Blanket Orders

Blanket Order encumbrances will not be included in the year end balance and carried forward to the new fiscal year. For example, if a PO has $1000 remaining at the end of the year, it will not be used in calculating closing balance of the account. Nor will the $1000 carry forward in the balance forward amount at the beginning of the fiscal year. It will however, be the amount encumbered on the July statement.

The Purchasing Department has created the following reports to assist departments with tracking spend on blanket orders. Due to the upgrade and conversion of POs, two reports are now necessary. One will remain static, and show all dollars spent prior to the conversion. A new report will show spend starting in 2006. Departments may need to check both reports to find total spend on a given PO.

THIS INFOMATION IS IN THE PROCESS OF BEING UPDATED

Please note the following:

• The reports may take a minute or two to load. Please be patient.
• Each report will be in Excel format. Follow the instructions on the page to find your department’s POs. Then export the report into Excel, again following the instructions on the web page, and you will then be able to view, modify and otherwise work with the data.
• Some departments or individuals may not have the ability to view this report due to security settings on their computers. If you cannot see the page after clicking the above links, please send an email with your department number to Julie Bergeon, and an email will be sent containing your department’s data. Please specify which report is needed.
  
• Blanket Order FAQ's
• Helpful Hints
• Blanket Order Policy

Blanket Order FAQ's

Accounts Payable and Purchasing will be upgrading our current system to a new internet version. In addition, Accounting Services is implementing new general ledger software. One of the changes that have become evident is that we will no longer be able to prevent certain types of purchase orders from encumbering. In today’s system, we do not encumber funds for maintenance contracts, blanket orders issued from RFQ/RFP’s, and standing blanket orders.  These types of purchase orders will be encumbered.

We believe this is a work in progress and there are so many different scenarios that we are running into that will take all of us some time to get use to. We may come up with a better way to do this, once we get into the new version of the software. The most important issue is that the PO is issued for the correct amount and that your statements are accurate.

We will be revising our blanket order policy and sending it out to campus soon.

1. Can Blanket Orders be for less than $3000?
   Blanket orders must be equal to or greater than $3001 or more and approved by Purchasing. Price agreements, contracts and negotiated pricing will be obtained by the Purchasing Agents. Exceptions to the $3000 will be made by the Purchasing Agents. Blanket orders less than $3001 are not routed to Purchasing Agents.

2. What happens when the encumbered amt is gone? Do we request it be added to or do we have to get another new PO#?
   You can add money through out the year by contacting Purchasing.

3. Are we notified somehow if the PO is getting close to running out of funds?
   We will be watching these orders in Purchasing and adjusting the first of the fiscal year so that we can ensure that the PO does not close. We also plan to provide these blanket order reports to departments quarterly for review.

4. What happens to any leftover monies at the end of the fiscal year?
   We are still working on the year end procedures for blankets. Its more likely that we will drop the blanket order encumbrances for the balance forwards, given they are not true encumbrances. Once we determine this exact process, we will update campus.

5. When a blanket "runs out of money" and we contact purchasing to add more, what increments are they looking for? $500, $1000, $3000? At the end of the FY, after we have been adding to a blanket, will we need to get a new number next July 1, 2006 or can we add to it indefinitely?
   The amounts do not need to be in increments of $500, $1000. Work together with the Purchasing Agent and discuss what amount is needed.

   All Blanket orders, not supported by a price contract/agreement will be reviewed by the Purchasing Agent to determine whether the blanket PO should be closed, reissued or bid. The Purchasing Agent will review campus wide spending for like items on blankets.

6. I'm not sure what type BOQ or MCT (maintenance contract?) is, but what do we do with those? I understand they will carry over, but do we put a $ amount we want encumbered?
   MCT is maintenance contract. BOQ is a blanket with a contract attached. Yes you need to put an amount that you want encumbered.

7. The ones that will carry over because of amount spent and less than 2 years old, do we only have the amount left from the original blanket request less the amount already spent or can we encumber any amount we feel necessary to cover next FY?
   The amount should be what you feel necessary to cover the next FY.
8. What happens if a department doesn’t get their Blanket Order report in?
   Purchasing will close all the orders that should be closed and the ones that are open will go forward with an incorrect encumbrance.

Helpful Hints

• Blanket Orders for standing orders (PO Type BLK), contracted pricing (PO Type BOQ) and maintenance contracts (PO Type MCT) will be encumbered FY06.
• Blanket Orders (PO Type BLK) with an annual spend of less than $3000, over 2 years old and/or issued to a vendor that is inactive will be closed by Purchasing. Invoices dated prior to July 1st will still be paid against these PO's in July. Departments will need to complete a PReq to create a new PO if they wish to continue these orders. The dollar amount on the PReq should equal the amount to be encumbered in FY06. We encourage the departments to utilize the procurement card, eVoucher or PReq procurement tools.
• ALL Blanket orders with PO Types BOQ and MCT as well as BLK under 2 years old will be moved forward to FY06 with the amount the departments provided purchasing on their departmental Blanket Order reports. These orders will be recreated by Purchasing with a replacement purchase order number that begins with "0" in place of the current "4". All other numbers of the order will remain the same. For example: “4000023149” will be replaced with “0000023149”. Purchasing has chosen this method so that the vendors can continue to use the same PO number for billing purposes. It also enables Accounts Payable's invoice processors to easily process your invoices without having to research the system for a new PO number.
• Minimum Requirements for a Blanket Order
  • Twelve vouchers/invoices or
  • $3,001 per year minimum
  • 12 month period
  • One MFK
  • Give estimated annual usage
• Disadvantages
  • Purchases cannot be tracked
  • Loss of accountability
  • Could be paying higher prices on goods/services that the University may have a contract for
    

If you have any questions contact the Purchasing Agent, Debby Zumbach at deborah-zumbach@uiowa.edu or Chris Leichty at chris-leichty@uiowa.edu.