Financial Procedures

4. Expenditure

4.2 Payment of Suppliers

4.2.1 Introduction
This section covers all payments for goods and services other than those falling within the category of Payroll payments and small disbursements of expenses paid through petty cash.

Most payments will relate to liabilities arising from official orders and will be in the form invoices from suppliers or contractors. Other payments will arise from specific types of creditors such as public utilities. The procedure for making these various kinds of payment will vary according to their nature but all will be subject to the same basic checks.

4.2.2 Basic Checks
Departments must ensure that:

(i) goods which have been supplied or the services which have been rendered are satisfactory as to quality and correct as to quantity and stamped as such;

(ii) prices are in accordance with order, agreement, contract quotation or current market rate, whichever is applicable, and that the arithmetic is correct;

(iii) expenditure is within the amount provided by budget allocation and is correctly allocated and coded. Accounts must be charged in the financial year in which the work is done or the goods supplied irrespective of the year in which financial provision is made or when the payment is actually made;

(iv) payments are lawful and regular: lawful in that they are payments which the College is authorised to make under its Charter and Statutes, and regular in that they are in accordance with the College's policy and procedures and comply with its Financial Regulations;

(v) any special authority needed for incurring expenditure has been obtained. NB: This is particularly important in the case of certain specialised equipment (e.g. computers) and Specific Funds (like Prize or Memorial Funds) requiring the oversight of a co-ordinator;

(vi) all trade and cash discounts allowed have been deducted from the relevant invoices;

(vii) VAT has been correctly accounted for. If a substitute invoice is required, it must be stamped SUBSTITUTE FOR ORIGINAL by Purchasing before payment is authorised;

(viii) goods or services have not been previously paid for;

(ix) official orders have been marked off.

4.2.3 Certifying Accounts
An account cannot be accepted for payment by the Finance Department unless it has been certified correct in all respects. The authorising officer’s certificate therefore, constitutes an assurance that all the checks enumerated in the preceding sub-paragraph have been carried out.

4.2.4 Coding Accounts
It is the responsibility of staff certifying accounts for payment to ensure that the correct accounts codes have been used. Every department/activity has been supplied with the codes relevant to it and it is essential that certifying staff familiarise themselves with them for easy and accurate application. (See also 4.1.3(f)).

4.2.5 Accounts not dealt with by Departmental Staff include:
(i) Income Tax and Value Added Tax payments
(ii) Superannuation/Compensation payments
(iii) Insurance

These are handled by the Finance Department.

4.2.6 Programme of Payment/Year-end Accounting
The programme for payments is based, at present, on a weekly cycle. Normally, certified invoices received in the Finance Department by midday Tuesday will be paid by the end of the same week.

Special year-end arrangements exist at the close of the financial year (31 July) which enable payments to be accounted for in either the old or new year on the basis of goods delivery or service performance dates given by departments certifying the invoices. Close to each year-end, the Director of Finance writes to all departmental heads and project co-ordinators advising them of the Year-end Accounting Arrangements and the effect a timely fulfilment of orders has on final results. Finance Department staff are similarly informed and, additionally, are provided with Year-end Procedures Notes to facilitate the execution of their individual year-end tasks.

• Accrued Invoices 2007-08 [Excel file]
• Accrued Hourly paid staff & expenses 2007-08 [Excel file]

4.2.7 Cheque and BACS Payments
Most payments will be made through the computer system which provides for either a cheque payment or a bank transfer.

All requests for payments, that are properly authorised and received by 12 O’clock Tuesday, will be processed and dispatched by Friday afternoon of the same week.

If details of the supplier’s bank account have been given, the payment will usually be credited the supplier’s bank account by the following Monday and no later than the following Tuesday.

Requests for payments arriving after the Tuesday cut off, will generally be processed and paid in the following week. This is not critical for many suppliers’ invoices because the College is usually granted 30 days credit.

Where it is necessary to make a payment at very short notice, a 'prompt' payment can be arranged. Such payments must be of a very urgent nature. A properly authorised invoice (with payee and chargeable account code written in) should be sent to the Payments Officer, Finance Department. A cheque should be available within a day or two of the receipt of the invoice.

4.2.8 Banking arrangements
All arrangements with the College's bankers concerning its bank accounts and the issue of cheques should be made through the Director of Finance.

No bank account may be opened by any department without the written authority of the Director of Finance. All College accounts should bear the College's name.

Details of the powers of specified officers/signatories can be found at Financial Limits.

4.2.9 Building Contracts etc
Payments under contract must conform to the specified terms for payment and will usually be accompanied by an architect's certificate.

In circumstances where the College is the main contractor, departments (usually Estates and Services or Residences, Catering and Conference Services) should ensure that sub-contractors have a Subcontractor’s Tax Certificate. This certificate enables the College to pay the sub-contractor gross without deduction of income tax and an evidence of registration should be sent with the request for an official order.

Where, exceptionally, no certificate exists, tax will be deducted and invoices should be sent to the Payroll section for payment. After payment the Payroll section will pass the invoice to the Purchasing section for the necessary journal entries in the Accounts Payable ledger.

4.2.10 Advertising and Insurance Payments
Advertising fall into two broad categories, viz:

(i) staff and personnel recruitment, and

(ii) courses and other advertising.

Advertisements relating to staff must be channelled through the Personnel Section.

All other advertising must be conducted through the Finance Department. The purpose of this is to ensure that in all cases procedures for advertising are covered by an official order and, where necessary, handled by an appropriate advertising agency.

All insurance of College properties and other risks are under the control of the Head of Purchasing; accordingly, all insurance payments will be checked and authorised by Finance Department staff. (For further details, see section 6.5).

4.2.11 Staff Expenses Claims
See staff expenses section.