Financial Regulations

19. Expenditure

19.1 General

The Director of Finance is responsible for making payments to suppliers of goods and services to the College.

19.2 Scheme of Delegation/Financial Authorities

The Head of Department is responsible for purchases within his/her department. Purchasing authority may be delegated to named individuals within the department. In exercising this delegated authority, budget holders are required to observe the provisions relating to purchasing in the College's Financial Procedures. The Director of Finance shall maintain a register of authorised signatories and Heads of Department must supply him/her with specimen signatures of those authorised to certify invoices for payment (for paper-based systems). Under procedures agreed by the Director of Finance, central control shall be exercised over the addition and set up of requisitioners and authorisers and their respective financial limits (for electronic systems). The Director of Finance must be notified immediately of any proposed changes to the authority to commit expenditure. Heads of Department and budget holders are not authorised to commit the College to expenditure without first reserving sufficient funds to meet the purchase cost. The member of staff (or budget holder) authorising the invoice for payment must be different from the member of staff responsible for approving the purchase order form. Unless written permission is obtained from the Director of Finance, departments must requisition goods and services to enable orders to be prepared and counter-authorised by appropriately authorised staff within the Finance department.

The Authority Limits for purchasing by departmental signatories and by College officers and committees shall be as set out in a document approved by Council.

19.3 Procurement

The College requires all budget holders, irrespective of the source of funds, to obtain supplies, equipment and services at the lowest possible cost consistent with quality, delivery requirements and sustainability, and in accordance with sound business practice. Factors to be considered in determining lowest cost are noted in the Financial Procedures. The Head of Procurement is responsible to the Director of Finance for:

• ensuring that the provisions relating to purchasing in the College's Financial Procedures are known and observed by all involved in purchasing for the College;
• advising on matters of College policy and practice in relation to purchasing;
• advising and assisting departments where required on specific departmental purchases;
• developing appropriate standing supply arrangements on behalf of the College to assist budget holders in meeting their value for money obligations;
• vetting all orders above the lowest authority limit specified in the Financial Limits statement approved by Council before they leave the College;
• supervision of the tendering process and ensuring strict adherence to the procedures;
• the drafting and negotiation of all large-scale purchase contracts (generally in excess of the EU threshold) undertaken by the College, in collaboration with the responsible department;
• ensuring that the College complies with EU regulations on Public Purchasing Policy.

19.4 Purchase Orders

The ordering of goods and services shall be in accordance with the provisions relating to purchasing in the Financial Procedures. Official College orders must be placed for the purchase of all goods or services, except those made using purchasing cards, company credit cards or petty cash. In exceptional circumstances, urgent orders may be given orally, but must be confirmed by an official purchase order endorsed 'confirmation order only' not later than the following working day. All official orders must be approved by the finance department before being dispatched unless they are below the limit in the College's Conditions of Contract for the Purchase of Goods and the department has been given the authority to approve orders locally. When transferring goods or services between departments, an inter-departmental transfer form must be used. It is the responsibility of the Director of Finance (through the College's Head of Procurement) to ensure that all purchase orders refer to the College's conditions of contract. Staff contravening these rules may be personally liable for the costs of the goods involved.

19.5 Purchasing Cards

The operation and control of the College's purchasing cards is the responsibility of the Director of Finance. Holders of purchasing cards must use them only for the purposes for which they have been issued and within the authorised purchase limits. Cards must not be loaned to another person, nor should they be used for personal or private purchases. Cardholders should obtain approval to purchase from the relevant budget holder and should ensure that there is sufficient budget available to meet the costs. The Director of Finance shall determine what information is required on purchases made with purchasing cards from cardholders and deadlines for receipt in the Finance section to enable financial control to be maintained and cardholders must provide that information. Staff contravening these rules may be personally liable for the costs of the goods involved. The misuse of purchasing cards shall be grounds for disciplinary action.

19.6 Tenders and Quotations

Heads of Department and delegated budget holders must comply with the College's tendering procedures contained in the College's Code of Tendering Practice. Only partnership arrangements for the supply of goods or services specifically approved by Finance and Resources Committee or Council will fall outside these arrangements for tenders and quotations. The main points covered by the College's code of tendering practice are described in the statement of tender practice.

19.7 Contracts

Building contracts are the responsibility of the Director of Estates and Facilities, and are monitored by the Estates Committee. All contracts must be subject to the College's tendering procedure. Proposals will normally be initiated by the Director of Estates and Facilities in respect of planned replacements, general improvement schemes, space planning or in response to requests from departments. Consultants may be appointed if the project, as determined by Estates Committee, is too large or too specialised for Estates and Facilities Department resources. Appointments shall be subject to tendering and other procedures where appropriate. Proposals shall be presented in the form of costings or investment appraisals prepared in conjunction with the Director of Finance as appropriate for Estates Committee consideration. Investment appraisals should comply with appropriate HEFCE guidance. Contracts must be covered by an approved budget. Variation of the orders which would increase the total contract price require the prior approval of the Director of Finance. HEFCE guidance on best practice should be followed even when HEFCE approval is not required. The achievement of value for money will be an objective in the letting of all contracts. The main points are described in Conditions of contract for the purchase of goods.

See Financial Regulation 23 concerning the use of the College's name in contracts.

19.8 EU Regulations

The Head of Procurement is responsible for ensuring the College complies with its legal obligations concerning EU procurement legislation. EU procurement regulations apply to written contracts for all forms of procurement, purchase or hire (whether or not hire purchase) with a total value exceeding a threshold value. The Head of Procurement will advise Heads of Department on the thresholds that are currently in operation. A breach of these EU regulations is actionable by a supplier or potential supplier. It is the responsibility of Heads of Department to ensure that their members of staff comply with EU regulations by notifying the Head of Procurement of any purchase that is likely to exceed the thresholds. This will need to be done well in advance in order to permit advertisements in journals such as the Official Journal of the European Communities (OJEC).The Head of Procurement is also required to submit to HEFCE annually, details on expenditure which exceeds the threshold. Copies of the relevant documentation falling into this category must be provided by Heads of Department to the Head of Procurement.

19.9 Receipt of Goods

All goods shall be received at designated receipt and distribution points. They shall be checked for quantity and/or weight and inspected for quality and specification. A delivery note shall be obtained from the supplier at the time of delivery and signed by the person receiving the goods. The details of all goods received shall be recorded on the day of receipt. If the goods are deemed to be unsatisfactory, the record shall be marked accordingly and the supplier immediately notified so that they can be collected for return as soon as possible. Where goods are short on delivery, the record should be marked accordingly and the supplier immediately notified. All persons receiving goods on behalf of the College must be independent of those who negotiated prices and terms and placed the official order. Goods received notes must be retained as specified in the College's Retention Schedule.

19.10 Payment of Invoices

The procedures for making all payments shall be in a form specified by the Director of Finance. The Director of Finance is responsible for deciding the most appropriate method of payment for categories of invoice. Payments to UK suppliers will normally be made by computer cheques or BACS transfer each week. In exceptional circumstances the Director of Finance will prepare cheques manually for urgent payments. Heads of Department are responsible for ensuring that expenditure within their departments does not exceed funds available. Suppliers should be instructed by the budget holder to submit invoices for goods or services to the Finance Department (Payments section). Care must be taken by the budget holder to ensure that discounts receivable are obtained. Payments will only be made by the Director of Finance against invoices that have been certified for payment by the appropriate Head of Department or authorised signatory. Payments for the departments that have been given the authority to order goods electronically using the Finance system (Agresso) will be made when the ordered goods or services have been receipted on Agresso.

Certification of an invoice or receipting of an electronic order signifies that:

• the goods have been received, examined and approved with regard to quality and quantity, or that services rendered or work done is satisfactory;
• where appropriate, it is matched to the order;
• invoice details (quantity, price discount) are correct;
• the invoice is arithmetically correct;
• the invoice has not previously been passed for payment;
• where appropriate, an entry has been made on a stores record or departmental inventory;
• an appropriate cost centre is quoted; this must be one of the cost centre;
• codes included in the budget holder's areas of responsibility and must correspond with the types of goods or service described on the invoice.

19.11 Staff Reimbursement

The provisions relating to purchasing and payments within the are to be used for the procurement of nearly all non-pay supplies. However, on occasion, staff may incur expenses, most often in relation to travel, and are entitled to reimbursement (see 20.5).

19.12 College Credit Cards

Where appropriate, the Director of Finance may approve the issuing of College credit cards. Such credit cards shall be used for the payment of valid business expenses only, and the misuse of such cards shall be grounds for disciplinary action. The Director of Finance will be responsible for setting in place a system to monitor the use of College credit cards and account for expenses charged through them.

19.13 Petty Cash

The Director of Finance shall make available to a department on request a limited cash floats for disbursement of petty cash expenses within the department although normally petty cash transaction will be reimbursed through the Finance Department's Cash Office. For security purposes petty cash imprest floats are kept to a minimum. Items costing more than £50 must not be reimbursed by petty cash. Petty cash claims must be supported by receipts or vouchers where practicable and authorized by an approved signatory. The Head of Department has overall responsibility for the safekeeping of the float allocated to his/her department. However, he/she may delegate the day to day administration of the float to another member of staff. The person with responsibility for the day-to-day administration of the float is expected to keep accurate up to date records in accordance with Finance procedures and will be accountable for losses. The petty cash box must be kept locked in a secure place in compliance with the requirements of the College's insurers when not in use and will be subject to periodic checks by the Head of Department or another person nominated by him/her. Standard College petty cash forms are supplied by the Director of Finance and must be used for recording all imprest accounts. At the end of the financial year a certificate of the balances held should be completed by the member of staff responsible for the float and counter-signed by the Head of Department.

19.14 Other Payments

Payments for maintenance and other items to students on behalf of sponsoring organisations shall be made on the authority of the Director of Finance, supported by detailed claims approved by the Head of Department.

19.15 Late Payment Rules

The Late Payment of Debts (Interest) Act 1998 was introduced to give small businesses the right to charge interest on late payments from large organisations and public authorities. Key points are:

• small businesses can charge interest on overdue invoices;
• interest is chargeable on sales made after 1 November 1998;
• the rate of interest is currently 8% per annum above the official daily rate of the Bank of England;
• the Act also applies to overseas organisations;
• the College can be sued for non-payment.

In view of the penalties in this Act, invoices must be passed for payment as soon as they are received.

19.16 Project Advances

The Director of Finance and the relevant Head of Department may jointly approve cash advances for projects carried out away from the College where cash expenditure may be unavoidable. Other forms of payment will be expected to be used wherever possible, such as an official purchase order and subsequent payment. Where the sum required is large, arrangements will be made to pay the advance in instalments.

Original receipts or paid invoices must be retained for all sums expended in this way. Upon completion of the project to which the advance relates, within one month a final account and supported by original receipts, an expenditure report must be prepared to demonstrate how the advance was disbursed and any unspent balance repaid. Under no circumstances will a second advance be approved when the final accounting for an earlier advance to a project or individual is outstanding.

19.17 Providing Hospitality

Staff entertaining guests from outside bodies at lunch time should normally use the College's catering facilities. Where this is not the case, reasons must be stated when submitting a claim for reimbursement. The limits concerning acceptable expenditure for entertaining guests are set out in the College's.