I.  GENERAL PURCHASING and ACCOUNTS PAYABLE POLICIES and GUIDELINES

These policies and procedures for The University purchasing and payments processes, as detailed in this guide, are based on The University of Iowa Operations Manual, Part V. Administration, Finance, & Facilities, Chapter 11.

A.  The Purchasing Department

The Purchasing Department administers the procurement of goods and services for all University departments by the authority delegated through the President by the State Board of Regents. The Director of Purchasing is vested with sole authority to obligate University funds, while ensuring adherence to the statutes and administrative rules of the State of Iowa and the policies and procedures of the State Board of Regents.

The Purchasing Department follows the Code of Ethics of the National Association of Educational Buyers (NAEB), the association serving the purchasing and materials management professionals of higher education and not-for-profit health care organizations. See Appendix I for NAEB Code of Ethics

B.  The Accounts Payable Department

The Accounts Payable and Travel Department is responsible for auditing and processing accurate and timely payments to vendors and individuals. Transactions include vendor invoices, individual reimbursement, freight, Purchasing Cards, prepayments, meeting registrations, plus travel expenses and advances. Checks are written and mailed daily. Accounts Payable staff works directly with departments and vendors to ensure proper policies and procedures are followed. The payment process involves application of credit memos, reviewing vendor statements, resolving discrepancies, depositing refund checks, and providing customer service. Accounts Payable maintains records of all checks and vouchers.

C.  Responsibility for Obtaining Pre-Approvals and Signatures

A minimum of two electronic signatures on Purchase Requisitions (PReqs) transactions is required at the departmental level. This would include the Initiator of the requisition and one other person, perhaps the department head or other administrator authorized to sign. The Workflow Systems tracks the creator and editors of the document.

Departments are responsible for obtaining all required approvals in Workflow before routing Requisitions to Purchasing.
Requisitions and Vouchers without the proper approvals will be returned to the issuing department. The department signature or on-line approval signifies that the department has reviewed the charges and that they are accurate and appropriate.

D. Responsibility for Validating Master File Keys (MFKs)

The department is responsible for submitting the correct MFK for purchases and payments of goods and services. Requisitions and Vouchers received without an MFK or with an invalid MFK will be returned to the Requester for correction.
In order for an MFK to be valid, all eleven elements must be established on the General Ledger M chart of values, and it must meet certain element combination requirements. For more information regarding MFK validation or establishing a new MFK, call your Organizational Unit Contact person or contact Accounting Services at 5-0062.

E. Tax Exemption

The University of Iowa is exempt from paying Sales or Use Taxes in the State of Iowa and for goods shipped to Iowa from other states. The University is liable for Sales and Use Taxes on goods or services consumed in most other states. See U of I’s General Counsel’s website for listing of exceptions.

Also See: Iowa Sales and Use Tax Certificate which you may copy, complete and send to any new vendors, or send at their request.

F. Customs and Foreign Orders

When ordering scientific instruments, educational or other goods from foreign countries, Departments must apply for duty-free entry into the United States. For information on how to apply for duty-free entry, contact the broker below.

Make a note on your Requisition for foreign vendors to use one of the following brokers for Customs clearance.

Contact Sherri Dusenbery or 335-1207 for further information or questions.

G. Gratuities, Conflict of Interest and Federal Anti-Kickback Legislation

By law University employees are prohibited from receiving any gift, token, membership, gratuity or service from a vendor, as related to any purchase made on behalf of The University of Iowa. Immediately notify your supervisor(s), The University’s Internal Auditor, or the Office of the State Auditor if you become aware of any state employee or vendor involved in the purchase or bid process accepting or offering a kickback, gift, token, membership, gratuity or service of any kind that might compromise the buyer-vendor relationship. (See Appendix H for further reference information.)

Iowa Code 68B.3: When public bids required -- disclosure of income from other sales.

An official, a state employee, a member of the general assembly, or a legislative employee shall not sell, in any one occurrence, any goods or services having a value in excess of two thousand dollars to any state agency unless the sale is made pursuant to an award or contract let after public notice and competitive bidding. This subsection shall not apply to the publication of resolutions, advertisements, or other legal propositions or notices in newspapers designated pursuant to law for the publication of legal propositions or notices and for which rates are fixed pursuant to law. This subsection shall also not apply to sales of services by persons subject to the requirements of this section to state executive branch agencies or subunits of departments or independent agencies as defined under section 7E.4 that are not the subunit of the department or independent agency in which the person serves or is employed or are not a subunit of a department or independent agency with which the person has substantial and regular contact as part of the person's duties.

For purposes of this section, "services" does not include instruction at an accredited education institution if the person providing the instruction meets the minimum education and licensing requirements established for instructors at the education institution.

An official or member of the general assembly who sells goods or services to a political subdivision of the state shall disclose whether income has been received from commissions from the sales in the manner provided under section 68B.35.

H. Prohibition on use of Purchasing or Payment Procedures for Personal Purposes

The personal use of the purchasing or payment process is prohibited by law and can result in discipline, up to and including dismissal from employment.

I. The Vendor Database

The University of Iowa maintains a database of all vendors and individuals receiving orders or payments.

Data is provided by vendors and individuals who fill out a Vendor Application (VAF) with their Tax Identification Number (TIN). A TIN is either the Federal Employer Identification Number (FEIN) or Social Security Number (SSN). This information is needed due to IRS reporting requirements.

Vendors are also asked to include additional information on the VAF for other governmental reporting purposes, or to help Purchasing better serve the departments and vendors. This information includes whether they are a Small Business or Targeted Small Business, what commodities they sell, their organization and business type, and their phone and fax numbers.

U of I employees receiving reimbursements do not fill out this form. However, all vendors and non-employees should fill out a VAF if located within a 50-mile radius of Iowa City. This step helps manage Conflict of Interest situations.

Before an order can be placed or payment made, the VAF must be received by Purchasing and entered into the Vendor Database.

If a vendor is not in the Vendor Database, the Requester should email, fax or mail a Vendor Application Form to the new vendor or individual (non-employee) receiving a payment. Link:  Vendor Application Form on the Web

Reasons for vendor application requirements:

• University of Iowa business policy
• Additional vendor information such as EDI, phone/fax numbers and commodity information is maintained.
• TSB (Targeted Small Business) reporting requirements.
• Local vendors are reviewed for possible Conflict of Interest situations. Link:  Vendors.
• SBA (Small Business Administration) information is maintained in vendor database.  Link: www.ccr.gov/

  J. PReqs

When preparing a requisition that is going to an outside vendor, users will use the Purchase Requisitions Application (PReqs) on the FUS Self Service page at https://hris.uiowa.edu/portal/ under Purchase Requisitions Production. This application includes a vendor search which allows users to look up vendors or names to find the vendor number, order address, phone and fax numbers.

1. PReq Vendor Search Tips:

• In searching for vendors remember “Less is Best” and yields more results. Address searches will not be found unless a direct match to the system. Tip: When searching for addresses, leave off Road/Rd, Street/St, Avenue/Ave, Suite/Ste etc. Doing this should produce more match results.
• Remember to search for DBA’s in the Address field.
• Initiators can expedite the PReq process by researching vendor prior to creating the PReq. If the potential vendor is not in the vendor database, the initiator can click on Vendor Application form link within PReqs.
  • Fill out the cover sheet.
  • On the Vendor Application Form by U of I Vendor number field enter or handwrite “PReqs”.
  • At the bottom of this form within Office Use Only
    • Requester field – enter the Initiator/Requester name.
    • Requester address field – enter Initiator/Requester phone number.
    • Date Sent field – enter the date you faxed the Vendor Application to the vendor.

The above information will help the Vendor Team identify why the VAF has arrived Purchasing. Vendor Team will contact the Initiator/Requester with the vendor number after the VAF has been approved on the database.

2. AP/PO Web Pages

Users may look up vendor information using the AP/PO Web pages to find the vendor number, order address, phone and fax numbers. This is accessed via the self-service portal at: https://hris.uiowa.edu/portal/.

Caution: Searches from the AP/PO Web site will display unapproved and Inactive vendors as well as approved vendors. Because of this, we recommend you use the PReq vendor search.

If you need assistance, contact the vendor team. Email: purchasing-vendor@uiowa.edu.

Tip: The Class R, E and A on the AP-PO web site refer to a classification field in the Purchasing and Payables System.

• R represents Supplier
• E represents Employee/Student
• A represents Attorney

The “*” before the vendor’s name means Inactive vendor.

Vendor Name Change – for individuals, excluding UI employees or students. To change the name of an individual already in the Vendor database, you must complete and sign the top half of the Request for Change of Name form and forward to Purchasing Vendor Team.

Contact any Vendor Database team member for assistance and any questions or help you may need.

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