Financial Procedures
4.0
Section 4 - Purchasing goods & services
4.1
Budgetary control
No expenditure may be incurred unless it is matched by uncommitted approved
budget provision.
Requisitions and orders can only be raised following the prior written approval of the
relevant budget holder in accordance with the authorisation procedure outlined
elsewhere within these financial procedures.
4.2
Ordering system – purchase requisitions
Wherever practicable, purchases of goods and services must be initiated by the issue
of an official purchase requisition form, either using the pre-printed paper form or
the e-requisition functionality within E-financials (E-requisitions are for orders up to
£5,000 only). The pre-printed forms shall be securely retained within the finance
department and only issued to authorised members of staff as required. The latter
shall ensure that any such forms in their custody are also kept in a secure place. The
Purchase Ledger Supervisor/Ledger Administrator(s) shall keep a register in which
details of purchase requisitions issued are recorded.
Paper purchase requisition forms will be pre-numbered and in duplicate. Following
completion of paper form, the original will be sent to the finance department and a
copy retained by the originator. Where the requisition is generated electronically a
unique reference is generated by E-financials, prefix R, the ‘originator’ and
‘approver’ are recorded electronically. Approval is set up in E-financials in
accordance with section 11. Approved requisitions are reviewed daily by the
Procurement Officer, queries are returned to the originator. The Procurement
Officer ‘converts’ the requisitions to a purchase order, the order is approved in the
Purchase Order Processing module by the Ledger Administrators.
The following details are required:
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quantities
prices, including any discounts (net of VAT)
total VAT due on order
delivery dates and addresses
a full description of the goods or services
the full name and address of the supplier
Supplier code
cost centre, account and activity to which expenditure is to be charged
All paper purchase requisitions must be signed by the originator of the form and be
countersigned by an authorised signatory in accordance with the authorisation
procedure.
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Paper Purchase Requisitions with incomplete details will be returned to the
originator.
The Procurement Officer will review purchase requisitions received to ensure that
preferred CPC/OGC suppliers are utilised whenever possible. All new suppliers must
be requested using the ‘New Supplier Request Form’ prior to completing the
purchase requisition.
4.3
Ordering system – purchase orders
Following the review outlined above, details from the paper requisitions shall be
entered into the accounting system via the purchase order processing module. Paper
requisitions are input by the Ledger Administrator and checked by an additional
member of the team, both sign the purchase requisition to evidence the check.
Higher value purchase requisitions have to be authorised by the Finance Officer or
Deputy Director of Finance or Director of Finance before an official order can be
generated, in accordance with the authorisation limits.
Official purchase orders, derived from the input of paper purchase requisitions or
from receipt of electronic requisition, shall be distributed as follows:
 electronic or hard copy to supplier
 copy to the originator for matching to the purchase requisition and for
subsequently authorising the purchase invoice via access to a view on Image Now
 electronic file copy via Image Now for the finance department
All hard copy system orders printed for release to suppliers are signed by 2 1
member of finance by either the Procurement Officer, Purchase Ledger Supervisor,
Accounts Clerk or Purchase Ledger Clerk to evidence a final review of accuracy.
Official purchase orders will normally be raised within 2 working days of the receipt
in the finance department of a fully completed, authorised purchase requisition.
Purchase order stationery is securely retained in the Finance Department.
4.4
Exceptions
In certain circumstances where, for example, operational requirements dictate, the
standard purchase ordering system outlined above shall be waived. Illustrative
examples include:
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Recurring perishable supplies such as foodstuffs when the holding of sufficient
stock is impracticable given the nature of the goods, turnaround and lead times
Emergency repairs to buildings or equipment
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Urgent health and safety works
Other urgently required sundry items
Items purchased via the internet (non-purchasing card)
Where these exceptions are deemed to apply, a purchase requisition must still be
raised and authorised before a commitment is made to incur expenditure. The actual
commitment can be made e.g. verbally or by faxing the purchase requisition. The
purchase requisition should be passed to the finance department as soon as possible
after the verbal or fax commitment has been made. In these circumstances the
purchase requisition must be passed to the finance department clearly marked
‘Confirmation only’.
In addition to the above, Company Barclaycard and the petty cash system is available
to support the purchase of low value goods required on an ad hoc basis and should
be used wherever possible.
Services agreed under contract which have been competitively tendered, such as
utilities, insurance, and audit shall be exempt from the purchase requisitioning and
ordering system. Other fixed costs such as licences, exam fees, major service
contracts, masterplan contractor costs and central purchase contracts (e.g Lyreco)
may also be exempt from the requisitioning and ordering system, however, this list is
not exhaustive and liaison with the Finance Department to agree any additions to
this list is essential prior to commitment with suppliers.
The College requires that all purchases of “cash equivalent” vouchers (eg vouchers
for high street shops, chains of shops, the Mall in Blackburn etc) are purchased via a
purchase requisition and purchase order which is submitted to the finance
department and processed as described above.
Vouchers will be delivered to the finance department and distributed to the person
raising the purchase requisition for distribution to students. It is the responsibility of
this person (usually a resource manager) to account for these vouchers. It is
expected that resource managers will not hold a stock of vouchers, but order as and
when required to exact numbers needed. Vouchers for distribution to staff
represent a benefit in kind and can only be purchased with the prior approval of the
Director of Finance or other member of the Executive team.
4.5
Purchasing policy
The College aims to maximise value for money from its procurement processes.
Membership of the Crescent Purchasing Consortium (CPC) is an important and
evolving element of the College’s strategy in this regard. CPC have a continuously
increasing number of tendered contracts in place covering a wide range of goods and
services and, as a general principle, use of these contracts is advocated wherever
possible. The college also has access to Office of Government Commerce (OGC)
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negotiated contracts.
The College’s Procurement Officer (located in the Finance department) acts as
CPC/OGC liaison officer and is the first point of contact regarding queries in this area.
There are a number of key requirements for all members of staff involved purchasing
goods and services that assist the College in maximising value for money.
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Separate College wide arrangements apply to the ordering of stationery and
IT consumables. Requests for furniture are referred to the Estates Manager
prior to order.
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Where quotations or tenders are being obtained (in accordance with these
Financial procedures) for goods or services covered by CPC’s contracts, the
relevant CPC suppliers must be invited to bid.
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Details of the College’s preferred suppliers are listed on the staff intranet
system. A copy of the CPC supplier list directory is circulated by the
Procurement Officer annually to key purchasers across college (e.g. Resource
Managers).
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To assist in securing best value and consistency across the College, orders for
Estates related goods and services must be agreed in advance with the
Estates Manager (or his nominated representative). This requirement shall
cover all manner of buildings adaptations, maintenance and other works and
also the purchase of furniture and related items for classrooms / offices etc.
Furniture requests should follow the Furniture Procurement Process and use
the Furniture Request Form.
This requirement shall apply irrespective of which particular delegated
budget or ‘project’ the expenditure is to be charged against.
In the event on any uncertainty regarding the application / scope of this
requirement, the Estates Manager (or his nominated representative) must be
consulted prior to a commitment being made.
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To assist in securing best value and consistency across the College, orders for
IT / Computer equipment must be agreed in advance with the Computer
Services Manager (or his nominated representative) following the IT
Procurement Process using the IT Equipment Request Form. Purchases must
be in accordance with the Laptop and Mobile Device Policy.
This requirement shall cover:o all manner of hardware purchases i.e. all specifications of P.C’s
(including portable items – ‘laptops’, ‘notebooks’, ‘tablets’, ‘mobile
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phones’ etc) and associated peripheries (including printers, scanners
etc) irrespective of whether or not they are to be networked devices.
o the purchase / licensing / support & maintenance arrangements for
software packages where such software is to be installed on and
operated via the College’s network.
o all manner of connectivity works e.g. cabling, switches, routing etc
irrespective of whether or not this relates to the main College
network or an alternative proposed LAN.
This requirement shall apply irrespective of which particular delegated
budget or ‘project’ the expenditure is to be charged against.
In the event on any uncertainty regarding the application / scope of this
requirement, the Computer Services Manager (or his nominated
representative) must be consulted prior to a commitment being made.
4.6
Company Barclaycard
Introduction
Company Barclaycard Purchasing is a Government Purchasing Card VISA charge card
system which helps the College simplify low value, high volume procurement
processes and support staff travelling on College business.
This procedure outlines processes to be followed by internal users issued with
Company Barclaycards. The Deputy Director of Finance / Finance Officer (FO) shall
overview the process in conjunction with the Executive.
Cardholders
Cards should be requested via the Credit Card Request Form (CCR1) and approved by
the Executive (this includes approval of both monthly limits and transaction limits).
All cards and PIN notifications are addressed to the Finance Department and show
the cardholders name. Upon receipt of the card by Finance the cardholder is
contacted to sign the card. Signed cards are held securely in the Finance
Department. Communications containing PIN numbers are passed on, unopened, to
the cardholder. The Finance Team do not keep a record of PIN numbers.
It is the responsibility of the cardholder to ensure that the card details and PIN are
kept separately and in a safe place at all times. It is recommended that these details
be stored e.g. on a password protected IT file (e.g. Excel). The card details must not
be accessible or divulged to anyone else.
The card account must only be used for the bona fide purchase of goods or services
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for the benefit of Blackburn College and must only be used by the cardholder. The
card account cannot be used for the purchase of personal items. The cardholder is
responsible for all transactions entered into on their account. On a monthly basis
card account purchases must always be authorised by someone at a higher level
than the person making the purchase e.g. CCH or E Group member. Failure to
comply may be treated as gross misconduct.
In the event of loss, theft or if card details are compromised, the cardholder should
inform Company Barclaycard immediately by telephone and notify the Deputy
Director of Finance / Finance Officer. The Finance Officer will maintain a record of all
instances notified and arrange for a replacement card if applicable.
On receipt of their card details, each cardholder will complete a card acceptance
form. This form is to record receipt of the card details, record agreement to the
terms and conditions of use and is confirmation that the cardholder will adhere to
these procedures. A copy of the terms and conditions of use will be issued to the
cardholder. Specific training will be provided to ensure that the cardholder
understands the processes involved for recording purchases and approval.
Where cardholders require removal of the card from the Finance Department an
‘Application to Remove Credit Card from Finance Form’ (ACC1) must be submitted
and approved by Executive, providing five days notice. The card must be signed out
and back, the Finance Officer will maintain this record. The request must clearly
state the duration the card is required and the maximum amount that will be spent,
both of which must be kept to a minimum.
Misuse of the cards may be treated as gross misconduct and be subject to normal
disciplinary procedures.
Cards issued in the ‘travel’ category are only to be used for travel related activities
(which includes hosting visitors) and cannot be used for any other purpose without
prior agreement from the Executive.
Physical verification of cards held in finance is carried out monthly and evidenced as
such on the card statement by the Purchase Ledger Supervisor/Finance Officer.
Card limits
There will be a monthly spend limit and transaction limit set for each cardholder, in
all cases limits are set following approval from the Executive. The limits will be set
based on expected usage and data available on spend for cardholders with similar
roles. As a guide, a Resource Managers limit would be £5,000 per month with a £250
transaction limit. All cards issued for travel will be set with a nil spend limit, and
amended when travelling via the ACC1 form process. The cards do not allow for cash
withdrawals from ATM machines, with the exception of those issued purely for
travel, if approved by the Executive.
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Any variation is as authorised by the Executive on the Credit Card Limit Increase
Request form (CCL1) and actioned by the Finance Officer. Variation requests must be
provided with sufficient notice for Executive to approve on a weekly basis. The
Finance Officer will retain a log of variations and the email giving approval.
Each month a report containing transaction limits and monthly spend limits for each
card will be produced by the Finance Officer and included in the monthly
reconciliations file for review by the Deputy Director of Finance. These limits will be
checked against the variation approvals to ensure that cards are at the approved
limits.
Using the card
As the cards are predominantly for low value items it is intended that the card be
used wherever possible to purchase sundry goods and services up to a value of £250
incl VAT.
Process
The card should be used to minimise the production of low value official orders.
Internal Purchase Requisitions (PRs)/College purchase orders should not be raised or
sent to the suppliers or Central Finance. Goods/services should be ordered over the
phone/ internet and paid for directly using the card. Exceptions to the above: If
Central Finance are making the payment on behalf of a budget-holder OR if a
cardholder is making a payment above their authorisation limit a Purchase
Requisition will be required. This is to evidence the appropriate level of budget
approval, it is for internal records only and it will not be issued to the Supplier. For
clarity, these PR’s should be marked clearly ‘Paid by credit card’.
All cardholders within curriculum and service areas must maintain a spreadsheet
record of transactions made using their card.
When placing an order the cardholder must ensure that the purchase is within the
card’s transaction limit (including VAT and carriage charges) and that their monthly
limit has not been reached.
The cardholder must also confirm whether the supplier is electronic VAT capable. If
they are, they need not submit a VAT invoice - HM Customs and Excise accept
purchasing card VAT reports as evidence for reclaiming VAT (for transactions up to
the value of £5,000). Instead, for reconciliation / audit purposes, the supplier will be
asked to forward to the cardholder a priced delivery note or itemised receipt
(marked “Paid by VISA”).
Where a supplier is not able to transmit electronic VAT data the cardholder must
ensure that a traditional paper VAT invoice is received (marked “Paid by VISA”), as
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this will be required for legal evidence.
It is essential that any invoice/receipts are not authorised for payment via other
payment methods e.g. Petty Cash or Purchase Ledger
The cardholder is responsible for ensuring that all relevant VAT documentation is
received from suppliers used. All documents should be held securely by the
cardholder in accordance with 5.5 financial regulations as prime documents.
On receipt of the invoice / paperwork the cardholder will check that all the details
are correct (i.e. items, quantity, price). If any discrepancy is found the supplier
should be contacted to request a refund and VAT credit note.
Transaction logs
Each cardholder will maintain a spreadsheet log outlining all transactions made. The
spreadsheet must be as issued by Finance (named the Purchasing Card Payment
Record) must be completed fully with the following details:
Cardholder name and statement month
Log No (sequential)
Cost centre/account code/activity code
Date Processed
Supplier Used
Purchase requisition (PR Ref) number (if applicable – see above)
Brief description of goods or services purchased
Value (net, vat & gross)
Confirmation status e.g. Goods received/Invoice receipt received
Month Transaction cleared on Statement e.g. Nov-02
Comments Note (as required)
Purchase Ledger Account Reference should be included in the comments section if
applicable – this applies to Central Finance only, by exception, where fast payment is
required.
Review and postings
Company Barclay card statements will be issued to cardholders on a monthly basis.
Transaction logs will be reconciled to individual cardholder statements received from
Company Barclaycard on a monthly basis by the cardholder.
This log must then be reviewed and certified. For account holders in curriculum
areas this must be carried out by their Curriculum Centre Head. For account holders
in service areas this review must be carried out by a Service Area Manager –
cardholders will be individually advised of these details when their card is issued.
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This is a fundamental propriety review requiring the signatory to ensure that: 
Transaction detail on the cardholder statement agrees to the log and visa versa.
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All supporting paperwork has been obtained to evidence each transaction.
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All goods/services have been received for each transaction.
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The procedure detailed in this document has been applied by the cardholder.
The reconciled transaction log (paper copy) plus the cardholder statement should be
returned to the Finance Officer / Purchase Ledger Supervisor within 5 working days
of issue. The reconciled transaction log requires the signature of both the cardholder
and authorised signatory/ manager before it is returned. In addition, an email copy
should be forward to the Assistant Accountant following reconciliation and
authorisation to facilitate update to the e-financials accounting database.
Card Purchases will be posted to the general ledger via a cashbook journal (as part of
standard monthly routines).
Barclaycard management information
The College has access to the following online reports:-
Summary organisation statement
Individual cardholder statement(s)
Evidence for VAT report(s)
Trade category analysis report(s)
Exception report (all transactions value >£100)
Authorisation requests
Cardholder statements will be reconciled as outlined above.
The Procurement Officer will review expenditure reports to identify opportunities to
improve value for money and where a preferred supplier should be in place.
A monthly report will be produced for Executive by the Procurement Officer
highlighting expenditure levels and identifying trends.
Settlement
Company Barclaycard purchasing transactions are settled with a single monthly
payment collected by direct debit.
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Retention of Forms
The Card Acceptance Form (CCA1), New Cardholder Request Form (CCR1),
Application to Remove Card from Finance (ACC1) and Credit Card Limit Increase
Request (CCL1) will be retained by Finance for three years.
4.7
Tendering and quotations
General
In order to demonstrate that the College receives value for money then all staff
involved in the ordering and purchasing process will follow the procedure below.
This procedure gives limits for when quotations and tenders need to be received.
These limits relate to the project or service being undertaken and in no
circumstances should there be any attempt to “split orders” etc. in order to
circumvent these limits.
Quotations
The CLT member responsible should ensure that before orders are placed for goods
or services (which are not part of a normal complete periodic competitive tender
process - e.g. audit services, security, cleaning etc) where the total estimated cost
(inc VAT) is over £10,000, 3 written quotations are obtained.
In most cases it is expected that the lowest quotation will be accepted. Where this is
not the case the CLT member should evidence the reasons why the lowest quotation
was not accepted. Documentation relating to the quotations obtained, and any
reasons for not accepting the lowest quotation, should be retained by the area
concerned for 3 years. In all cases the Procurement Officer must be involved in
purchases over £10,000.
The quotes should be reviewed with the relevant member of the Executive Team
before a final decision is taken as to which quote to accept.
All documentation and quotes should then be forwarded to the Procurement Officer
for three year retention.
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Tendering
The CLT member responsible should ensure that before orders are placed for goods
or services (which are not part of a normal complete periodic competitive tender
process - e.g. audit services, security, cleaning etc) where the total estimated cost
(inc VAT) is over £50,000, that a formal tendering process is undertaken. The formal
tendering process should include:
 A written specification of goods or services.
 The tender is sent out to a number of companies (normally at least 3).
 That sealed bids are received by a set date.
 That all bids are opened at the agreed time in the presence of a member of the
Executive Team
 All bids are evaluated and approved in the presence of a member of the
Executive Team.
 Normally the lowest price will be accepted. Where this is not the case the
reasons for not accepting the lowest price will be formally noted and kept with the
relevant documentation by the Purchasing Officer for at least 3 years.
Select lists
The Estates Manager shall maintain a select list of the College’s approved
contractors. Only suppliers included on the select list will be invited to tender for
Estates work as appropriate. This shall be updated on an ongoing basis with e.g.
details of:
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contractors performance in respect of work awarded
invitations sent to tender for contracts
The select list will be formally reviewed on an annual basis.
At all times suppliers should only be selected after reference to CPC/OGC framework
agreements. All suppliers will be added to the preferred supplier list on the intranet.
Exceptional Circumstances
The above quotations / tendering procedures can be waived or amended only in
exceptional circumstances having first secured the Principal’s written approval.
Where the tendering process is waived or amended then the Principal will inform the
Policy and Resources Committee of this at the next meeting.
4.8
EU regulations
EU procurement regulations apply to written contracts for all forms of procurement
or hire throughout the EU for a total value exceeding a certain amount. In order to
comply with EU regulations institutions must ensure that the contract is advertised
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in the Official Journal of the EU (OJEU). The current limits (before VAT) from 1
January 2012 are:
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Supply and service contracts (£173,934)
Works contracts (£4,348,350)
Any CLT member who may have procurement contracts at levels close to these
amounts should contact the Director of Finance before any tendering process begins.
Forms relevant to this Section:
Name of Form
Card Acceptance Form (including terms and
conditions) (CCA1)
Expenditure Log for Cardholders
New Cardholder Request Form (CCR1)
Application to Remove Card from Finance
(ACC1)
Credit Card Limit Increase Request (CCL1)
IT Equipment Request Form
Furniture Request Form
Dept. Owner
Finance
Latest Version
May 2012
Finance
Finance
Finance
May 2012
May 2012
May 2012
Finance
Finance
Finance
May 2012
October 2012
November
2012
September
2012
New Supplier Request Form
Finance
Best Practice Notes:
Name of Best Practice Notes
Purchase Order Processing
Generating Fixed Asset Job Codes
Dept. Owner
Finance
Finance
Other Associated Policies, Procedures or Guidance:
Name of Document
Dept. Owner
Hints and Tips for Cardholders
Finance
Purchasing Card Payment Record (Excel file)
Finance
Laptop and Mobile Device Policy
Computer
Services
IT Equipment Procurement Process
Finance
Latest Version
TBC
TBC
Latest Version
Nov 2012
May 2012
October 2012
Furniture Procurement Process
Finance
Voucher Guidelines
Finance
November
2012
November
2012
May 2012
Section Owner:
Name (Position)
Deputy Director of Finance
Dept.
Finance
Latest Version
January 2013
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