| Effective Date: 8/1/95 (revised 2/1/97) |
| Office of Origin: Budget and Finance--Accounting |
The signatures of UC employees with established signature authorizations on file in Accounting (Form U 242, Signature Authorization or Cancellation) must appear on the documents listed under III.B, below, before Accounts Payable may issue payments.
B. Required Documentation
1. Disbursements requiring purchase orders
| Type of Disbursement | Supporting Documents |
|---|---|
| Architect fees | Facilities Management contract and invoice |
| Artist: sign painter, poster maker, illustrator, window decorator, etc. | Purchase order requisition, purchase order, and invoice |
| Catering -- on UC property, utilizing gas or electric appliances | Purchase order requisition, purchase order, invoice, and check request for entertainment/meeting expenses |
| Catering -- on UC property without appliances (delivery only) or off UC property | Invoice and check request for entertainment/meeting expenses (P.O. not required) |
| Consultants (independent) | Consulting agreement contract, invoice, and check request |
| Equipment | Purchase order requisition, purchase order, and invoice |
| Lease or rental of equipment | Purchase order requisition, purchase order, and invoice |
| Leases of building/land | Approved lease document and check request |
| Manuscript work | Purchase order requisition, purchase order, and invoice |
| Performers, musicians, etc. | Performance agreement and check request for entertainment/meeting expenses |
| Repair of UC equipment | Purchase order requisition and purchase order (or equipment repair order), and invoice |
| Services -- other | Purchase order requisition and purchase order and invoice |
| Subscriptions | Library blanket P.O., publisher's order form, and check request |
| Supplies | Purchase order requisition and purchase order and invoice |
| Temporary clerical services | Personnel department release number, purchase order and invoice |
2. Direct charges (no P.O. required)
| Type of Disbursement | Supporting Documents |
|---|---|
| Entertainment | Receipts/invoices and check request for entertainment/meeting expenses (Form U5/G-2) |
| Fellowship | Appointment form and check request (prepared in Accounting) |
| Freight, delivery | Vendor invoice with P.O. reference (if applicable) |
| Honorarium | Check request |
| Insurance | Policy/premium notice/invoice and check request |
| Loan | Financial aid award notification and promissory note |
| Membership fees | Invoice and check request |
| Refunds of fees and other payments to UC | Proof of original payment (e.g., cashier's receipt, cancelled check, or statement of account) and check request |
| Reimbursement of petty cash | Invoices, receipts, and check request |
| Scholarship | Financial aid award notification and check request (prepared in Accounting) |
| Telegraph (Western Union) | Invoice |
| Telephone:
Billed to UC;
Billed to other than UC | Invoice
Invoice and check request |
| Testing laboratory fees | Invoice |
| Travel advance | Travel advance request (with a detailed explanation of why an advance is required) |
| Travel expense | Travel expense voucher and receipts for expenditures |
| Water, gas, electricity | Invoice |
C. Purchasing
1. Issue of purchase order
Purchase authorizations are issued by Materiel Management--Purchasing as purchase order documents when a purchase requisition is submitted by a department. Materiel Management--Purchasing may delegate purchasing authority to departmental personnel for the following order types:
a. low value
b. agreement vendor
c. equipment repair
d. library materials (Librarian delegation)
2. Instructions to vendors
Purchase orders, whether forwarded by Materiel Management--Purchasing to vendors or placed directly by departments, should contain instructions to vendors to prepare and mail invoices in duplicate, referencing the purchase order number to:
For campus departments:
University of California San Francisco
Accounting Office, UCSF Box 0812
San Francisco, California 94143-0812
For hospital departments:
University of California San Francisco
Hospital Disbursements, UCSF Box 0816
San Francisco, California 94143-0816
Note: This "bill to" address must be clearly differentiated from the "ship to" address. Detailed instructions for placing orders with vendors are provided in the UCSF Purchasing Guide.
D. Invoice Processing
1. Verification of invoices
a. Against purchase authorization
Accounts Payable will determine whether a vendor invoice is covered by a purchasing authorization or is in accordance with direct charge policies as specified above and in University of California Accounting Manual, Disbursements: Approvals Required (D-371-16).
b. Against receipt certification
Accounts Payable, except for those invoices processed under the "Special Method" described below, will obtain proof of receipt of goods or services prior to releasing invoice payment. Proof of receipt may be in the form of an approved copy of the invoice or other document confirming receipt. Subsection 2 below provides details on the proof of receipt certification.
c. For amounts $2,500 and over, Accounts Payable will:
1) verify arithmetical accuracy (extensions, discounts, taxes, footings, etc.);
2) verify invoice prices, quantities, F.O.B. points, freight terms, discounts, applicable taxes, and other significant terms of the purchase orders or other procurement authorizations. When Accounts Payable cannot perform any of these functions (e.g., some supply agreements specify prices in vendor catalogs which are not available to Accounts Payable), the Accounting officer will arrange to have appropriate organizational units perform the function(s).
d. For amounts under $2,500
Accounts Payable may process for payment any invoices under $2,500 without performing the audit steps described above. However, the billpayers will scan these invoices for possible errors.
e. Sales tax
Accounts Payable billpayers will either pay or accrue the appropriate sales tax amount based on information from the purchase order and invoice. Questions regarding the applicability of sales/use tax law to the University may be directed to the sales tax resource person in General Accounting.
2. Methods for certification of invoices for payment
a. Standard approval method
The vendor mails the invoice to Accounting. The billpayer processes the invoice, attaches a coding skirt or label, and forwards the invoice to the department. The department reviews the invoice and either signs and returns the approved invoice to Accounts Payable to be paid, or notifies the billpayer that the invoice is incorrect and should not be paid.
b. Special method
This method allows invoices for amounts less than the "special method" limit to be processed and paid by Accounts Payable without departmental signature approval. Accounts Payable receives and processes invoices in the same manner as the standard method, but the billpayer retains the original and sends a coded copy of the invoice to the department. The invoice will be paid by the due date or within a specified period unless the billpayer is notified by the department that the invoice is in error.
c. Direct departmental approval method
Approval from the Accounts Payable Manager is required to use this method whereby the invoice is mailed directly to the department by the vendor.
3. Internal control
a. Accounting Office: Check releasing procedures
Accounts Payable will ensure that payments released to vendors agree with supporting invoices with respect to amounts and vendors names. Where possible, the person(s) responsible for this review will not be assigned other invoice processing responsibilities.
b. Department: Ledger verification
Departments are expected to review the validity of payments for goods and services charged to their accounts. To assure that charges are reviewed, departments will establish necessary internal control procedures. One of several possible methods of assuring that reviews are documented is to require a responsible staff member be assigned the review function, to sign the monthly expenditure report, and to indicate the date of review. The individual reviewing the ledger should not be assigned any responsibilities for requisitioning, ordering, or certifying receipt of goods and services.
E. Timing of Payment
1. General
The University has a continuing responsibility to settle its obligations, whenever possible, within agreed terms. This is necessary in order to maintain satisfactory vendor relations and take advantage of available cash discounts.
Departments are responsible for approving invoices immediately after goods or services have been received and for advising Accounts Payable and/or Materiel Management--Purchasing if the payment is not in order.
2. Invoices of $5,000 and over
Payment of non-discountable invoices in the amount of $5,000 and over should be delayed until the expiration of the payment term.
1. Unit price discrepancies
Accounts Payable will pay the lower of the amount charged by the vendor or the purchase order amount. Vendors will be advised of the reason for paying less than the amount billed.
2. Quantity discrepancies
Quantity discrepancies between purchase orders and invoices will be referred to the requesting department when:
a. the difference in cost resulting from the quantity discrepancy exceeds the purchase order amount by $50.00 or 10%, whichever is less; or
b. the discrepancy in quantity for an individual item is 10% or more.
If the department confirms receipt of a quantity more than ordered and decides to keep it, Materiel Management--Purchasing should be notified. If the discrepancy is approved, Materiel Management--Purchasing, at its discretion, will respond either with an appropriate purchase order change document or a signed approval to pay the invoice.
Where variations in quantities are less than 10% for an individual item and where variations result in an additional cost difference which is $50.00 or less, prior approval by Materiel Management--Purchasing to pay the invoice is unnecessary.
3. F.O.B. point discrepancies
All F.O.B. point discrepancies between purchase orders and invoices will be referred to Materiel Management--Purchasing. Materiel Management--Purchasing will advise Accounts Payable whether the F.O.B. point as shown on the purchase order is correct or not. If incorrect, Materiel Management, at its discretion, will respond either with an appropriate purchase order change document or a signed approval to pay the invoice.
4. Other discrepancies
"Other" discrepancies between purchase orders and invoices will be referred to Materiel Management--Purchasing. These discrepancies include such items as compliance with shipping terms, shipping charges, special handling charges, UPS charges, etc., which are specified in the purchase order. Materiel Management--Purchasing will advise Accounts Payable whether the particular item is approved or rejected. If the item is approved, Materiel Management--Purchasing, at its discretion, will respond with an appropriate purchase order change document or a signed approval to pay the invoice.
G. Check Requests - Form 5
1. General
A check request (Form 5) must be used to request issuance of a check for payment of invoices not directly billed to UCSF and for other payments such as, but not limited to, the following:
a. membership dues
b. consultants
c. entertainment - (Use Form U5/G-2); see Administrative Policy 300-25, Entertainment and Meeting Expense
d. fee refunds
e. honorarium
f. insurance premiums
g. recruitment
h. reimbursements to employees (other than travel)
i. removal expenses
j. rental of space
k. research subjects
2. Purchase authorization
Most payments require prior authorization in the form of a purchase order or other contractual agreement.
3. Approval signatures
An individual cannot approve his or her own reimbursement or a payment to the person to whom he or she directly or indirectly reports. Improved internal control is provided when the preparer and approver are not the same person.
4. Supporting documents
Check requests must be submitted with original backup documentation that clearly establishes the amount, as well as the obligation of the University, to make payment. Documentation that is to be sent with the check must be submitted in duplicate.
5. Payments to employees for services
Payments to employees for services rendered to the University must be requested through payroll. Payment cannot be made from a Form 5 check request.
EXCEPTION: Payment to an employee for service as a research subject. In this instance, the check request must include a certification that "this service was not performed on University time."
6. Payments reportable for tax purposes
The payee’s Taxpayer Identification Number [Social Security number (xxx-xx-xxx) or Employer Identification Number (xx-xxxxxxx)] and the home or business address must be included on the check request whenever the payment is reportable for income tax purposes. Recipients of reportable payments may be sole proprietorships, partnerships, or professional corporations, as well as individuals.
Generally, payments for services (including parts and materials) are reportable with the exception of payments to corporations. Types of reportable payments include, but are not limited to, the following.
a. architect fees
b. catering fees
c. consultant fees
d. honoraria
e. medical and health care fees (even if paid to a medical corporation)
f. prizes and awards
g. rents
h. research subject payments
7. Payments to non-resident aliens
Certification of citizenship status and visa status must accompany the request if the recipient is an alien.
H. Check Preparation and Issuance
1. Schedule for check writing
Computer checks are prepared twice weekly for distribution on Wednesdays and Fridays.
Accounts Payable may hand-write checks at other times to meet emergency needs. Because of the extra work involved, rush checks may not be written without adequate justification. Valid emergency check requests received by 3:30 p.m. will be ready by the following workday at 11:00 a.m. in Accounting or by 2:30 p.m. at the Satellite Accounting Office (MU G-1), if so directed.
2. Check distribution
Checks are normally delivered to the payee through the U.S. mail. Checks may also be delivered via campus mail or they can be held in Accounting or the Accounting Satellite Office for pick up. Persons picking up checks will be required to sign for the receipt of the check and must present picture identification. Checks not picked up in 10 days will be subject to cancellation.
A. Department Responsibility
1. Proper approval signature
The department will ensure that receipt of goods and services is certified by a person whose signature authorization is on file in Accounting.
2. Receiving procedures
Before forwarding required certification of receipt to Accounting, the department (or the receiving department) will determine that goods and services have been received in acceptable condition, quantity ordered, and in accordance with procurement specifications.
3. Invoice review
In situations where a department has been delegated authority to issue purchase orders (e.g., low-value purchase authorization, University supply agreements) the department will verify invoice prices against such purchase orders.
In addition, a department may be delegated authority and responsibility to resolve invoice quantity and condition discrepancies at the departmental level before forwarding the invoices to Accounting for payment. In such circumstances, the department may work either through Materiel Management--Purchasing or directly with the vendor, provided they have been granted authority to do so by Materiel Management--Purchasing.
4. Timely submission of certification
Where certification of receipt is to be submitted to Accounting, such certification will be forwarded promptly to prevent loss of discounts and to maintain satisfactory relations with the vendor.
B. Accounting Office
Accounting will ensure that the policies set forth in this section are followed.