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SUBSECTION 2.2.3.2
GOODS AND SERVICES EXPENDITURES

2.2.3.2.1

General

Effective Date:

Sept. 1, 1998
 

It is the responsibility of the agency head, or authorized designee, to certify that all expenditures/ expenses and disbursements are proper and correct. Agencies are responsible for processing payments to authorized vendors, contractors, and others providing goods and services to the agency. Agencies are to establish and implement procedures following generally accepted accounting principles. At a minimum, agencies are also to establish and implement the following:

2.2.3.2.1..a

Controls to ensure that all expenditures/expenses and disbursements are for lawful and proper purposes and recorded in a timely manner (refer to Section 6.2.2 of this manual for guidance related to internal control procedures);

2.2.3.2.1..b

Procedures to ensure prompt and accurate payment of authorized obligations; and

2.2.3.2.1..c

Procedures to control cash disbursements.

2.2.3.2.2

Payment Authorization

Effective Date:

Sept. 1, 1998

2.2.3.2.2..a

Goods and services are not to be ordered or paid for unless they are provided by authorized vendors and within the limitations prescribed by:
 
  • the Department of General Administration pursuant to RCW 43.19.19, or
 
  • other statute.

2.2.3.2.2..b

Prior to payment authorization, agencies are to verify that the goods and services received comply with the specifications indicated on the purchase documents. Authorized personnel receiving the goods and services are to indicate the actual quantities received. (Refer to Section 6.2.2 of this manual for guidance related to internal control procedures.)

2.2.3.2.2..c

Agency heads or authorized designees are responsible for authorizing all expenditures/expenses.

2.2.3.2.3

Processing Payments

Effective Date:

Sept. 1, 1998

2.2.3.2.3.a

At a minimum, payment processing documentation should include evidence of authorization for purchase, receipt of goods or services, and approval for payment. The following documentation, or equivalent, is to be maintained:

2.2.3.2.3.a(1)

Journal Voucher (A7-A) - This form is used for interagency payments between treasury accounts. The Journal Voucher is also used to process electronic funds transfer (EFT) payments to outside vendors, and to allocate or transfer costs between accounts, programs, etc.

2.2.3.2.3.a(2)

Purchase Requisition (A15-A) - A form used by agencies to request the Office of State Procurement, Department of General Administration, to order materials, supplies, and equipment or to request an amendment of a previous requisition. This form is used when an agency does not have general or specific authority to make the purchase or when the item does not fall within the statewide contracts.

2.2.3.2.3.a(3)

Purchase Order (A16, A16-A) - A form issued by the Office of State Procurement, Department of General Administration, to order items approved on a requisition request (A15-A). This form is used by agencies to encumber, liquidate, and authorize payment for such purchase requisition requests.

2.2.3.2.3.a(4)

Declaration of Emergency Purchase (A16-E) - A form used by agencies for emergency purchases made in response to unforeseen circumstances beyond the control of an agency which present a real, immediate, and extreme threat to the proper performance of essential functions and/or may be reasonably expected to result in excessive loss or damage to property, bodily injury, or loss of life.

2.2.3.2.3.a(5)

Field Order (A17-A, A17-1A) - Used by agencies as a local purchase order form to order, encumber, liquidate, and authorize payment for local purchases. This form is used when an agency has general or specific authority to make the purchase or when the item being purchased falls within the statewide contracts.

2.2.3.2.3.a(6)

Receiving Report - Partial Delivery (A18, A18-A) - A form used by agencies to document and authorize payment for partial deliveries of goods or services ordered by a single Purchase Order (A16-A) or Field Order (A17-A).

2.2.3.2.3.a(7)

Invoice Voucher (A19-1A) - A form used by agencies to substantiate and authorize payment when a Purchase Order (A16-A) or Field Order (A17-A) is not involved and where vendor invoices are not employed. The Invoice Voucher is to be signed by the vendor on the space provided.

2.2.3.2.3.a(8)

Voucher Distribution Form (A19-2, A19-2A) - A form used by agencies to substantiate and authorize payment when a Purchase Order (A16-A) or Field Order (A17-A) is not involved but where vendor invoices are employed.

2.2.3.2.3.a(9)

Travel Expense Voucher (A20-A and A20-2A) - Form A20-A is used by agencies to substantiate and/or authorize payment of travel costs for state employees. In the absence of a vendor relationship, this form can also be used to substantiate and/or authorize payment of travel costs for non-state employees such as prospective employees; individuals who serve on boards, commissions, councils, committees, and task forces; volunteers and other individuals who are authorized to receive travel expense reimbursement. When a vendor relationship exists and the A20-A is used by non-state employees to substantiate travel costs, it must be attached to an Invoice Voucher (A19-1) to authorize payment.

Form A20-2A, is only used for reimbursing travel expenses of commission members who are reimbursed on a per diem basis.

2.2.3.2.3.a(10)

Printing Requisition (A21-A) - A form used by agencies to order, encumber, liquidate, and authorize payment for goods and services from the Department of Printing.

2.2.3.2.3.b

Purchasing documents used internally by agencies having local purchasing authorities are to meet the criteria of the forms noted above. There is no standard internal purchase request form, however, agencies are encouraged to develop and utilize an internal request form to enhance internal control over requisitions. (Refer to Section 6.2.2 of this manual for internal control procedures.)

2.2.3.2.3.c

The following information, at a minimum, is to be indicated either on the disbursement documentation or in an automated system for compliance with federal regulatory agencies and internal control policies:
 
  • Payee name and address in compliance with U. S. Postal regulations;
 
  • Unified Business Identifier (or other vendor approved identifier);
 
  • Taxpayer ID Number (TIN) and/or Social Security Number (SSN) as per IRS publication 1220 and IR Bulletin 1990-31, as applicable;
 
  • Voucher number;
 
  • Appropriate account code distribution;
 
  • Receipt dates for goods and services;
 
  • Signature of receiver;
 
  • Receipt date of invoice;
 
  • Invoice number, if available;
 
  • Total amount of invoice;
 
  • Invoice date;
 
  • Discount or other terms; and
 
  • Date of payment.

2.2.3.2.3.d

Agencies are to establish procedures which verify the mathematical accuracy of all documents and ensure that charges are properly recorded to the appropriate accounts.

2.2.3.2.3.e

Disbursement documents are to be audited for the following:
 
  • Quantities indicated on the invoice agree with those documented as received on the receiving report.
 
  • Unit prices on the invoice agree with those indicated on the disbursement document.
 
  • Extensions and footings are correct.
 
  • Written approval by the agency head or authorized designee authorizing payment appears on the disbursement document.
 
  • Correct account code distributions are indicated.
 
  • Interest for late payment, upon billing, is properly documented and computed.

2.2.3.2.3.f

Disbursement documents approved for payment are to be arranged in a batch for warrant and warrant register processing within the following constraints:
 
  • The documents are to be assigned sequential voucher numbers.
 
  • An approved document transmittal is to be prepared.
 
  • A proof total is to be prepared after the documents are batched and is to be attached to the approved document transmittal for all vendor payments. The document transmittal should reflect the total amount of the vouchers.

2.2.3.2.3.g

Encumbered balances associated with any expenditures are to be appropriately liquidated. (Refer to Section 2.2.3.8.2.b for an illustrative entry.)

2.2.3.2.3.h

Balances in GL Code 6505 "Accrued Expenditures/Expenses" associated with any cash expenditure disbursements are to be appropriately reversed.

2.2.3.2.3.i

Agencies are to establish internal control procedures to ensure timely, accurate, and cost effective payment of obligations to vendors. An agency's payments will be considered timely when its records show that the agency pays 95 percent or more of its obligations to vendors by the due date defined below. Agencies are to maximize effective cash management by paying as close to the due date as workable. Special attention is to be given to the following:

2.2.3.2.3.i(1)

Due Dates - Due dates for payments are established by the terms of contracts between the agency and vendors. If the contract is silent concerning terms or there is no written contract, the terms are net 30 days. The 30 days, or other terms, begin upon receipt of the goods or services or a properly completed invoice, whichever is later. Vendor payments are to be made by the due date. As prescribed in RCW 39.76, agencies, if billed, are required to pay interest at the rate of one percent per month on amounts of past due accounts. Due dates are postponed in the case of disputes (refer to Item (5) below).

2.2.3.2.3.i(2)

Discounts - Discounts offered by vendors are considered in evaluating competitive bids; failure to earn such discounts through prompt payment increases the effective price to the state. Agencies are to pay all obligations in time to take advantage of the maximum discounts offered by vendors.

2.2.3.2.3.i(3)

Combined Payments - The number of payments to a vendor are to be kept to a minimum by processing the maximum number of invoices with a single payment.

2.2.3.2.3.i(4)

Partial Payments - When agencies accept partial delivery of goods or services without reservation, prompt payment is to be made for the goods or services received upon receipt from the vendor of a properly completed invoice or in accordance with contract terms covering the partial delivery.

2.2.3.2.3.i(5)

Disputes - Prompt and proper notification to a vendor of receipt of unsatisfactory goods or services or an incorrect invoice defers the due date. The due date is recalculated from the date the problem is resolved. Proper authorization is required when material changes are made.

2.2.3.2.3.i(6)

Petty Cash - Agencies can use petty cash imprest accounts where effective in complying with prompt payment requirements and efficiency of operation can be demonstrated. (Refer to Section 2.2.4.1.5 for petty cash policies and procedures.)

2.2.3.2.3.i(7)

Maintenance Services Contracts - Pursuant to RCW 43.88.160(5), under certain conditions, payments for equipment maintenance services may be made up to three months in advance.

2.2.3.2.3.i(8)

Postage, Books and Periodicals - Pursuant to RCW 42.24.035, agencies may make payment for the costs of postage, books and periodicals in a manner consistent with normal business practices, but in the case of subscriptions, for periods not in excess of three years.

2.2.3.2.4

Rapid Invoice Processing

Effective Date:

Sept. 1, 1998
 

The use of Rapid Invoice Processing (RIP), decentralized confirmation of receipt of goods and services, is encouraged to expedite payments of small and/or routine transactions. With RIP, the receipt and indication of approval of payment are kept at the receiving location. RIP is particularly useful where receiving is decentralized. The level/type of invoices subject to this decentralized confirmation procedure is to be established carefully at the agency level to ensure that a more positive system of control, such as signed receiving reports, exists to cover large or non-routine transactions. Advance written authorization is to be obtained from OFM for the use of RIP.

2.2.3.2.5

Purchase Card

Effective Date:

Sept. 1, 1998
 

State law, RCW 43.19.185 and 28B.10.029, authorizes agencies to use credit cards and similar devices to make purchases under specific terms and conditions. Refer to Section 4.3.12.1.

2.2.3.2.6

Waste Recycling Procedures

Effective Date:

Sept. 1, 1998
 

Agencies are to record receipts and disbursements resulting from agency operated waste reduction and recycling programs not operated through the Department of General Administration as follows:

2.2.3.2.6.a

Revenues derived through an agency operated recycling program are to be deposited into the account that supports the recycling effort as either a miscellaneous revenue or a recovery of expenditures to the extent of expenditures for the program.

2.2.3.2.6.b

When the revenues exceed the expenditures identified with the recycling program, they are to be allocated on a proportional basis to the accounts that originally purchased the recycled materials.
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