Why focus on procurement?

1. Why focus on procurement? Donna Sandoval, CGFM April 11, 2018

2. About our group at this presentation • My current position and experience with Procurement • What is your position? • What is your experience with Procurement?

3. What about Procurement? • Beginning of any financial transaction • Establishing an encumbrance to commit your budget to prevent overspending • First step of accuracy in financial reporting • If you get it right you can evaluate financial status and make management decisions

4. Best Practices Procurement Code - Arizona Procurement Code included in the Arizona Revised Statute (ARS) 41-2501 Purpose of this act is to: Simplify, clarify and modernize Continued development of procurement policies and practices Consistency Increased public confidence Ensure the fair and equitable treatment Provide increased economy Foster effective broad-based competition Provide safeguards

5. More about procurement code • Arizona State Procurement Office • University of Arizona • ABOR Arizona Board of Regents Procurement Code applies to Arizona’s Public Universities • Pima County Procurement Code • Tucson Procurement Code

6. Certified Procurement Officer (CPO) • A CPO must have the necessary experience, training and qualifications to commit funds for procurements on behalf of your governmental entity. • Do you have a CPO?

7. Do you have procurement policies? • Processes to ensure you comply with the Code • Purpose: • Comply with federal and state laws, rules and regulations • To ensure timely and accurate purchasing practices • Scope: Who does this apply to? • All department or university employees involved in procurement • Reviewing and Update annually to incorporate new requirements or address findings or problem areas

8. Example: 2016 Finding – Unrecorded Accounts Payable • A form, Internal Purchase Requisition (IPR) or Contract Request Form • Mechanism to request purchases – field offices or departments • Using the accounting system, it will record approvals and provides workflow • Provide training for staff of how to enter requisitions Corrective Action Plan

9. What do requesters have to submit? • Approval • by a manager or director that is knowledgeable about the good or service • Identify the funding source • Budget planning or a spending plan – How does this fit? • Quote(s)

10. How do we choose?

11. Tracking requisitions • A packet with IPR, quote(s) and approval • Date stamp, log-in and place in the basket • Entry into the accounting system by someone other than an accounts payable staff • Do you use the accounting system?

12. Approval levels • Level 1 – Supervisor • Level 2 – CFO or CPO • Review and conversion to PO by purchasing staff (emails go out every morning what you have in your que for approval)

13. Review of encumbrances • Quarterly more often monthly at year-end (increase or decrease of encumbrance) • Beginning of FY process • Rules on encumbrances • Un-planned or special requests

15. Accounts Payable Functions • Matching of invoices and POs • Errors in invoice or POs? • Make corrections

16. Financial Reporting • If payments are correct our financial status reports will be correct • Including budget projections, expense to revenue, federal financial reports

17. Year-End Processes • Calculation of accruals • You could use balances on POs • Include all amounts, communicate with your program or service managers • Reconcile and review • What happens if liabilities are not included in accruals?

18. In Summary • Know the rules • Put policies or procedures into place • Update policies or procedures as needed • Training for staff • Address problems or obstacles • It is a work-in-process as rules change or staff changes

19. Donna SandovalDonna.Sandoval@state.nm.us