Financial Regulations

As a publicly funded institution, the University must seek to procure all Goods, Services and Works, with high ethical standards by applying principles of sustainable procurement. Sustainable Procurement is a process whereby the University meets its needs for Goods, Services and Works in a way that achieves value for money on a whole life cost basis, generating benefit not only to the University, but also with consideration to Social, Economic and Environmental factors.

The University is also required to be fully compliant with the relevant procurement legislation and regulations in Scotland:

• Public Contract (Scotland) 2015 Regulations;
• Procurement Reform Act 2014,
• Procurement (Scotland) Regulation 2016; and
• Other applicable legislation.

The Executive Director of Finance is responsible for ensuring compliance with these requirements and delegates day to day responsibility for this to the Head of Procurement.  The Procurement Office is the central strategic procurement team, which supports the University in achieving its objectives and strategic vision.

The Procurement Office will have responsibly for the following:

• Issuing a Procurement Strategy
• Issuing a Procurement Policy, which highlights the code of ethics required for all purchases (for example, compliance with the Bribery Act 2010, the Modern Slavery Act 2015)
• Issuing a Contracts & Supplier Relationship Management Policy
• Issuing a Purchasing Card Policy
• Issuing a Travel Booking Policy
• Issuing a Gifts and Hospitality Policy
• Providing professional, qualified procurement expertise, advice and services to stakeholders across the University;
• Providing training to staff members with delegated purchasing authority;
• Issuing guidance to assist individuals procuring non-framework goods and services with a total value less than £25,000 over 48 months. Individuals must ensure no local or collaborative contracts exist prior to initiating a procurement process. Procurement less than £25k
• Reviewing and approving all Procurement Policy Exception (PPE) Agresso tasks and publishing direct award notice on the Public Contract Scotland (PCS) portal for all PPEs greater than £50k.
• Creating the Procurement Annual Report and sending a copy to the Scottish Ministers.
• Managing all tenders to procure Goods, Services and Works with a value greater than £25,000 over a 48 month period in compliance to the Procurement rules and regulations.
• Reviewing and approving all Agresso requisitions greater than £25k.

Purchase decisions need to be justified and it is therefore important that records are complete and details stored, in line with University retention policy. Any personal or otherwise non-arms length association which a member of staff making or influencing a purchase may have with a supplier should be notified to the Procurement Office before the purchase is made.

SMG members must ensure that all members of staff comply with the Procurement Policy.

Only employees of the University are permitted to have purchasing authority within the University’s financial system.

If there is a contract in place with a supplier for a particular good/service/works, Schools and Administrative Services must purchase their required goods/services/works from that supplier. Details of all contracts are available on the Procurement Office website.

If there are no existing contracted suppliers who can provide the goods or services, the budget holder must refer to the University’s procurement policy on the Procurement Office webpage to conduct a tender or alternative procurement process to identify a supplier.

Once a supplier has been identified for the required purchase, a new supplier must be set up on the University’s finance system, Agresso, by submitting a new supplier request.  These can only be requested by Purchasing Officers, who must follow the University’s New Supplier Process.  Exceptions to the need to set up a new supplier include where the value and nature of the transaction allows the payment to be made either using a Purchasing Card (see 6.06 Purchasing Card) or a Sundry Payment (see 6.07 Sundry Payments).

Any new suppliers which are set up must be compliant with the Intermediaries Legislation, by following the University’s Employment Status Policy on the P&OD website.

The ordering of goods and services should be in accordance with the Regulations: 2.01 Delegation of Authority, 2.02 Segregation of Duties, 6.01 Procurement and Tendering Policy.

Purchase orders must be raised using the University’s financial system for all purchases of goods, services and works before the purchase is made, except in the following cases: 1) a Purchasing Card is used 2) a Corporate Credit card is used 3) travel expenses booked using the University’s appointed travel provider and 4) for a small number of other spend categories where pre-arranged contracts exist and it is impractical to raise a purchase order (eg energy contracts).

Purchase Orders fulfil the role of acceptance of a supplier’s offer and bind a contract on the University’s terms and conditions. The use of purchase orders provides protection for the individual buyers and the University.  They can only be raised by users of the University’s finance system (Agresso) who have completed requisitioning training.

For any goods ordered from abroad, the Tax, Treasury and Reporting Team within the Finance Office are responsible for managing the VAT and import duty.  Departments are not authorised to deal with import agents directly about VAT and import duty.

All goods should be received at designated receipt and distribution points. On receipt they should be checked for quantity and/or weight and inspected for quality and specification. A delivery note should be obtained from the supplier at the time of delivery and signed by the person receiving the goods. In relation to services, individuals must be satisfied the works / services have been completed to the agreed standard.

In most cases, goods received which are of the requisite standard should be confirmed as received in the University’s financial system via a Goods Received Note (“GRN”) on the day of receipt of goods or service.  GRNs should be processed prior to receipt of the invoice from the supplier and receipt of the invoice should not be used as back up for processing a GRN.  If the goods are deemed to be unsatisfactory, then the supplier should be immediately notified, preferably in writing, so that they can be collected for return as soon as possible, and no GRN processed, likewise for any services. Where goods are short on delivery, the record should be marked accordingly by processing a GRN for what has been received, providing the goods are satisfactory, and the supplier immediately notified.  A GRN should never be completed in Agresso before the goods or services are received.  Exceptions to the GRN requirement may be authorised by the Executive Director of Finance, in relation to, for example, certain types of goods below a certain value.  Guidance in relation to any such exceptions will be available on the Finance website.

The University maintains a No Purchase Order, No Pay Policy.  Payment of all supplier invoices is made by the central Accounts Payable team via the weekly payment run. Invoices must be received by Accounts Payable directly from the supplier, except in the case of 6.07 Sundry Payments and the circumstances outlined in 6.03 Requisitions and Purchase Orders. The University pays its suppliers by BACS electronic transfer.  Only in exceptional circumstances should other forms of payment be used, such as other types of electronic transfer, cheque, or cash.

Supplier invoices will be processed after a series of checks, as follows:

• The invoice contains a valid purchase order reference from the University’s finance system (with the exception of a small number of spend categories where pre-arranged contracts exist and it is impractical to raise a purchase order);
• The amount invoiced is within the University’s tolerance level when compared to the purchase order;
• The quantity invoiced is in line with the purchase order;
• A GRN has been raised on the University’s financial system – note it is the responsibility of the Purchase Officer or Project Manager (in relation to works) to ensure the GRN is processed prior to receipt of the invoice.
• The invoice is a valid VAT invoice, and not a proforma invoice.

Any invoice which does not comply with the checks as above will be returned to the supplier and the relevant University requisitioner, who will be expected to resolve the situation. 

Late Payment

The Late Payment of Commercial Debts (Interest) Act 1998, as amended by subsequent regulations, applies to the University.  The effect of this Act is that:

• Implied late payment terms are added to all contracts;
• All suppliers can charge interest on overdue invoices at a rate of interest is 8% per annum above the official daily rate of the Bank of England;
• Compensation is also payable depending on the value of the debt.

In view of the penalties in this Act, invoices must be passed for payment as soon as they are received. Any charges incurred will be charged back to the College / University Service concerned.

The University allows the use of Purchasing Cards to facilitate the purchase of low value and/or obscure and irregular items such as are ordered online.  The use of Corporate Credit Card are intended to support individual expenses whilst travelling on behalf of the University. The Procurement Office are responsible for processing the application and day to day administration of both Purchasing and Corporate cards. All Cardholders must complete all necessary training and read and fully understand the Purchasing Card Policy and the Corporate Card Policy, which is located on the Procurement Office web page. The use of a card does not alter the underlying rationales of purchasing transparency, fairness, competition and value for money - although their use does alter some of the traditional accounting mechanisms, such as separation of signatories. Full details about the use of both Purchasing and Corporate cards are available on the Procurement Office web site.

A sundry payment is a low value payment made to third parties, without setting them up as suppliers within the University’s finance system.  Sundry payments cannot be made to employees.  Employees must use the staff expenses procedure outlined in 5.03 Staff Expenses.

They can be made in the following circumstances:

• The total value of the transaction, including VAT is less than £1,000
• The third party is not already set up as a supplier on the University’s finance system;
• There will only be one payment made to the third party; and
• The payment does not fit the criteria for using a purchasing card.

Payments to individuals or “personal service companies” must comply with HMRC’s Off-Payroll Working (IR35) Legislation, and therefore in many cases it may also not be possible to pay individuals by sundry payment.

Cash may only be used to make payments in exceptional circumstances and for small amounts.  Petty cash is permitted in accordance with 7.02 Treasury Management.

• Petty Cash floats and cash payments must NOT be used for the reimbursement of staff personal expenses (e.g. car parking charges, bus/train tickets, taxis, etc.) which must be claimed via Staff Expenses – see Section 5.03 Staff Expenses.
• Salaries, wages, fees or other forms of remuneration must not be paid using petty cash. This includes casual payments to students and other persons.