Unauthorized Purchases

Unauthorized Purchases (Confirming Orders, After-the fact orders)

An unauthorized purchase is a purchase, letter of intent to purchase, or requests for scheduling in advance of an order that is made by a person who lacks the proper authorization to commit funds. If an employee was new, or in a new position, and was not aware of proper procedure, that lack of knowledge of proper procedures is not grounds for the approval of after-the-fact requisitions outside of the University approved purchasing process.

Examples of unauthorized purchases include but are not limited to:

 Employee procures commodities or services for the office or research, writing a personal check, paying with a personal credit card or personal cash;

 Employee calls a supplier and places an order for supplies, maintenance or repair without prior issuance of a valid purchase order or use of a p-card;

 Employee signs a supplier contract for services or supplies (employee may or may not have the authority to sign contracts) without first having the contract reviewed by Purchasing and possibly legal;

 Employee contracted for catered services or honorariums and didn’t know all the costs ahead of time or didn’t get all the individual’s required information for the vendor file.

In all the cases above, the employee made a purchase (committed funds) on behalf of the University without securing the appropriate internal approvals first and use of a University authorized procurement method (i.e. valid purchase order, p-card). The purchased items may be appropriate for business use; however, approvals for all University purchases must be secured before the purchase.

Adverse Effects to consider with unauthorized purchases include:

 The University may incur unintended financial obligations  Potential legal liability  Adverse publicity if unauthorized employees act as agents of the University by contracting with third parties  A contract signed by an unauthorized person may not only be binding on FSU, but may create a legal and/or financial obligation for the individual that authorized the goods/services. Contract could also result with unfavorable terms and conditions  Insufficient funds  Grant may not allow the purchase or grant/budget may be closed  Overpayment for goods or services by non utilization of contract suppliers  By-passing State Law for procurement methods  By-passing Legal Review  May place the University in a financial and credit risk and result in higher than necessary cost paid for products and services  Taxation issues – Conflict of Interest (Employee Employer relationship)  Risk of Audit write-up

Note: If it continues, and University continues to support it, we would be granting inherent authority to continue the practice.

How to avoid Confirming Orders?

 Plan Ahead  Call Purchasing for help or expediting orders, obtaining price quotes, bidding, or contract information  Know or read the University and Purchasing policies and procedures  Use a p-card for allowable p-card purchases when you can  Enter a requisition in a timely manner to allow Purchasing to be able to obtain competitive pricing, vendor information, missing requisition information, etc.  Lack of knowledge or saying someone was new is not sufficient for approval  If you have an emergency purchase or were in travel status, submit your confirming paperwork by the next possible business day explaining the circumstances  When watching for the PO number in OMNI, make sure that the PO is in “Dispatched” status before providing the PO number to the vendor. Dispatched status means that the purchase order has passed budget checking. If not in dispatched status the PO could be in budget error