Integrated CSU Administrative Manual

CSU POLICY

Section:   CSU POLICY MANUAL FOR CONTRACTING & PROCUREMENT

Section 5000 Policies

Policy Number:  5205.0

Policy Title: Low-Value Purchases

Policy Effective Date:  March 19, 2001

Last Revision Date:  
(see revision history)

POLICY OBJECTIVE

To establish system wide contracting and procurement policy as required by Education Code 89036.

POLICY STATEMENT

The development of methods for reducing the costs of executing low-value purchases through expedited order processing, the use of procurement credit cards, and/or the issuance of low-value purchase authorizations shall be encouraged. A low-value purchase authorization may be granted by the President or designee to individuals in departments outside the purchasing department, such delegation of authority shall be in writing. It shall be the responsibility of the campus to determine appropriate levels of delegation based on internal policy and procedure.

The chief financial officer of each campus is responsible for developing and maintaining policies and procedures governing low-value purchases. Campus practices should insure strong internal controls that mitigate procurement abuses, comply with Trustee policy, ensure observance of good business practices and provide appropriate checks and balances. Since procurement discretion may involve the application of the State's conflict of interest laws, attention should be given to compliance with those laws in light of the potential impact that the exercise of procurement discretion may have on a personal financial interest.

The following policies shall be observed in administering low-value purchase authorization:

Each campus must develop low-value procurement policies and procedures that as a minimum include the following:

A. Usage Controls - General procurement controls should be instituted to:

  1. prohibit splitting of purchases to circumvent purchase limits
  2. prohibit purchases of items determined by the campus to be inappropriate
  3. prohibit the procurement of personal services, including consulting services
  4. define role of the approving official to insure that a cardholder's subordinate or peer is not designated as approving official. Approving officials should not approve their own purchases
  5. ensure duplicative payments do not occur
  6. ensure that accessible planned purchasing agreements and services made available from internal sources or through established agreements shall take precedence in low-value purchase considerations

B.   Monitoring Activities that include the performance of periodic post-audits, to insure compliance with the CSU procurement policies.

C.   Periodic appraisals shall be conducted to ensure proper performance under the delegations and to provide a basis for adjusting or discontinuing delegation authority to individuals.

D.   Enforcement provisions that clearly identify sanctions for improper use of the delegation. Such sanctions may include required reimbursement for personal charges including any applicable transaction fees, and suspension of the delegation when warranted.

E.    Payment processing provisions - The processing of credit card payments must include a complete review and analysis of the monthly credit card charges. In support of the review, the campus departments should be required to submit complete supporting documentation in a timely manner. The review should include the following:

  1. Supervisor or management approval
  2. A follow-up of disputed charges from the prior months
  3. A review of the completeness of the documentation supporting the monthly credit card invoice
  4. Clearance of outstanding delinquent invoices

F.    Provision for the return of procurement credit cards - Personnel clearing procedures must specifically include a final card reconciliation and return-of-card process.

 

APPLICABILITY AND AREAS OF RESPONSIBILITY

 

REVISION HISTORY

 

RESOURCES AND REFERENCE MATERIALS

Useful Guidelines:

 

Related Principles:

 

Sound Business Practices:

 

Laws, State Codes, Regulations and Mandates:

Reference: EO 760

COGNIZANT OFFICE(S)

CO Manager:

Tom Roberts
Director, Contract Services & Procurement
CSU Office of the Chancellor
troberts@calstate.edu

Subject Expert:

Tom Roberts
Director, Contract Services & Procurement
CSU Office of the Chancellor
troberts@calstate.edu

Affinity Group:

Procurement and Support Services Officers

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