At Georgia Tech, almost everyone, from research faculty to student employees, at some point will have to buy with Georgia Tech funds.
At Georgia Tech, almost everyone, from research faculty to student employees, at some point will have to buy with Georgia Tech funds. Although funding sources may vary (this is a story for another day), as a state agency Georgia Tech must comply with state procurement rules, including procuring and documenting approval to make purchases. This is an important part of being a responsible steward of taxpayer resources. But if you spend any time reading about these rules and regulations, you quickly learn to appreciate the complexity of seemingly simple purchases.
To help us understand the basics of buying at Georgia Tech, I had the opportunity to interview Ajay Patel, who was recently appointed interim senior director of Business Services at Georgia Tech.
Can you give us an overview of what the Purchasing department’s responsibilities are at Georgia Tech?
We are responsible for the actual processing of a purchase as well as payment to the supplier – both via PCard and purchase orders generated through Workday. This applies to all purchases except capital and public works as well as to subawards and subagreement. Those are administered respectively by Infrastructure and Sustainability and by the Office of Sponsored Programs. On average, our department issues more than 100,000 purchase orders a year and that number continues to grow.
Who established the rules and regulations for making purchases?
Because we are a state entity, the Georgia Department of Administrative Services gives Georgia Tech the authority to purchase on behalf of the state. In addition, because Georgia Tech receives substantial funding from the federal government, we often have to comply both state and federal procurement rules. This can be complicated, especially when new rules and regulations become part of the process.
I want to emphasize that these are not “guidelines,” they are state or federal laws. All higher education institutions receiving federal funding must comply with federal rules. In addition, all University System of Georgia (USG) schools must also comply with state policies, which are often more stringent than federal rules. To help ensure compliance, there are established purchasing requirements that every USG institution must follow.
Can you guide us through the steps necessary to purchase products and services?
In general, there are two ways to authorize and pay for products and services. One is the State of Georgia PCard, which is primarily used for smaller dollar amounts of purchases, and the other is a purchase order (PO) issued by Workday Financials. Both require documentation for verification of compliance.
By issuing the PO, Georgia Tech assures the vendor that the appropriate authorization, or approval, has been issued and Georgia Tech is financially committed to paying the vendor in exchange for the goods and services specified in the PO. that. This is essentially a contract. In addition, State Accounting Office policy requires that a PO must be issued in most cases before a vendor can be paid.
What does the PO issuance process look like? How long is it?
It starts with the issuance of the purchase requisition. After it is approved by the Labor Day approval department, it will be taken to Purchase for review and approval. Once approved, the purchase requisition will be PO.
In approximately 80% of the cases, Purchase automated the purchase request approval process, and it really helped speed up the process for issuing the PO. On average, automatic approvals of a request take three business days. A good example of this is buying office equipment from the Staples catalog.
For the remaining 20% of requests, Purchase will review them for compliance with state and federal procurement rules. Once all requirements are met, a PO will be issued and sent directly to the vendor. The time for the Purchase to review may vary depending on the complexity of the purchase and the steps required.
What happens if a complete purchase order is not issued and a purchase is made or work begins?
At that point, there was no PO and it was an unauthorized purchase, which by now is one of our biggest Purchase issues. This opens the door for the difference between what the supplier offers and what is expected, and it creates a non -compliant purchase, which is against established rules and laws. Not only does this greatly delay the payment of invoices, but it can cause potentially no payment to the vendor. In some extreme cases, the person who made the unauthorized purchase may be personally liable for the cost of the unauthorized purchase.
What are the new procedural changes that will help ensure subsequent purchases and streamline the processing of purchases and payments?
We strive to be good business partners with our internal jurisdictions and our external vendors, but we also recognize the need to implement more stringent protocols. Beginning this calendar year, Georgia Tech Purchasing has implemented the Unauthorized Purchase Form to further support the policy (i.e., prior approval is required) and ensure regulatory compliance as well as appropriate processing of payment. This states that any unauthorized purchase will require a completed and signed Unauthorized Purchase Form attached to the request before a PO can be issued. The following additional approvals are required:
- Purchase amounts less than $ 25,000-Chairman/Director’s signature approval required.
- Purchase amounts equal to or greater than $ 25,000-VP/Dean signature approval required.
All applicable procurement requirements (such as EVerify, Certificate of Insurance, bidding, etc.) are required for purchases new in payment, which always happens.
And as a reminder, if a purchase does not comply with the state’s purchase terms and requirements, the person authorizing the purchase may be personally financially responsible for the purchase. Again, this has been the rule all along. I encourage employees to visit the Policy Library to learn more about unauthorized purchases.
Are there exceptions, such as emergency purchases? What do those methods look like?
Georgia policy allows for emergencies – one of the few cases where it is acceptable to allow work without a PO. These are common issues that directly affect health and safety. The state clearly states that loss of funding or lack of planning is not an emergency. There is a form that must be submitted to the Department of Administrative Services within five business days of purchase.
What advice would you give to the campus community when buying?
Plan ahead and work with your business officer if you need help navigating the process. If you know you’ll need to order certain products or secure services, don’t wait until the last minute. The procurement process can be complicated and takes some time depending on the type of your purchase. People are often surprised here – that’s when we see people working on the process and its consequences.
How can I learn more about the buying process at Georgia Tech?
New and current employees should visit the course catalog, which features a variety of recruitment -related training and other financial activities. Questions can also be submitted through ServiceNow.