Payments to Third Parties

 

Description

Payments to third parties include vendor payments, payments to independent contractors, travel reimbursements, reimbursement to individuals, moving expenses, etc.  Regulations regarding these payment requests are specified by the Office of State Finance.  The Office of State Finance has the responsibility of interpreting the statutes and issuing guidelines with which all state agencies must comply.

TYPES OF PURCHASES

There are two types of purchases relating to goods and services that result in payments to third parties:

Small Dollar Purchases ($5,000 or under)

Unless otherwise governed, restricted, or addressed by University policy, University departments may purchase products and services directly from a vendor when the cost of the acquisition is $5,000 or less.  Orders cannot be split in order to stay below the limit and avoid generating a purchase requisition to Purchasing. 

Competition is recommended and the ordering department shall ensure that such purchases meet all other requirements including, but not limited to legality, availability of funding, and whether the purchase is allowable, as in the case of a sponsored grant or contract. 

University Service Units such as Physical Plant, Printing Services, etc. must be utilized if they are able to support your needs.  Mandatory contracts have been established for office supplies, furniture, computers, etc.  A list of these contracts can be viewed on the Purchasing website at http://www.ou.edu/purchasing/home/contracts/contracts_index.htm.   The Travel Reimbursement Policy shall be used for all reimbursable travel expenditures, http://www.ou.edu/aa/travel.htm.

Exceptions

Certain purchases, even if $5,000 or less, must be processed through Purchasing:

    • If the purchase involves a contractual document of any kind, or if it is a type of product or service that would reasonably involve a contractual document, it must be signed and approved as provided by Regents’ Policy.  This will avoid obligating the University to any terms or conditions that may conflict with the State Constitution, statutes, or case law; or to avoid binding the University to any duties or liabilities against its best interests. Examples include (but are not limited to):
      • Leases
      • Hard copy use licenses (such as for software, intellectual property)
      • Services
    • If the purchase involves radioactivity (to ensure appropriate regulatory authorities are involved).
    • If the purchase involves a laboratory animal (to ensure appropriate regulatory authorities are involved).
    • If the purchase involves space maintenance or minor construction (to ensure that Physical Plant / Site Support can exercise appropriate oversight).
    • If the purchase involves any other special product or service that requires prior approval from a University department with special responsibility and authority over such product or service.

Purchases over $5,000

A requisition must be entered into the financial system, approved, and forwarded to Purchasing for action. Purchasing utilizes an informal solicitation procedure to acquire bids and involves the requisitioning department in the evaluation and award decision.  This process normally takes 2 - 4 weeks.

For purchases over $50,000 to $125,000, a formal solicitation procedure is used to acquire bids.  This process takes to 3 – 6 weeks.  For purchases over $125,000, the bid must be approved by the Board of Regents which extends the time for the award significantly. 

 Payment Requests

Once the invoice or payment request is received, the department has the responsibility of verifying that the goods and/or services have been received and accepted.  Listed below are some types of expenditures that require additional documentation regardless of the payment method. 

    • Food and/or Beverages.  A completed Food and Beverage Expense Certification form must be attached for any expenditure for food or beverages.  Click on the link to review the policy, http://www.ou.edu/aa/food.htm.
    • Lodging.  The individual’s name, EMPLID number, a description of the travel objective, and if needed, designated lodging information must accompany any payment request for lodging.  Please remember that there is no advance payment for lodging.
    • Memberships.  State regulations allow for the payment of institutional membership dues.  Individual membership dues can be processed if the membership is transferable or it is the only way to receive informational materials such as periodicals, newsletters, subscriptions, etc.  Documentation of the exception should accompany or be noted on the payment request.
    • Moving Expenses.  A Moving Expense Certification form must accompany all payments related to moving expenditures.  Click on the link to review the policy, http://www.ou.edu/aa/moving.htm.
    • Postage.  State statutes do not allow for the reimbursement of postage stamps.  All payment requests for postage must be made payable to the US Postmaster.  Click on the link to review the policy, http://www.ou.edu/aa/postage.htm.
    • Registration.  Registration fees can be processed directly to the vendor after the conference has occurred. They may also be processed in advance if:
      • The event requires pre-registration along with payment and by standard policy will not accept a state purchase order or contract in lieu of payment; or
      • When a discounted fee is offered if paid in advance:
        • The registration fee must result in a discount to the state; and
        • The registration must allow for substitution of participant; and
        • The registration must provide for 100% refund should the event be cancelled.
    • Subscriptions.  The Office of State Finance guidelines stipulate that subscriptions can only be processed six weeks prior to the beginning date of the subscription.  Include the subscription dates on all payment requests for this type of expenditure.
    • Travel Reimbursements.  The Oklahoma State Statutes regulate travel reimbursements.  Click on the link to the travel policies, http://www.ou.edu/aa/travel.htm.

Payment Choices

Small Dollar Purchases ($5,000 or under)

For Small Dollar Purchases, departments have two payment methods available:

    • Pcard (only for merchandise, goods, etc.  See Purchasing Guide for allowable purchases on the Pcard).

      With the Pcard, the department contacts the vendor with the Pcard information, maintains the payment support in the Pcard files for seven years, and has support available for audit and reconciliation purposes.


    • Submit the invoice/payment request with the sponsor’s approval and department number to Financial Support Services (if grant or contract department, contact the grants and contracts administrative offices) for payment.  Any special handling requests for the check need to be noted with the invoice or payment request.

      Financial Support Services will issue and distribute the check to the payee unless otherwise specified.

Purchases over $5,000

Purchase Order payments can either be processed with a buyer’s Pcard or invoice payment request through Financial Support Services.  If a department receives an invoice or payment request that is related to a purchase order, the department should:

    • Review invoice to ensure payment was not made by credit card;
    • Verify that the merchandise or service was received and accepted;
    • Indicate purchase order number and any special handling instructions on invoice/payment request;
    • Obtain sponsor’s approval;
    • Forward to Financial Support Services (if grant or contract department submit to the grant and contract administrative offices) for processing.

Financial Support Services will issue and distribute the check to the payee unless otherwise specified.

If payment is processed with the buyer’s Pcard, the transaction will appear on the monthly reports and the purchase order can be used for supporting documentation.  The buyer in Purchasing is responsible for maintaining the supporting documentation for seven years.