward the invoice, along with the receiving documents and pink Purchase Order copy to the Business Office. If multiple invoices are received against one Purchase Order, retain the pink Purchase Order copy until the final invoice is sent and all items have been received. Incomplete or improper submittals will be returned to the originating department.

Request for Payment (RFP)

A Request for Payment form is used to process all University payments under $1,500.00. All RFP’s require an original invoice, packing/receiving slips (if available), signature of authorized signer and complete account number (including object code). All RFP’s submitted that are incomplete or illegible will be returned to the originating department.

Requests for payment to individuals, partnerships and unincorporated businesses for professional services, contracting, honoraria, prizes and awards, etc. require the individual's social security number or business tax identification number and permanent address for tax reporting purposes. This should be reported to the Business Office using IRS Form W-9, (Form W-9 instructions). Please note that the University cannot release a check without this information. At the end of the calendar year, these individuals and businesses will receive IRS Form 1099 if total calendar year to date payments to them exceeds $600.00. 

Speaker/Honorarium/Stipend forms are used for individuals for professional services including speakers, honoraria, prizes, etc. This form should be filled out and attached to a Request for Payment form.

Special Instructions for Payments to Non-Resident Aliens

All payments for compensation made to or on behalf of our foreign (nonresident alien) visitors are subject to withholding and must be reported to the Internal Revenue Service. Visitors who are from countries with tax treaties with the U.S. must have a U.S. taxpayer ID number and complete Form 8233, (Form 8233 inst) to claim exemption from the withholding rules. The Business Office cannot issue checks to nonresident aliens until the required documentation is received and Form 8233 is mailed to the IRS. Some payments to or on behalf of foreign visitors for travel expenses can be made without a U.S. taxpayer ID number. Please consult with the Business Office for further information.

Reimbursements

A Reimbursement Form is used to process all personal reimbursements. All reimbursements require original receipts (taped to an 8 1/2 x 11 sheet), signature of authorized signer and complete account number (including object code). Any reimbursements submitted that are incomplete or illegible will be returned to the originating department.

Payment Processing

Computer checks are run twice a week on Tuesday and Thursday. Requests for Payment received by the end of the day on Friday are processed the following Thursday and those received by the end of the day on Tuesday are processed on Tuesday of the next week. If you are sending in an order form, subscription renewal, conference registration, etc, you will need to make a copy of the form, staple the file copy to the RFP, and paper-clip an additional copy to be mailed behind the RFP. Manual checks are available only in emergency situations and require the approval of the Controller or the Assistant Controller, as well as an RFP or purchase order as appropriate. Checks under $10,000.00 require a single hand signature, while checks of $10,000.00 or more require two hand signatures by authorized signers as established by resolution of the Board of Regents.

Sales and Use Taxes

Generally, purchases made on behalf of the University are subject to California State Sales and Use Taxes. For further information about Sales and Use Taxes, please contact the Controller, Tom Marsh at tmarsh@clunet.edu or the Assistant Controller.

 
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