Unauthorized purchases are "obligations incurred prior to the execution of a commitment voucher". In most instances, the appropriate commitment voucher is a regular UNC Purchase Order. Anytime a purchase is going to be made that is in excess of $5,000, the commitment voucher, e.g. a regular purchase order, must be in place prior to the time the order is placed. This not only includes goods, but also any services that vendors provide.
Here are some specific circumstances that have resulted in unauthorized purchases for UNC departments. In several instances, the invoice was received at the end of an agreement period and no purchase order or commitment voucher was in place for payment. A review of previous spending records will often eliminate these potential problems because a purchase order/commitment voucher can be created in anticipation of the invoice rather than after the invoice is received.
- Annual maintenance on equipment such as copiers is required, but no purchase order or commitment voucher is done because the exact amount is not known. Solution: do a requisition based on the previous year’s spending or previous year’s usage.
- Annual software maintenance or support fees.
- Advertising in professional publications is ordered, but no purchase order or commitment voucher is done because the exact amount is not known. Solution: do a requisition based on your best estimate of what the advertising will be.
- A good or tangible item is required and there is a service component to the goods that is not known precisely. Solution: do a requisition based on your best estimate of what the total cost will be.
Remember: purchase orders can be adjusted if the initial amount of the order does not cover all expenses.
The following describes how unauthorized purchases will be dealt with:
- If the order is less than $5,000, then the UNC Purchasing Director can review the request. If the Purchasing Director determines that a confirming purchase order is appropriate, a purchase order will be created. If the Purchasing Director determines that a purchase order is not appropriate, s/he will contact the department to discuss an alternative action.
If the order is greater than $5,000, and the UNC Purchasing Director determines that a confirming purchase order is appropriate, information will be forwarded to UNC’s FAST team representative in the State Controller’s Office for review and recommendation of disposition.
- If UNC’s FAST team representative in the State Controller’s Office approves the purchase, a purchase order will be created.
- If UNC’s FAST team representative in the State Controller’s Office does not approve, the UNC Purchasing Director will contact the department to discuss alternative action. One alternative is for the purchaser to personally pay for the purchase. Another is for the purchaser to return the purchase to the vendor from which it was obtained.
It is our goal to eliminate all Unauthorized Purchases. To do that, we need your help. When Unauthorized Purchases are eliminated, you will: save time, insure prompt payment to vendors, and insure that business is done in accordance with purchasing rules and regulations.
Click here to download the form used to evaluate unauthorized purchases. I trust you will help the University minimize the number of unauthorized purchases. Before sending the explanation to Purchasing, a signature by the Dean, Director, or Department Head is required.