Mind map

Purchase to pay part 1

cathal O Toole English

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comply with government and EU procurement
- Process open and competitive
  - Demonstrate accountibility + probity + high ethical standards
    - acquie goods and services use life cycle costing
      - make use of purchasing power = enter into contracts
        Obtain approval from budget holders
        dont over spend on budget
        record and edvidencing of receiving of goods/services
process
- 3. Identification + Notification of need
  - identify and communicate need of goods + services
    - be in a position to demonstrate need
      - take account of policy and constraints
        person approving be aware of costs
        + review of existing goods and services
        professional procurement be involved €25000
        for guidance
        when communicating need employee must
        in writing
        A. date of request
        B. spec of goods and services required
        C. name source of request
        D. identify purpose
        E. cost centre
        F. material code
        G. delivery address
        H. time scale required
        I. cost, quantity duration if known
        REQUEST PUT ON A
        PRE-FORMATTED
        SEQUENTIALLY NUMBERED
        on a REQUISITION FORM
        request are recorded for future records and auditing
- 1. segragation of duties
  - between ID of need and issue of PO or contract
    - one other staff member should be involved
      - evidence of signiture on REQ OR PO
        No manager or staff should have final decision when used for own day to day use
        there must be a clear separation of tasks between raising PO and recording the reciept
        professional procurement input over €25000
        when uthorising expenditure over€25000 must be in writing and recorded
        least grade V manger or above + must be different person signing off
        one person must be equal for expenditure authority
        €25000 must not have final decision as regarding selection of final tender and or approval
        procurement must be notified and or coordinate all tender above EU treshold EXCEPT CAPITAL PROJECTS
        Estate office are reponsible for capital projects
        Budget holder/ purchase approvers
  - 2. PROCUREMENT PLANNING
    - Analyse and review purchasing requirement for next 3 years
      - put in place a procurement plan
        categorize and rationalize suppliers
        renew contract or terminate
        additional contract to be put in place
        plan updated annually + replace every three years
        identify use of tendering when planning
        based on value thresholds
- 4. confirmation of availability of funds and approval to spend
  - Budget holder must document purchasing arrangements
    - to ensure clarity
      - who approved spending
        Regulatory issues resolved be contract formed
        licensing issues
        tax clearance
        Tax statues
        Statutory permission or requirements
        recorded by means of signed PO or (FIS) financial information system
        or other means
5. Sourcing supplies or goods/ services
- Budget holder must
  - Monitor purchasing activities
    - ID opportunities to centralize contracting
      - Document the sourcing procedures
        Procedures must comply with National Financial Regulations
        Check stock and storage
        avoid ordering excessive quantities
        ensure contract is valid
        if goods or services cannot be sourced suppliers can be contacted directly
        manager must be in a position to source a supplier
        all values should be applied excluding VAT
        unless otherwise stated
        Threshold apply in goods services and works
        Splitting of purchases are prohibited
        this is a serious breach of Financial Regulations
6. Authorization to seek quotes and tenders
- Budget holder must seeks authorization before seeking quotes or tenders
  - must be covered in formal document
    - example Grade 4 or higher €25000
      - issue of tender forms
        records must be kept for each tender detailing when received, when responded to and documentation issue
        Evaluation of Tenders and quotes
        (MEAT) most economically advantageous Tender
        Or LOWEST PRICE ACCEPTED
        FOR FUTURE AUDITING
- Manager Responsibility
  - Expenditure meet the need
    - Proper procurement has taken place
      - Expenditure within budget
        in compliance with financial regulation
        in order to request suppler
  - Request to suppliers Mandatory requirements
    - in writing form
      - System purchase orders
        Manual purchase orders
        Contracts
    - PO must be sent to supplier
      - in written form
        step 1 budget holder approved expenditure
        Step 2 then contract is awarded
      - expenditure of goods or services purchased over a extend period of time
        Must be treated as one expenditure
        Contingency arrangements
        When manager of leave
        grade below can approve expenditure
A. Segregation of duties within receipt/receiveing of goods or services
- no manger can sign off on PO and sign off on receipt of goods
  - clear Separation of duties between PO and receipt of goods
    - Required sign off of receipt of goods are as follows
      - B. Procedures to be put in place by budget holders
        PO to state point of delivery
        budget holder clearly document procedure
        controls identified and notified to supplier
        controls should be updated annually
        and held available for auditor
        C not important
      - 1. up to €5000 grade 3
        2. up to €25000 grade 4
        3. above €25000 two managers above grade 5
      - D inspection checking and matching of receipts
        inspect goods or services ASAP
        Match against PO
        if issues return to supplier
        E. authorization and sign off for receipt of goods
        sign off of goods and services
        service above €25000 professional advice can be obtained
        managers responsibility for signing off
        GRN matches the PO this triggers order to pay once there is no issues with invoice
        managers who sign off on services are
        are clarifying that all steps have been carried out to this point
        and are fully compliant with Financial regulations
        and other requirements
Payment Process
- Main Requirements
  - The Definition of Payment Process
    - The release of Payment following receipt and matching of a payment request
      - eg match invoice requisitions and GRN ie (what was received)
        Payment is the final stage of the purchase to pay process
        payment should only occur after proper sign off of receipt of goods or service or works
        Then Authorised payment requests
        Payment clears the HSE of any liability to the supplier
        Payment in general stages
        1. Payment is not as fundamental as Purchasing and receiving
        PURCHASING AND RECEIPT STAGES THE HSE HAS
        A. Approved expenditure via issue of PO or contract
        Signed off the satisfactory receipt are achieved and payment is in order once the proper payment request in received
        These controls at payment stage confirm that all stages are processed properly
        HSE should move quickly as possible through the following
        1. received centrally within the shared service
        2. automatically matched PO and GRN
        Automatically approve for payment once three way match is achieved
        Three way match is
        A. PO + B. GRN + C. Invoice
        If matching fails must be automatically through relevant staff member electronically
        Information to appear on INVOICES
        Budget holder is responsible for managing relationship with suppliers
        either through staff operating the procedures to ensure that invoices are received
        INVOICES SHOULD CONTAIN THE FOLLOWING INFORMATION
        1. Suppliers name and address
        .2. Invoice number and invoice Date/ Tax POINT (date which VAT applies
        3. PO number or equivalent agreed number
        Delivery Details,
        1. Reference number
        2. Delivery date
        3. Delivery address
        4. Description of goods or services being purchased
        5. Vat Exclusive Amount
        6. Vat amount by VAT code
        7. Total invoice amount
        8. Certification information required
        Examples Engineering certification of works
        9. Unit price
        Tolerance level when matching Invoices to PO/GRN
        These regulation permit price tolerance level of 2% or €25
        which ever lower
        This relates to the total amount of an invoice to PO
        Quantity on PO if greater than Delivered amount should not be accepted
        Should be taken back by the supplier
        Price differences all matching differences to be referred to the appropriate staff member
        Budget holder must review these reports
        and report on a quarterly basis to assistant national director of finance
        regarding any trends in occurrence
        importance of timely receipting Entry of GRN on FIN info system FIS
        Goods and services should be properly receipted on FIS
        When delivered
        to ensure mismatch between the PO and goods received
        is quickly identified and resolved
        Prompt entry of GRN on FIS This ensure expenditure is recorded at the proper time
        when it is incurred
        Authorisation levels of payment
        on payment grade level dose not apply
        Prompt payment of interest
        The legislation for budget holders
        Prompt payment of PO or contract
        HSE Standard payment terms to suppliers (traders) are 30 to 45 days from receipt of invoice or delivery of goods
        which ever is later
        if required less than 30 days this requires approval by assistant national director of finance
        ie public utilities Eircom Bord Gais
        Grant to outside agencies payed in accordance with contract or agreement

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Description: Mind Map on Purchase to pay part 1, created by cathal O Toole on 08/08/2018.
Created by: cathal O Toole
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Purchase to pay part 1

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