SECTION II
RECEIVING AND PAYMENT
Use these links to help navigate through this page
- Receiving and Payment Process
- Timely Vendor Payment
- Confirming Purchases
- Contract Liquidation
- Reimbursement for Lunches and Receptions
- Sub-Object Codes
- Honorarium/Independent Contractors
- Newspaper Advertising
- Moving Expense Reimbursement
This section of the manual describes the College's receiving and payment process and provides information on areas having special processing needs. The receiving and payment process ensures that the College receives the proper items, in good condition, at the best price and that vendors are paid promptly and accurately for their goods and services.
The Purchasing Office is crucial in this process as it is normally involved in establishing a purchase order with a vendor to obtain a good or service. The purchase order contains various accounting information as well as identifies the good or service to be provided, price of the good or service and any particular terms regarding delivery or payment. A purchase order is a contract with the vendor and, therefore, any variations from the terms of the purchase order will not be honored without prior approval by the Purchasing Office. The College strives to pay vendors as expeditiously as possible.
However, the account being charged must have sufficient funds to pay the charge, otherwise, the Accounts Payable Office will reject the item and notify the account manager. Payment will not be made until adequate funds are assigned to the account. Any interest charges accrued as a result of insufficient funding, or failure to properly notify the Accounts Payable Office that goods or services have been received, will be assessed against the account.
- Receiving and Payment Process
After an item is ordered, a copy of the purchase order is sent by the Purchasing Office to the account manager. It is the account manager's responsibility to review the purchase order when received from the Purchasing Office to ensure the information on the purchase order fulfills the department's needs. Since the purchase order is actually a contract with the vendor, it is important that the Purchasing Office settle any issues with the vendor as soon as possible.
Goods can be received through the College's Central Receiving function or directly by departments. Central Receiving examines items received to ensure the items are in good condition and to verify compliance with the purchase order. If the items are in order, the Receiving Report is signed by Central Receiving staff and forwarded to the Accounts Payable Office. In the case of equipment items, upon delivery of the equipment to the user department, Central Receiving staff obtains a co-signature of the department on the Receiving Reports; the Receiving Report is then forwarded to the Accounts Payable Office. The purchase order directs vendors to send invoices to the Accounts Payable Office. When an invoice is received from a vendor, the Accounts Payable staff matches the invoice to the purchase order and to the signed Receiving Report. Assuming that all information agrees, payment will be issued to the vendor, either through petty cash (less than $250) or the State Comptroller's Office. It is essential that the payment process be initiated by departments as soon as possible after acceptable goods or services are received to ensure vendors are paid on time; for two very important reasons: (1)it is good business to do so, and; (2)New York State has a strict Prompt Payment Law.
The Accounts Payable Office will not pay purchase orders for goods specifying an installation or testing period until directed to do so by the department or unless specified in the purchase order. If an item requires installation or allows for a test period, such arrangements should be clearly specified on the face of the purchase order. The Accounts Payable Office will rely on the purchase order to determine if an installation period is provided. If not stated in the purchase order, it will be necessary for the department to obtain a written statement from the vendor specifying the allowed installation or testing period.
Freight will only be paid when it is specifically identified on the purchase order. When departments obtain quotes and recommend a vendor and price to the Purchasing Office the requisition should specify that freight is or is not included in the price so it can be noted on the purchase order. The following wording will be used by the Purchasing Office regarding the payment of freight:
Purchase Order Wording Meaning Freight included in item price. Accounts Payable Office will pay only purchase order amount. Freight to be prepaid and added. Accounts Payable Office will pay freight based on invoice and reasonableness of charge. Estimated freight charges. Purchase order will state a dollar amount for encumbrance purposes. Accounts Payable Office will pay based on invoice and reasonableness of charge. - Timely Vendor Payment
Vendors have a right to be paid in a timely manner for goods and services provided to the College. Departments play a major role in the payment process because payments will not be made until the department notifies the Accounts Payable Office that the item has been received in proper condition. To give agencies added incentive and vendors restitution for untimely payment, New York State prompt payment legislation specifies that if a check is not issued to a vendor within 30 days from the date either the good or service or an appropriate invoice is received, interest of about one percent per month may be paid to the vendor. The actual percentage applied is dependent on current interest rates. The legislation provides that late payment checks will be issued to vendors only if the total interest is $10 or more. Lesser interest charges are not assessed. The legislation applies to payment for goods and services charged to the supply and expense or equipment category. It does not apply to payroll or payments made to certain State or State-related agencies. If there is a question as to whether interest should be applied to a particular transaction, contact the Accounts Payable Office. The prompt payment guidelines dictate the circumstances under which the College will pay interest. Therefore, vendor policies specifying different rates or late payment fees do not apply to the College. Interest payments will be charged directly to the respective account sub-object number 5799 thereby increasing the cost of the good or service to the department and College. Because payment of interest is an unnecessary expense, departments should ensure their receiving procedures are adequate to avoid incurring the charges.
- Reasons for Not Paying Interest
The legislation provides certain circumstances that allow interest to be waived.
- Vendor did not fully meet purchase order terms.
- Items received were unacceptable to the College.
- Vendor not eligible for interest (other State agency, related agency).
- Invoice received from vendor inadequate for making timely payment.
- Invoice information was incorrect or incomplete requiring follow-up or clarification.
- The purchase order directs vendors to submit invoices to the Accounts Payable Office. If the vendor sends the invoice to other than the Accounts Payable Office, the time period for interest accumulation does not begin until the invoice is received in the Accounts Payable Office. However, if the department directs the vendor to send the invoice to a location other than the Accounts Payable Office, the invoice is considered received when delivered to the place directed by the department.
- Vendor Notification
Prompt payment legislation is very specific regarding vendor notification if there is reason to delay payment because of vendor nonperformance. To ensure such vendor notification is done in accordance with legislation requirements, it is suggested that all vendor notices of inadequate fulfillment of the purchase order be coordinated through the Accounts Payable Office. However, departments are allowed to have direct contact with vendors if they wish.
When direct contact is made, the department should note the following:
- Vendors must be notified that the good or service is not acceptable within fifteen days from the date the good or service is received by the College. This period includes the time used for the good to be transported to the department from the College's Central Receiving function.
- All vendor contacts should be documented with written correspondence. Telephone contact or verbal exchanges with vendors are not adequate to support an exception from interest payment requirements.
- Reasons for not accepting the goods or services must be specific and state clearly the reasons why the item is not acceptable.
- A copy of the correspondence should be forwarded to the Accounts Payable Office to ensure the office is aware of the dispute and to prevent a payment being issued by mistake.
- Vendors must be notified that the good or service is not acceptable within fifteen days from the date the good or service is received by the College. This period includes the time used for the good to be transported to the department from the College's Central Receiving function.
- Reversal of Interest Charges
Interest charges are assessed by the State Comp-troller's Office based upon delivery and acceptance information provided by the College. Interest charges are listed as object number 5799 in the "SUB OBJ" column of the department's monthly accounting report. No separate notification of late charge assessments is sent to departments.The Accounts Payable Office coordinates all College interest charge appeals. If a department believes a late charge is inappropriate, it should notify the Accounts Payable Office as soon as possible so action can be taken to reverse the assessment. To overturn an interest assessment, it is necessary to identify the circumstances relating to the receipt and payment of the goods and services to document that the interest charge was not appropriate. Based on the information provided by the department, a decision will be made as to whether the appeal is justified.
If there does not appear to be a reasonable basis for the appeal, the request will be returned to the department. When departments use the Accounts Payable Office to notify vendors that items are not acceptable, the Accounts Payable Office will have all the information needed to resolve the interest matter. However, if the department deals directly with the vendor, the Accounts Payable Office will need copies of all vendor correspondence to document the situation and initiate an appeal. The Accounts Payable Office will contact the vendor and/or the Office of the State Comptroller as appropriate. The results of the appeal will be reported to the department and, if appropriate, an adjustment made to the department's account.
If an interest charge is levied against an account due to an Accounts Payable Office error or because of circumstances outside the department's control, the above information should be provided to enable the Accounts Payable Office to withdraw the interest charge from the account.
- Reasons for Not Paying Interest
- Confirming Purchases
At times (such as emergencies) it is necessary to quickly obtain an item and it is not possible to follow the standard purchasing process. In those cases, persons obtaining the item may either pay for the good, or request that the College be billed by the vendor. Also, refer to Section VIII.- Reimbursement to Individuals
When an individual uses personal funds to pay for an item, upon returning to the College, an approved requisition with written justification as to why it was necessary to circumvent the standard purchasing process must be submitted to the Purchasing Office, together with the paid invoice and cancelled check or other proof of payment. The Purchasing Office will review the transaction and determine if it is an appropriate expense. If acceptable, the Purchasing Office will forward the documents to the Accounts Payable Office, which will pay the individual. Please note that when an individual uses personal funds to pay for an item on a confirming basis, he/she risks taking personal responsibility for and absorbing the charge if the Purchasing Office determines it is not an appropriate State charge, or justification is not adequate, or for some other reason. Please refer to Section VIII-D.2. of the manual which details the College's emergency purchase procedure. - Payment to Vendors
When the College is to be billed by the vendor for the item(s) obtained, the person should again submit a requisition, and written justification, to the Purchasing Office, indicating that the item has already been received. Purchasing will review the requisition and related circumstances to ensure it is appropriate. If appropriate, the Purchasing Office will forward the documents to the Accounts Payable Office to be matched to the vendor invoices. The vendor should send the invoice directly to the Accounts Payable Office, which will then match the approved requisition with the invoice and pay the vendor. Under no circumstance should the individual return to the campus with an invoice and submit it to the Accounts Payable Office. Submitting invoices in this manner may result in a refusal to pay by the Accounts Payable Office.
- Reimbursement to Individuals
- Contract Liquidation
Departments enter into multi-payment contracts for many reasons, such as equipment maintenance, rent, supplies, or other services. The Purchasing Office encumbers the account for the estimated full annual usage and the encumbrance is liquidated based on invoices received from the vendor.
By monitoring the monthly departmental accounting reports, account managers can determine the current status of the contract. The report shows each payment and the remaining balance of the contract is shown as outstanding. It is important to monitor contract activity to ensure charges are appropriate and to ensure adequate funds have been encumbered against the contract to match the account's annual needs. This is particularly true for contracts that provide for different periodic payments. It is also important to review contract activity to ensure excess encumbrances are not outstanding at the end of the year, as this would result in account funds being unnecessarily committed when the contract encumbrance level could have been reduced and funds made available for other account needs.
- Reimbursements for Lunches and Receptions
Often, College employees meet with persons during a meal, conference, or reception where the employee may purchase food or beverages in consort with the activity. State Comptroller regulations specify that employees can be reimbursed for the costs of food and lodging (within prescribed limits) while in travel status. However, the State Comptroller's office will not pay for reimbursement of internal meetings, lunches, or seminars, based on the presumption that the employees would have to purchase food or beverages regardless of the meeting, etc. and that the State will not pay for employee meals, etc. while the employees are not in travel status.
When recruitment is the reason for the meeting, the candidate's and his or her spouse's travel and meal costs will be reimbursed; however, the meal costs for faculty or College staff involved in the recruitment process will not be reimbursed.
To decide if reimbursement can be made, functions are divided into two types: those that are open to off-campus public and those that are primarily College activities. For purposes of this policy, if an activity is announced outside the College, the activity is considered an off-campus public activity. Conversely, if the activity is not announced off campus, the activity will be defined as on-campus activity.
TYPE 1 - Activity Open to Off Campus
Food or beverage costs associated with lunches, receptions or conference meals advertised to the off-campus public are allowed.
The following documents will be required:
- Properly prepared and approved requisition.
- Vendor invoice(s) documenting all costs submitted for payment.
- List of attendees.
- Copy of function notification and agenda.
- Memo of justification.
TYPE 2 - Activity Attended Primarily by College Personnel
Food or beverage costs for activities advertised only to the campus community will not be allowed.
However, some accounts provide allocation (because of their unique nature) for payment of lunches, dinners, etc. for the participants of a program, as well as counselors, etc. These accounts will be allowed to make such expenditures upon submitting the information noted above for TYPE 1 expenditures and approval by the Business Office.
Alcoholic beverages will not specifically be paid by the NYS Comptroller under any circumstances.
- Sub-Object Codes
Funds are allocated to departments at the major object level (Personal Service (IFR's); Temporary Service; Supplies and Expense, and Equipment. Within each of these objects, a coding scheme is applied to each transaction to provide additional information regarding the nature of the transaction. This coding scheme is referred to as Sub-Objects.
Sub-objects provide information on what is being purchased with account funds. The College has established standardized sub-objects for most items which may be purchased.
Usually Sub-Objects are assigned by the Purchasing or Accounts Payable Offices when transactions are processed. However, departments with special coding needs should insert the code when preparing the requisition. The Purchasing or Accounts Payable Office will not change a sub-object code assigned by the department unless it conflicts with the overall College coding structure.
- Honorariums/Independent Contractors
Lecturers, guest speakers and performing artists providing up to $2,500 in services of a short duration (less than six consecutive days) may be paid through the honorarium process without a contract. When the amount to be paid is over $2,500, a contract is required. The Purchasing Office coordinates issuance of the contract. The approval process is detailed in Section VIII of this manual.
- Determining Status
When a someone's services are to be obtained through the honorarium or independent contractor process, it is necessary to ensure that an employee relationship is not in fact being created. This determination requires examination of a number of different factors regarding the work situation.
Internal Revenue Service rules dictate the situations under which persons must be hired as employees. The following questions establish guideposts to clarify the relationship between the College and the individual to determine if an employer/employee relationship exists.
- Does the worker provide the same or similar service to others?
Response: Members of a distinct trade, business, or profession who offer services to the public, but are not under control of those seeking benefit of their training or experience are generally independent contractors.
- How is the worker paid?
Response: An independent contractor usually receives one sum for the entire engagement, whether in a lump sum or installments.
- At what location will the services be performed?
Response: If work is done on premises other than those of the College, it may be indicative of an independent contractor relationship.
- Are materials supplied by the worker?
Response: Independent contractors are generally not provided with supplies and materials.
- Is a license, certificate, professional degree, or special skill required for this service?
Response: A person hired to do work not in the usual course (or specialization) of the College's business, may be an independent contractor.
- Will the worker receive close supervision or instruction?
Response: An employer/employee relationship usually exists when the College has the right to direct and control the individual in the way he/she works, both as to final results and as to the details of when, where, and how the work is to be done.
- Will training be provided to the worker?
Response: Normally, independent contractors are not trained, but rather hired for their expertise in a field.
- Will the worker be expected to follow daily or weekly schedules, etc. established by you (as opposed to complying with completion dates)?
Response: Normally, an employer/employee relationship exists for those persons who have established working hours and must perform certain tasks at certain times. They are paid a regular amount at stated intervals and can be discharged or have the right to terminate a relationship without incurring liability.
- Do you have the ability to direct or change the methods used by the worker?
Response: Generally, employees perform services for someone who has the right to control the desired result or direct the method of accomplishing those results. Conversely, an independent contractor usually works without direction or control and is only responsible for the completed job or result.
- Will the worker be working full time or nearly full time on this project?
Response: Generally, employees work full time for an employer, while independent contractors work when and for whom they choose.
- Does the worker have a significant investment (capital, equipment, licensing, etc.) in his/her business?
Response: Typically, employers provide employees with facilities, tools, materials and other equipment. When the worker invests in these assets, there is a tendency to indicate independent contractor status.
- Does the worker provide the same or similar service to others?
- Honoraria
If the person is determined to be an independent contractor (based on the above), the services are of an academic nature, and the amount to be paid is less than $2,500, the honorarium process can be used. If not of an academic nature, or if the payment will be more than $2,500 refer to Section VIII.
Honoraria are paid from an account's temporary service allocation. In most cases, checks are issued directly to the recipient as stipend and reimbursement of costs. If the total honorarium is only to pay travel costs, the vendors providing the services can be paid directly by the College.
Please note that honoraria can be used only in specific cases. Honoraria cannot be used to pay a person on a New York State payroll (at Purchase College or any NYS agency) or students, regardless of term or amount to be paid.
- Determining Status
- Newspaper Advertising
All advertising copy must be forwarded to the Human Resources Office for Affirmative Action approval prior to submitting any documents to Purchasing.
Human Resources will return the approved copy to the originatior. A fully completed purchase requisition along with the approved advertising copy shall be forwarded to Purchasing. The issued Purchase Order will have an estimated amount and later will be adjusted for actual billing.
The ad copy should be typewritten on a plain 8 ½"x 11" sheet of paper. At this stage no editing will be authorized and the ad copy will be transmitted to the publishing newspaper.
- Moving Expense Reimbursement
The guidelines under which new employees are reimbursed for moving expenses are complex, and unless fully met could delay reimbursement to the employee. Most of the delays regarding reimbursement of moving expenses occur because items were not presented properly or items not covered were submitted for reimbursement. Although this section highlights the College moving expense policies, the Accounts Payable Office should be contacted before any commitments are made to a potential new employee to verify that the proposed arrangements are allowable.
Generally, up to $3,000 of moving expenses is reimbursable to a State employee upon initial appointment to a technical, scientific, educational, professional, or administrative position if there is a shortage of qualified candidates in New York State. The College president and respective vice president must certify that this condition exists for moving expense reimbursements to be allowable.
The State will reimburse up to $3,000 for the cost of moving household goods and personal effects from the employee's residence at the time of appointment to a residence located near the new place of employment.
The $3,000 is intended to cover the following:
- The cost of loading, transporting, and unloading household goods and personal effects, including such items as pianos, refrigerators and deep-freezers. Household goods do not include automobiles, other motor vehicles or trailers other than house trailers used as the employee's residence. Moving costs associated with farm tractors, farm implements and equipment, live-stock, boats, belongings that are not the property of the employee's immediate family, belongings related to commercial enterprises, and building materials are not reimbursable. Also, no reimbursement will be made for household goods and personal effects in excess of 12,000 pounds.
- The cost of packing or unpacking household goods and personal effects, if such services are provided to the employee by the carrier.
- The cost of storage of goods in transit. Allowed costs include actual storage and required warehouse handling. Reimbursement will not be provided for storage or handling of goods in excess of 12,000 pounds.
- Reimbursement of transportation costs for the employee and his/her family to move to the new location will be made at the rate currently paid by the State for the use of personally owned automobiles on official State business, regardless of the travel means used by the new employee. Mileage is measured by the shortest highway route between the two places of residence. Payment will be made at the mileage rate for one automobile, regardless of the number of vehicles used or actual method of transportation used.
If the employee does not use a commercial carrier, reim-bursement will be made only for the cost of renting trailers and trucks from commercial establishments for moving the effects listed above. If a trailer or truck is not rented from a commercial establishment, the employee may be eligible to receive up to $200 to cover moving expenses, provided the claim is accompanied by documentation showing that such expenses were actually incurred.
Regardless of the costs being reimbursed, the claim for reimbursement must be submitted within one year of the move.
Required Forms and Related Documents:
All forms must be filled out completely before processing can be initiated. The forms can be obtained from the Accounts Payable Office.
Following is an explanation of critical data provided by each form:
- MEMORANDUM to the President or his designee seeking authorization for the relocation reimbursement and shortage of qualified candidates.
- PURCHASE REQUISITION: Identifies the State or IFR Account Number, amount to be reimbursed, and the name, address, and social security number of the new employee. The requisition must be authorized by an account signatory.
- STANDARD VOUCHER (AC-92): Includes much of the same information as the purchase requisition, but is the document required by the State Comptroller for payment.
- STATEMENT OF AUTOMOBILE TRAVEL (AC-160): Indicates the number of miles to be reimbursed at the standard mileage rate.
- REQUEST FOR REIMBURSEMENT FOR MOVING EXPENSE AGREEMENT (AC-1099): Compiles information for State Comptroller records and must be signed by both the employee and the appointing officer. This form accompanies the standard voucher to the State Comptroller.
PURCHASE COLLEGE
Non-Procurement
Character and Object Codes
(alphabetical order)
| TRAVEL | |
|---|---|
| 4300 | Car Mileage |
| 4204 | Lodging |
| 4200 | Meals |
| 4101 | Bus |
| 4150 | Car Rental |
| 4215 | Plane |
| 3018 | Reg. Fee |
| 4203 | Taxable Meals |
| 4104 | Taxi |
| 4225 | Train |
| MOVING EXPENSES | |
|---|---|
| 4920 | Household |
| 4929 | Other |
| 4921 | Travel and meals |
| OTHER | |
|---|---|
| 5835 - 5838 | Advertising |
| 5011 | Freight |
| 5803 | Grants (NDSL, SEOG, PELL, EOP, SUGIA) |
| 5801 | Tuition Waivers |
TO: President Lacy
FROM: Jane Smith
SUBJECT: Moving Expenses for John Doe
DATE: July 19, 2001
As required by campus accounting procedures, I am requesting your authorization for moving expenses for John Doe, a new employee in Biology. A standard voucher and related materials are attached. Funds for this purpose have been set aside by Jane Smith in Account No. 999999.
Attachments
Approved:
Vice President or President