Student Affairs
Buying 101
Topic 12
Procurement Methods
Students First
12-01
Student Affairs
Buying 101
Procurement Methods
Topic Objectives
• Have a general understanding of the 5 primary ways to obtain goods and
services
• For each, have a general understanding of the timelines, advantages, and
disadvantages
Students First
12-02
Student Affairs
Buying 101
Procurement Methods
The previous slides primarily focused on Procurement considerations, but what
procurement methods are available?
The primary means to obtain goods and services are as follows:
 Requisitions/Purchase orders
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Non-purchase orders (FAS-12)
Procurement cards
Internal orders (100Ws)
Petty cash reimbursements
However, for each of these processes, the basic steps are generally the same.
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12-03
Student Affairs
Buying 101
Procurement Methods
Purchase Order – A purchase order is the offer of a contract between the University and an offcampus vendor for the purchase of goods/services.
• Delegated buyers need to confirm that the cost of goods/services is within the allowable
buying limit of $5,000.
• After the delegated buyer creates the PO, the status of the PO will remain at “Pending
Approval” until it is reviewed for compliance to the University Expenditure Policies and
departmental policies.
• If the cost of goods/services is over $5,000, an on-line requisition should be created.
 Timeline –If over $5,000, once the requisition has been approved by the Business Office,
you should expect the purchase order within 3 to 5 working days if everything is OK. If
purchase exceeds bid limits, expect 3 to 5 weeks to go through the bid process.
 Advantages – with a purchase order you have a contract with the vendor to deliver goods
and/or services at a specified time and amount. Vendor sends itemized invoice to be
approved before payment is issued. MBE is tracked. Able to take advantage of discounts
from vendors as arranged per contracts.
 Disadvantages – may take a little more time if additional approvals are needed. Students First
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Student Affairs
Buying 101
Procurement Methods
Blanket Purchase Order – A blanket purchase order is a type of purchase order. A blanket
purchase order is generally issued to a vendor for miscellaneous items, that are not specifically
listed on the purchase order. Typically, a blanket purchase order does not specify a delivery time
period or prices, and is generally open for one year. A blanket purchase order establishes a line-ofcredit with the vendor and the originating department.
Example: A department may issue a blanket purchase order to a vendor for miscellaneous office
supplies. Then as the office supplies are needed, the department contacts the vendor and places a
phone order.
 Timeline – (Same as a purchase order). Typically entered into PeopleSoft in June for the
following fiscal year.
 Advantages – Separate POs are not needed for each time items are requested. Vendor
sends itemized invoice to be approved before payment is issued. MBE is tracked.
 Disadvantages – no lock-in on prices. Fiscal reports recognize the PO amount as an
encumbrance which may create incorrect budget remaining balances. Only one blanket order
can be issued per vendor, per organization and fund each year.
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12-06
Student Affairs
Buying 101
Procurement Methods
Non-PO Voucher (FAS-12) – The non-po voucher is a paper form that designates the
items that can be purchased without the creation of a requisition or purchase order. (See
list of allowable expenses for Non-PO Vouchers in Appendix M, page 4).
• If the goods/services being purchased are on the approved list (see Non-PO
Voucher List included in your materials) and within any specified limit (see list),
proceed with submitting the invoice or FAS12 directly to Student Affairs Business
Office satellite Accounts Payable. Please note – the Web FAS12 is not longer
available for use by Student Affairs units due to compliance changes in the
University Expenditure Policies (effective 6-06).
 Timeline – payment can be made after appropriate paperwork is complete and
approved usually within a week (assuming vendor is already setup in the payables
system).
 Advantages – no need for purchase order. Payment processing is faster.
 Disadvantages – no MBE tracking, restricted use, and information is not
included in buying/tracking reports.
Students First
12-07
Student Affairs
Buying 101
Procurement Methods
Procurement Card – purchases made with the Pcard provide faster payment to the
vendor. Eliminates use of an employee’s own funds. Must uphold our tax-exempt
status.
• Does the vendor selected accept the University’s Procurement Card?
• Is the cost of the goods within the allowable limits of your Procurement Card?
 Timeline – immediate ability to purchase goods.
 Advantages – billing is automatic through bank and OSU.
 Disadvantages – Purchasing cards have no dispute rights for fraudulent
charges. If the card or card number are lost or stolen, the bank can charge the
department up to $5,000 (or maximum card limit). No MBE, card dollar
limitations, more restricted commodities, and no contract with vendor that goods
will work properly. Always make sure that vendor is not charging sales tax.
Cannot use Pcard for purchasing services. Not able to take advantage of vendor
discounts that may be provided by established university contracts (purchase
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orders).
12-08
Student Affairs
Buying 101
Procurement Methods
Internal Orders (100Ws) - (internal OSU vendors) – Using the 100W form is a
practical and easy method of procuring goods and services within the University.
Required Controls:
• validate that a complete chartfield appears
• validate a departmental approver signature appears on the 100W
• require a receipt signature for all goods and/or services provided to
initiating department personnel
• must maintain security over 100W forms (treat as signed checks) and log to
track use.
 Timeline – purchase of goods or services is immediate
 Advantages – internal billing – less paperwork
 Disadvantages – no MBE tracking. Note – no longer are departments
permitted to accept an accounting chartfield in place of a 100W. Stores is now
beginning to require Requisitions and not 100Ws.
Students First
12-09
Student Affairs
Buying 101
Procurement Methods
Petty Cash Reimbursements – A reimbursement is the paying back of money to a staff
member that has been spent on behalf of the University.
Reimbursements differ from refunds in that a refund is the paying back of money that
has been paid to the University.
• No employee may approve his or her own reimbursement request. The
approving authority must hold a higher University rank than the person being
reimbursed.
• When possible, efforts should be taken to avoid making University related
purchases using an employee’s personal funds.
 Timeline – purchase of goods or services in immediate.
 Advantages – provides quick and easy way to procure items.
 Disadvantages – no MBE tracking and fewer controls. Employee fronts funds.
Maximum reimbursement amount is $50.00 and using Petty Cash for services is
prohibited. Considerable paperwork and time required to reimburse petty cash
fund.
Students First
12-10
Student Affairs
Buying 101
Procurement Methods
How are the processes generally the same?
For each you should:
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Plan, identify, and document the need and get approval
Ensure adequate funds and proper chartfield
Identify the provider of the goods and services
Establish the contract (e.g., use of a Pcard is an agreement that we will pay for the goods)
Receive the goods or services
Receive the invoice (e.g., statement from bank that OSU pays for Pcard expenses)
Match invoice with the purchase order/receipts/receiving documents
Request payment
Pay the vendor
Reconcile transactions and supporting documentation to the general ledger
Regardless of the purchasing or payment method, all documentation must be the same;
• Document business purpose
• Service or delivery dates
• Itemized expenses
• File and retain the documentation in accordance with records retention guidelines
Students First
12-11