Policy
FIACCT 05-01_00 Payments – Vendor payment overview
Effective: July 1, 2003
Revised: October 1, 2012
Reviewed: October 1, 2012
Purpose
This policy defines the use of the General Accounting Expenditure (GAX) transaction and Commodity Based Payment Requisitions (PRC).
Policy
A. Overview – Vendor payments must comply with policies and procedures established by the Division of
Purchasing. (See the Purchasing – Overview policy in the PURCHASING section of this manual.) Vendor payments must be made through the state accounting system (FINET) using a GAX, PRC or GMA document. If Purchasing policy requires a Centralized Purchase Order (PO) transaction or a Delivery Order (DO) transaction, the PRC or GMA document must reference the PO or DO transaction.
B. Certain Encumbrance Transactions – The PO or DO transaction may be bypassed to request payments for the following obligations:
1. Payments to agency contract vendors for land purchases, loans, grants, contracts with local political
subdivisions, or agency contracts with a total value of less than $5,000.
2. Statewide contract payments where the statewide contract number ends with an asterisk (i.e., PD XXX*).
3. Payments for small purchases under $5,000 which are not on contract.
Payments not referencing a PO or DO are made using a GAX.
C. Required Supporting Documentation – Supporting documentation for each GAX, PRC or GMA must
include an original receipt/invoice detailing the name and address of the vendor, items purchased, unit and total cost, and date of purchase. If the purchase is made online or if the vendor does not provide a paper invoice, a printout of an electronic or faxed invoice or an electronic file of the invoice should be used. For purposes of this policy, ‘original receipt/invoice’ includes any hardcopy original, or a faxed or scanned receipt/invoice received directly from a vendor. When departments scan their supporting documents and then destroy those documents, departmental policy should be clear that only original receipts/invoices are scanned.
Employees and those approving payments should take necessary precautions prior to approving a payment to ensure the receipts/invoices are for actual goods and services authorized and received and are not duplicate payments. Supervisory reviews should include the following, as considered necessary:
(a) comparing invoices to purchase orders,
(b) comparing invoices to approved vendor list, and/or
(c) sending payments to approved vendor addresses only.
D. Personally Identifiable Information (PII) – Do NOT put PII in the description line of a payment document unless it is absolutely needed by the vendor to post the payment properly. PII is: (1) any information that can be used to distinguish or trace an individual’s identity, such as name, social security number, date and place of birth, mother’s maiden name, or biometric records; and (2) any other information that is linked or linkable to an individual, such as medical, educational, financial (i.e. bank account number, tax identification number, credit card number, etc.), employment information, address, date of birth, and driver’s license number, etc.
Procedures
Responsibility
Action
Originating Department
Receive the vendor invoice and assign accounting codes for FINET input. Pre-audit the information to determine that policies and procedures have been followed.
Enter the data into FINET. Reference the PO or DO transaction, if required. Apply edits and electronic approvals, as needed.
Write the FINET Document number on the supporting documentation and file. Alternatively, the vendor payment document can scanned and attached to the GAX, PRC or GMA document in FINET. Or it can be printed and attached to the hardcopy supporting documentation and filed.
Make documents available for audit by the Division of Finance and the State Auditor.
Division of Finance
Process the FINET system. Post-audit transactions for propriety.