anne hall (osc), deborah shoemaker (osc), bhagya ......bhagya kondreddy (sfs) and paul olsen (bsc) 2...
TRANSCRIPT
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Receiving Best Practices
Anne Hall (OSC), Deborah Shoemaker (OSC), Bhagya Kondreddy (SFS) and Paul Olsen (BSC)
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Title 2, Chapter I, Part 6.6 of the New York Code Rules and Regulations
• Requires an agency to maintain adequate internal controls over the voucher process to support the validity of payments made.
– The agency must have policies and procedures in place to obtain reasonable assurance that goods and services are properly received before certifying to the Comptroller claims for payment are appropriate to pay.
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Receiving Roadmap
• Develop written policies to ensure staff consistently perform the receiving function agency-wide.
• Ensure proper segregation of duties between receiving, purchasing and accounts payable.
• Use the purchase order to communicate expectations.
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Receiving Roadmap
• Practice blind-receiving whenever possible.
• Record receiving information timely.
• Statewide Financial System – P2P.
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Develop Written Policies• Proper receiving procedures guard against
inherent risks that an agency may certify claims for payment that include a higher quantity or different quality of goods/and or services than the agency ordered or received.
– Ensure staff have a clear understanding of their responsibilities and access to the proper tools necessary to perform receiving.
• Incorporate these responsibilities into performance expectations.
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Receiving Goods and Services• The agency should ensure purchases for goods
and services are properly received through a process that includes verifying:
– Date of delivery.
– Quantity of goods/services is documented.
– Description of goods/services matches description of goods/services ordered.
– Condition of goods/services received matches quality of goods/services ordered.
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Receiving Goods and Services– Quantity of goods received is recorded,
independent of the quantity ordered (e.g., using the Statewide Financial System (SFS), the agency’s accounting system, or purchase orders without quantities), maintained and transmitted to Accounts Payable.
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Receiving Goods and Services
• Agency specific contract purchases should be reviewed by the program area for compliance with the terms, conditions and specifications of the purchase agreement.
– Program staff should evaluate contractor performance and document, as appropriate, whether the contractor has met the performance objectives specified in the purchase agreement.
• This process should include documenting that the agency has reasonable assurance the services are properly received.
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Separation of Duties
• Agencies should maintain sufficient separation of duties in order to reduce the risk of error or fraud in their purchasing program.
– No one person should control all key aspects of an entire transaction or event.
• Incompatible duties are segregated (e.g., purchasing, receiving, invoice/voucher approval).– Controls are weakened when one person does two or more
aspects .
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Purchase Orders
• Use the purchase order to communicate expectations, such as:
– the quality and quantity of goods and services to be delivered,
– if an inspection will be required.
• A properly created purchase order in the SFS will result in more effective and timely receiving.
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Purchase Orders
– Quantity based lines allows an agency to receive up to the specific quantity and unit price of goods or services at a particular measure.
• More accurate record of goods/services received
• Supports the use of SFS automation
– Amount based lines allows an agency to receive based on the aggregate cost of the goods or services provided.
• Amount only lines should be used when quantity lines would not add value or services are not ordered on a specified unit of measure
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Purchase Orders– A purchase order created as “see attached” results
in a manual payment process, no efficiencies to be gained.
• Establishing lines appropriately on requisitions and contracts will result in greater downstream efficiencies in the procure-to-pay process
• The SFS has an automated matching process and payment tolerances to help ensure an agency is not paying for higher quantity or price than ordered.
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Purchase Orders
• Tolerances are applied during the matching process and allow for slight variations in price between purchase orders and vouchers.
– Quantity based purchase order lines
• invoice/voucher unit price per line item and the PO unit price per line item
– Amount based purchase order lines
• the aggregate line item cost of the invoice/voucher and the aggregate line item cost of the PO
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Purchase Orders
• For more information on Payment Tolerances, refer to the Guide to Financial Operations, Chapter XI, Section A.8
• For more information on Matching, refer to the Guide to Financial Operations, Chapter XII, Section A.8.B
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Purchase Orders
• When an agency purchases goods and services without a purchase order, it hinders the ability to practice blind receiving.
– Receivers that are provided with an invoice or purchase order with the quantities present, may be less inclined to count or keep records of the goods or services received – this is not a proper receiving practice.
• Blind Receiving Report available in SFS
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Blind Receiving
• Is facilitated when the receiver is provided with a purchase order/ordering information that does not include the quantity or amount of the goods/services ordered.
– The receiver must independently verify the quantity of the goods or services received and confirm the quality of the goods or services received matches the description ordered on the purchase order or accompanying bill of lading.
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Acceptance Period
• This law requires the agency to notify the vendor within 15 days (7 days for self-certified small business) of the receipt of an invoice about any defects or improprieties in the delivered goods or invoice.
State Finance Law 179-F
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Receiving vs. Accepting
Receiving
• The act of taking possession of goods.
– A worker on the receiving dock who signs for goods provides the acknowledgment that the goods were delivered and or rejected at delivery not that they were “accepted”.
Accepting
• The act of “testing” what is purchased is in accordance with the purchase agreement.
– The department ensures the delivered goods are free from defects.
• Return to Vendor
• Adjust the MIR Date
– SFS
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Recording Receiving• Receivers should record receiving information
in the SFS or agency’s accounting system at the time the goods or services are delivered.
– If the receiver is unable to record the receipt immediately, it is a best practice to record receipts within one business day after receipt of goods or services.
– Goods should be considered received on the day of delivery and should be recorded within one business day of delivery.
• Entry of the receipt supports delivery and facilitates timely payment.
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Recording Receiving– For services, the receiver should record receiving
information within one business day of the last day of the service period.
• For example, temporary staffing receipts should be recorded at the end of the workweek .
• Inspection results should be recorded in the SFS within one business day of the determination.
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Recording Receiving
• For agency specific contracts, the agency should have a process for tracking and validating vendor performance .
• This process should include documenting that the agency has reasonable assurance the services are properly received.
• For more information on Contract Monitoring, refer to the Guide to Financial Operations, Chapter XI, Section 11.F
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Recording ReceivingAccurate receipt dates ensure proper matching of Receipts to Invoices.
• The receipt date field has been moved to the Receiptentry screen in SFS providing more visibility toreceivers.
• A new SFS role NYF_AGY_PO_RDATE_Required whenassigned to receivers ensures that the receipt dateappears blank so that a true date is captured instead ofthe current date.
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Record Receiving Timely• The agency should ensure vendors provide
enough information on receiving documents, such that, receivers are able to conduct satisfactory physical receiving .
– Packing slips (e.g., bill of lading) contain purchase order number, description ,serial numbers, and/or other identifying information from the purchase order.
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Record Receiving Timely• Timely entry of receipts supports downstream
efficiencies in the procure-to-pay process.
– Reduce late payments and increase discounts.
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Proactive Receiving is Essential
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Key Takeaways
• Receivers should record receiving information in SFS at the time the goods or services are received.
– If the receiver cannot record receiving information at the time goods or services are received, it is best practice to record the receipt within one business day.
• Receivers without access can work with a proxy, who has access to SFS, to enter receipts timely.
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Resources• OSC Guide to Financial Operations (GFO)
– Chapter XI, Section A.9 – Receiving
– Chapter XI, Section A.8 – Payment Tolerances
– Chapter XII, Section 8.B – Matching
– Chapter XI, Section 11.F – Contract Monitoring
• GFO Navigation
– OSC’s Website (https://www.osc.state.ny.us/) State Agencies Find Accounting Policies and Operational Guidance The Guide to Financial Operations
• SFS Coach
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Contact Us• Anne Hall, State Program Examiner II, OSC
• Statewide Financial System Help Desk
– (518) 457-7737 or (877) 737-4185
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Questions