SECTION 5 – PURCHASING POLICIES & PROCEDURES
5.A
PURCHASE ORDER SYSTEM
1. Purpose: To define the use of a Purchase Order (PO) System. 2. Policy : a. To ensure there are proper controls over expenditures incurred, a purchase order system is used at the Resort. A purchase order system is used to document bids on products and services, to obtain approvals on those expenditures before the goods or services have been committed to, and to document instructions that Accounting will use once the invoice for the goods/services are received. b. Purchase orders should be used on all purchases over $100. All managers are encouraged to use a purchase order on purchases under $100 to improve the documentation provided to accounting. All Capital and Reserve purchases must be on a purchase order. 3. Procedure : Obtain competitive bids, as necessary. All managers should get competitive bids on a regular basis, to ensure that the price to be paid for goods/services from multiple vendors is known and can be optimized. 4. Complete the purchase order with vendor name, address, date of purchase or current date, description of goods/services, price including tax, shipping, and installation as applicable. The purchase order should also include the account number that the goods/services will be coded to and in what month(s) they should be incurred. In the event that an invoice is not received by month- end, the purchase order can serve as back-up so the cost can be accrued. Purchases from the Capital and Reserve Funds require Board approval before a PO is issued. 5. Send the completed purchase order to the Controller and/or the General Manager, per the following: a. For purchases up to $500 – Department Manager approval. b. For all purchases over $500 up to $1,000 – Department Manager and Controller OR General Manager to approve. c. For all purchases over $1000 - Both Controller and General Manager to approve. d. For all purchases above $5,000, see Purchasing Authority memorandum regarding General Manager’s authority. e. All Capital and Reserve items require Board approval prior to purchase. 6. Once the appropriate approvals have been obtained, the approved purchase order will be routed to the Accounts Payable Clerk. The Accounts Payable clerk will detach and file one copy (white) and return the remaining purchase order copies (yellow & pink copies) to the Department Manager. At month-end, the Accounts Payable clerk will verify the receipt of invoices with the applicable purchase order. If an invoice is not received, the purchase order can be used to accrue the applicable expense if the goods have been received (or charged on revolving accounts). a. When the invoice is received by the Department Manager the manager will verify the receipt of goods, code invoice (as specified on the purchase order) and approve the invoice. The Department Manager will attach the yellow copy of the purchase order to the invoice and send to Accounts Payable for payment. b. Emergency Purchases – if there is an emergency purchase, the General Manager or Controller has the authority to make the purchase of the goods or services up to the amount of $5,000 (see Purchase Authority, II.D.2.4 for Emergency Purchases over $5,000.00). A purchase order should still be completed with “Emergency Purchase” indicated on the purchase order. The purchase order should be provided to the Accounts Payable for filing with the invoice. 7. Purchase Order Variance – A variance of 5% of the approved purchase order amount will be considered acceptable without additional approval. If the variance will be greater than 5%, the Department Manager must approve the variance and notify the General Manager.
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