You are here: XI-A. Purchasing > 3. Purchase Orders

XI-A.3
Purchase Orders

 

SECTION OVERVIEW AND POLICIES

This section provides agencies with information related to the issuance and maintenance of purchase orders (POs).

Agencies should, where practicable, use a PO for all purchases, including purchases from preferred source vendors, centralized contract vendors, agency contract vendors and for vendors providing goods and services under an agency’s discretionary spending authority. This includes POs where the agency plans to use the procurement card as a payment method for centralized contract and discretionary purchases.

 

The PO is used by the agency to authorize a vendor to provide goods or services at a dollar amount within the agency’s authority as set in law or by contract. In addition, the PO establishes the encumbrance and liquidates the pre-encumbrance on the purchase requisition within the Statewide Financial System (SFS).

 

Using a PO provides the State with the ability to track and collect useful information about the commodities and services it buys. In addition, the PO ensures that all purchasing staff follow a consistent process. Agencies should ensure that POs contain an adequate amount of detail to demonstrate the specific goods or services being purchased, and include this information on the purchase order line.

 

With the introduction of near-full segregation, the Division of Budget (DOB) will manage and monitor agency spending through financial planning ledgers and a budgeting tool called the Payment Schedule Projection (PSP). The PSP method is the system functionality associated with a PO that allows DOB to predict when spending will occur; therefore, agencies must specify the PSP method in the PSP type field on a PO. For more information on PSP, please refer to DOB’s Budget Bulletin B-1217 (https://www.budget.ny.gov/guide/bprm/bulletins/b-1217.html).

 

Process and Transaction Preparation:

 

Agency Contract Purchases

 

Online Agencies

 

Once an agency contract is approved in the SFS, the agency can issue a PO associated with the contract as needed. Agencies have two ways to create the PO in the SFS:

 

  1. Staged Contract Purchase Order Releases

    Agency users will have the option to have the SFS stage and automatically create POs at one or more fixed intervals against agency contract lines. The user will define specific contract lines and amounts to be included in a staged release as well as the frequency for the scheduled releases (e.g., monthly or one time) in the contract module. The user will also identify other information required for the PO, such as Location (e.g., how and where the supplier will receive the PO, the method of payment – for additional information about Location, see Chapter X, Section 4.D - Location). The process of staging contract releases into POs is used to schedule one or more PO for a duration identified by the buyer. This saves time because agencies do not need to enter information on a PO that is already included on the contract, contract line, and distribution line. Instead, the staging process does this automatically.

    Staging contract releases requires that the user be familiar with the related contract to ensure that the automatic creation of a PO at a regular frequency is appropriate. For example, staging contract releases may be appropriate in instances where the payment stream is recurring and predictable, such as monthly service fees associated with a preventative maintenance contract. However, staging monthly contract releases may not be appropriate in instances where the amount and/or frequency of the payment stream is difficult to identify, such as payments for remedial maintenance contract services.

    Staged contract releases will auto-source the creation of POs in an approved status. For additional information on auto-sourcing, please see Section 6 – Auto-Sourcing Purchase Orders of this Chapter. Agencies dispatch the PO to the supplier in accordance with contract terms.

  2. Manual Contract Purchase Order Releases

    A second way for the agency to create a PO is for a buyer to create a PO manually in the SFS. The buyer creates the PO in accordance with its internal guidance and policies and by following the guidance provided by SFS. Please access SFSSecure to find job aids containing more guidance on this. In addition, the buyer must reference the contract ID and contract line on the PO line. Agencies follow the approval process as defined by their security roles and dispatch the PO to the Supplier in accordance with contract provisions and terms.

 

Bulkload Agencies

 

Bulkload agencies must include the contract ID and contract line on the PO line when the agency sends a bulkload file to the SFS.

 

Centralized Contract Purchases

 

Agencies use a purchase requisition to begin the purchasing process for Centralized Contract purchases. For more information, please see Section 2 – Purchase Requisitions of this Chapter.

 

Agencies have three ways to create a PO against a Centralized Contract:

 

  1. System PO Creation:

    A requisition can be sourced to a PO in one of two ways:

     

    1. Auto Source a requisition to a PO

      Agencies can allow the SFS to auto-source all requisitions to POs. More information on auto-sourcing can be found in Section 6 – Auto-Sourcing Purchase Orders of this Chapter.

    2. Manual Source a requisition to a PO

      Agencies can manually source an approved requisition to a PO by using the Requisition Selection page within the SFS. For guidance on how to source a requisition to a PO, please access SFSSecure to relevant job aids. The agency must reference the centralized contract ID and contract line on the PO line. Agencies dispatch the PO to the supplier in accordance with contract terms.

     

  2. Manually Create a PO

    Agency buyers can create a PO manually in the SFS. The buyer creates the PO in accordance with its internal guidance and policies and by SFS. Please access SFSSecure to find job aids containing more guidance on this. In addition, the buyer must reference the contract ID and contract line on the PO line. Agencies follow the approval process as defined by their security roles and dispatch the PO in accordance with contract terms.

 

Value-Added Reseller (VAR) vendors cannot be selected on a purchase requisition. As a result, agencies must either 1) create a requisition without specifying a vendor, manually source the purchase requisition to a PO, and then select the VAR as the vendor, or 2) create a PO manually without a requisition and select the VAR as the vendor.

 

Agencies Serviced by the Office of General Services Business Services Center (BSC)

 

In addition to the guidance provided above, agencies serviced by the BSC must follow BSC guidance related to centralized contract purchases. Specifically, the BSC requires that agencies use a requisition to begin the purchasing process. The BSC is responsible for creating POs from purchase requisitions. In addition, agencies work with the BSC to determine how to process requisitions and POs to VARs. Agencies should contact the BSC for further information on the procurement process as it relates to centralized contract purchases.

 

Bulkload Agencies

 

Bulkload agencies must include the contract ID and contract line on the PO line when the agency bulkloads a file into the SFS.

 

Preferred Source and Discretionary Purchases

 

For Preferred Source and discretionary purchases, agencies use a purchase requisition to begin the purchasing process. For more information, please see Section 2 – Purchase Requisitions of this Chapter.

 

After a purchase requisition is approved, agencies have three ways to create a PO for a preferred source or discretionary purchase:

 

  1. System PO Creation:

    A requisition can be sourced to a PO in one of two ways:

     

    1. Auto source a requisition to a PO

      Agencies can allow the SFS to auto-source all requisitions to POs. More information on auto-sourcing can be found in Section 6 – Auto-Sourcing Purchase Orders of this Chapter.

    2. b. Manually source a requisition to a PO

      Agencies can source an approved requisition to a PO by using the Requisition Selection page within the SFS. For guidance on how to source a requisition to a PO, please access SFSSecure to relevant job aids. The agency must reference the centralized contract ID and contract line on the PO line. Agencies dispatch the PO to the supplier in accordance with contract terms.

     

  2. 2. Manually Create a PO

    Agemcu Buyers can create a PO manually in the SFS. The Buyer creates the PO in accordance with its agency’s policies and by SFS. Please access SFSSecure to find job aids containing more guidance on this. Agencies must follow the approval process as defined by their security roles and dispatch the PO.

 

Agencies Serviced by the BSC

 

In addition to the guidance provided above, agencies serviced by the BSC must follow BSC guidance related to Preferred Source and discretionary purchases. Specifically, the BSC requires that agencies use a requisition to begin the purchasing process. The BSC is responsible for creating POs from purchase requisitions. Agencies should contact the BSC for further information on the procurement process as it relates to preferred source and discretionary purchases.

 

Bulkload Agencies

 

Where practicable, Bulkload agencies must create POs for preferred source and discretionary purchases.

 

Procurement Card Purchases

 

Agencies must check the box on a PO to indicate the use of the PCard and then select the applicable masked PCard number from the drop down menu. Alternately, where applicable, the agency may select these options on a requisition, which are carried forward to the PO. OSC has published additional guidance about using a PO for procurement card purchases in Section 4 – Procurement Card Purchases of this Chapter.

 

 

Note: The use of stand-alone POs as a contract agreement above the OSC pre-approval threshold are no longer systematically supported in the SFS. Agencies must create these agreements as Procurement Contracts in the SFS and follow the business process outlined in Chapter XI, Section 3 – Purchase Orders Subject to OSC Review of this Guide.

 

 

Guide to Financial Operations


REV. 04/01/2017