To describe some of the exciting work we do here in Administration and Accounting, and describe some of the checks and balances we have, below is the life cycle of a Purchase Order and how it is handled by certain staff.
- Program staff, possibly you, have a need to make a standard purchase for their program/job. To do this, they initiate a Purchase Order (PO) REQUEST by filling out the Excel PO Request file in their Division’s PO folder on the server. As much info as possible should be provided, but at a minimum should include: Vendor, Cost Center, Project Code (if not 000) and the approximate cost.
- Division Directors then routinely go into their Division’s PO folder to review and approve these PO Requests, if for an allowable and needed item.
- Once a Division Director approves a PO Request, the Director of Administration and Accounting (me) certifies that the agency has enough funds to pay for the item, verifies cost center and other account info, and then assigns a PO number to the request. It is now an official Purchase Order.
- The Accounting Specialist for Purchasing, Jenny Dickerson, then verifies info on the PO and places the order. This sounds simpler than it actually is because several factors may come into play, such as the need to get bids at certain price thresholds, logistics of delivery, price changes, product availability and working with program staff to assure we get exactly what we need.
- Once the item is received, Jenny verifies shipping documents match the actual delivery, and then holds on to these documents to match up with the actual item invoice once received.
- When the invoice comes in, Jenny attaches the shipping documents and PO to the invoice, and submits this to the Accounting Specialist for Accounts Payable and Cash Receipts, Katie Berter, for payment.
- Katie then verifies all needed paperwork is accounted for and enters the required info into our financial reporting system, Dynamics GP. Katie has to also assure cost center and other accounting codes are valid, and if not, determine if something needs to be corrected on the original PO or if we need to create the correct account info in the system.
- Once the info for payment has been entered, Katie processes this, along with the hundreds of other payments (done at least twice monthly), through the Accounts Payable system to produce the check for payment.
- Once checks are created, Katie matches the checks up with their paperwork and hands them over to the Accounting Specialist for General Ledger, Scott Baxley, for review.
- Scott then provides another review of paperwork for the purchase, verifying that the purchase was approved, the account info looks accurate, and that the invoice amount matches the check amount. Once he approves, he hands the checks back over to Katie who then obtains two signatures for each check.
- Check signers for the agency are the District Director of Health, Dr. Lynne Saddler, and the four division directors, those who shall not be named (for my Harry Potter fans…).
- Directors then provide ANOTHER review of the paperwork to assure the info matches and looks legitimate, and then signs the checks.
- Once signed, the checks go back to Katie, who then mails the checks out to the vendors. All paperwork, including the PO, is then stapled together and filed in the Accounts Payable files for the current fiscal year, for potential review by auditors when they perform their annual audit.
- Vendor checks are then reconciled when Scott does his monthly reconciliation of our local bank account by verifying that everything that shows up on our actual bank statement was actually entered into our financial reporting system.
Wow! What an exciting ride! We hope you now have a better understanding of our processes and the checks and balances that occur along the way of making a purchase.
By: George Moore, Director of Administration and Accounting