HomeMy Public PortalAbout412.2 - Business and Financial Services - Accounting & Control Division - Accounts PayableManagement, Budget & Accounting Department
Accounting & Control Bureau Section 412.2
Policy and Procedures Manual Page 1
412.2 SUBJECT: ACCOUNTS PAYABLE
:1 OBJECTIVE:
To provide policies and procedure for the processing and payment for all
goods/services rendered to the City and to provide a uniform procedure for the
determination of proper invoicing and provide a procedure through which disputes
regarding invoices may be resolved.
:2 AUTHORITY:
This procedure amended by City Council September 15, 2003.
:3 DIRECTION:
Manaement, Budget & Accounting Director, as an appointed official, serves at the
pleasure of the Mayor.
:4 METHOD OF OPERATION:
A. Processing of Transactions by Type
1. The primary function of the Accounts Payable Section of Accounting
Operations is the proper and timely payment of all fiscal obligations
of the City. These obligations involve the following types:
a. All transactions initiated through and encumbered within the
Purchasing sub-system of OMIS (Operating Management
Information System) through either:
(1) Purchase Orders (PO)
(2) Contract orders (CO)
(3) Annual Contract Releases (CR)
(4) Field Purchase Orders (FPO)
Invoice must be forwarded for payment no later than 21 days
from the invoice date, provided goods/services have been
received and accepted. Program Managers must process
payment authorization in the system in order to relieve the
encumbrance and to facilitate matching POs, COs, CRs and
FPOs against vendor invoices and to verify that pricing and
shipping terms have been met.
After Program Managers "receive" goods/service through the
OMIS interactive Purchasing screens, the original invoice(s)
must be forwarded to Accounting (unless previously held in
Accounting -then return a legible copy) with appropriate
purchasing document with the following notations:
ACCOUNTS PAYABLE
Document Notation
* PO - word "entered" and PO # on Invoice.
Management, Budget & Accounting Department
Accounting & Control Bureau Section 412.2
Policy and Procedures Manual Page 2
* CO - Contract Payment Form with supporting
documentation, invoice or application for
payment documentation.
* CR - Invoice marked with system Release #
& Vendor #
* FPO- Invoice and copy of FPO with either the
Vendor #, or TIN and business type written on
Invoice.
b. A completed Check Request Memo Form must be submitted
to Accounting in order to pay for goods/services/mer-
chandise that were purchased outside the Purchasing sub-
system of OMIS. It must be signed by an individual
authorized to approve invoices/check requests and a letter of
authorization signed by the Department Head/Bureau Chief
must be on file in Accounting.
Procurement of goods/services/merchandise outside the
Purchasing system are limited to specified purchase types.
The list of authorized purchase types may be obtained from
Accounting. Any exceptions to the approved list requires
justification and must be forwarded to the Chief
Administrative Officer for approval of exception prior to
submission to Accounting for payment.
c. Credit Memorandums are to be submitted to Accounts
Payable with the appropriate charge code and/or original
invoice number for entry into the system for credit against the
next payment to vendor. (Do not enter into system or subtract
from any other invoice payment). Credits must be entered by
Accounts Payable only.
d. Petty Cash is authorized to certain departments/bureaus to
directly pay for inexpensive items, generally not to exceed
$25, which are needed immediately and for which issuance of
a special check or processing through the purchasing system
is not cost effective or otherwise feasible. All requests for a
new Petty Cash account must be submitted by the
Department/Bureau Chief to the Manaement, Budget &
Accounting Director in memo form with sufficient
justification to enable a reasonable review/decision. The
authorized signatory for a petty cash fund is required to
promptly notify Accounting whenever there is a change in
either the authorizing signatory or custodian of the fund and
an updated petty cash account form must be completed and
submitted to theManagement, Budget & Accounting Director.
Management, Budget & Accounting Department
Accounting & Control Bureau Section 412.2
Policy and Procedures Manual Page 3
All Petty Cash must be kept in a locked box or secured area.
In addition, the total of each Petty Cash fund should equal
receipts and cash in the box. Proper documentation should be
obtained for every disbursement, including advances to
employees for City purchases. All receipts should be stamped
or hand-cancelled when reimbursed from Petty Cash.
Authorized signatories should not allow any co-mingling of
petty cash funds with other City or personal funds.
Replenishment of cash will be made upon receipt of the
Replenishment of Petty Cash Form. Original cancelled
invoices/receipts must be submitted along with a complete
description of items(s) purchased. Purchase of items which
should have been purchased through the purchasing system
such as office supplies and other items which are on annual
contract, must be justified.
The City of Orlando is exempt from Florida Sales Tax. A
sales tax exemption form is available in Accounting, and the
purchaser is responsible for making an attempt to use the
exemption to avoid paying sales tax. If the retailer refuses to
honor the form, the purchaser must so state on the receipt in
order to be reimbursed for the sales tax.
e. Emergency Checks - If a check is required before the regular
check printing day (Wednesday) an Emergency Check
Request Form must be completed and hand carried to
Accounting to arrive by 10 a.m. This request must include all
documentation and system transactions described above must
be completed. All requests received by 10 a.m. will be ready
for pick up by 3 p.m. the same day. Due to the internal
controls required and associated manpower implications to
disburse City funds, it is important to limit emergencies.
Therefore, each request must include an explanation as to
why the request was not processed in time to meet the normal
processing and the possible impact if a check is not issued
immediately. Emergency checks are not mailed and must be
picked up on the date of issuance, preferably by the vendor.
The requesting department/bureau may pick up the check on
an exception basis.
B. Check Processing
1. Disbursement Checks are printed each Wednesday afternoon and
released to Accounting for final review/verification, and processing
Management, Budget & Accounting Department
Accounting & Control Bureau Section 412.2
Policy and Procedures Manual Page 4
prior to release/mailing checks on Thursday afternoon by 2 p.m. The
checks released at this time will provide payment to vendors for all
invoices which were properly processed and received in Accounting
prior to the Monday noon deadline.
In order to maintain proper internal control, checks will be
released/mailed by Accounting. Checks which are not mailed must
be signed for by authorized personnel after presenting proper
identification; e.g., letter on file from the company, employee I.D.
etc.
2. Checks to be cancelled must be hand carried to Accounting with a
memorandum stating reason for cancellation. If "stop" payment is
needed, immediately call Accounting, giving check #, payee, date,
amount and reason for stop, followed by a confirming written request
to stop payment.
C. Prompt Payment
1. General Information
In 1989, the Florida Legislature passed the "Florida Prompt Payment
Act" which required local government agencies to formally adopt
definitions and procedures to ensure the timely payment of invoices, and
provide a mechanism by which to resolve disputes which may arise out of
invoices. The Legislature also set out penalties for tardy payments
amounting to at least 1% simple interest per month with a maximum cap of
12%. The following procedures have been established to ensure prompt
payment and resolve disputes:
2. Determination of Proper Invoice
For purposes of billing submission and payment procedures, a
"proper invoice" by a contractor, vendor, or other invoicing party
shall consist of at least all of the following:
a. A description, including quantity, of the goods and/or
services provided to the City, or a party on behalf of the City
which shall be reasonably sufficient for purposes of
identification.
b. The amount due, applicable discount(s), and the terms
thereof.
c. The full name of the vendor, contractor or other party who is
supplying the goods and/or services including a mailing
address in case of a dispute and a mailing address for
payment purposes (if they are different), and a telephone
number.
Management, Budget & Accounting Department
Accounting & Control Bureau Section 412.2
Policy and Procedures Manual Page 5
d. The Purchase Order or Contract Number as supplied by the
City.
e. An identification by Bureau, Office, or Department of the
party(ies) to whom the goods were delivered or services
provided.
f. Invoices for purchases by the City Purchasing Office should
be delivered to:
Accounts Payable, City of Orlando
400 South Orange Avenue
Orlando FL 32801
g. Invoices for purchases by the Public Works Department
should be delivered to:
Director of Public Works, City of Orlando
400 South Orange Avenue
Orlando FL 32801
h. Invoices for purchases made by other City departments,
offices or bureaus for goods and services obtained outside the
purchasing system and to be paid by check request should be
delivered to:
The Department, Office or Bureau,
City of Orlando
400 South Orange Avenue
Orlando FL 32801
i. To be considered a proper invoice, it must be based on a
proper delivery, installation, and acceptance by the City or a
party thereof.
j. The vendor, contractor, or other party who is supplying the
goods and/or services must have complied with all of the
contract terms and conditions and may not be in default of
any of them.
k. Should the contract require any subcontractors or other
parties to be bound by similar or other "flow-down"
requirements, those requirements must have been complied
with.
3. Dispute Resolution
a. In the event a dispute occurs between a contractor, vendor, or
other invoicing party and the City concerning payment of an
invoice, the City department, office, or bureau which has the
Management, Budget & Accounting Department
Accounting & Control Bureau Section 412.2
Policy and Procedures Manual Page 6
dispute, along with a representative of Purchasing and
Materials Management (if procured through said Office), and
the invoicing party shall meet to consider the disputed issues.
Any such procedure shall be initiated by either party
notifying the other in writing of a dispute, and stating with
specificity, its nature. This procedure shall commence not
later than forty-five (45) days after the date on which the
proper invoice was received by the City, and be resolved not
later than sixty (60) days after the date on which the "proper
invoice", as defined in 412.4:4B, was received by the City.
b. The invoicing party shall provide to the City such material
and information as the City may reasonably require to resolve
the dispute.
c. Any decision by the Purchasing Agent, Department Director,
Office Head, or Bureau Chief shall constitute the final
decision of the City regarding the dispute and shall be
communicated in writing to the invoicing party within three
business days after such decision.
d. If no decision is rendered within the time period as set out
above, a decision against the invoicing party shall be deemed
to have been issued.
:5 FORMS:
Contract Payment Form; Signature Authorization Form; Check Request Form;
Transactions Authorized to Be Paid Outside Purchasing System; Petty Cash Account
Form; Replenishment of Petty Cash Form; Emergency Check Request Form.
:6 COMMITTEE RESPONSIBILITIES:
None.
:7 REFERENCE:
This procedure adopted by City Council October 12, 1987, Item 21, A-53. Florida
Statutes (1989), Chapter 89-297, 218.73. Procedure amended by City Council
October 9, 1989, Item 20, A-26; amended June 21, 1993, Item 2-P; amended October
3, 1994, Item 3-S.
:8 EFFECTIVE DATE: September 15, 2003