Administrative Policies and Procedures Manual - Policy 4370: Receiving and Paying for Off Campus Purchases With a Purchase Order
Date Originally Issued: 11-01-1991
Revised: 07-01-2004, 07-01-2010, 12-01-2016
Authorized by UNM Regents' Policy 7.4. "Purchasing"
Process Owner: Chief Procurement Officer
Proper receiving procedures are critical to the purchasing cycle. The University will not pay for any purchase of goods or services unless the department certifies that the goods or services have been received and are satisfactory. Generally, the University may not prepay for goods or services not yet received, although the Chief Procurement Officer reserves the right to make exceptions in order to meet the business needs of the University. Failure to follow procedures described herein can cause damaged shipments to be accepted with no recourse, vendor payments to be delayed, and the University's loss of certain legal rights under the "Uniform Commercial Code" which governs these transactions. The department receiving the purchase is responsible for following these procedures when receiving goods or services, processing related damage claims, returning goods, or requesting payment for goods or services.
Shipments are only to be delivered to the department, unless authorized otherwise by the Purchasing department. Prior to signing the delivery receipt, the goods delivered should be checked against the delivery receipt and any discrepancies should be noted (such as the number of packages received compared to quantity shown on the carrier's delivery receipt, or any apparent damage to packaging or merchandise). Sign the delivery receipt, indicating the department name, date received, number of packages received, and any discrepancies. Have the driver initial and date any notation made on the delivery receipt. If any of the shipment is acceptable, prepare a partial Receiving Report.
2.1. Damaged Goods
If a department discovers damage while checking the goods received, the packing and wrapping materials (including names and addresses) should be preserved for inspection by the carrier. Departments must make arrangements with the vendor for inspection of the damaged material, file a damage claim, and return the goods if necessary. The carrier will not process a claim unless merchandise and packaging are inspected together. If potentially hazardous substances are involved, contact the University Safety & Risk Services Department.
2.1.1. The department must notify the vendor of any damaged or duplicate shipments within fifteen (15) days from receipt and request an inspection. Make a notation of the request for inspection on the packing list. Include the date the department made the request and the name of the vendor's representative. The following information will be necessary upon notifying the vendor:
- carrier's name;
- carrier's delivery receipt number;
- shipper's name;
- items damaged/nature of damage;
- invoice value of damaged items; and
- location where damaged items are being held for inspection.
2.1.2. After an inspection has been requested, the carrier has five (5) working days to make the inspection; otherwise the carrier waives the right to inspect. If this should occur, a standard claim form must be requested from the carrier. If the carrier elects to inspect the damage, an inspection report is completed and the department will receive the original.
2.1.3. For concealed damage, when no evidence of damage of any kind was apparent at the time of delivery, follow the procedures in Sections 2.1. through 2.1.2. herein. A request for inspection of damaged merchandise must be made as soon as the concealed damage is discovered.
2.2. Missing Items
Shipments that do not include all items indicated as "shipped" on the packing slip must be brought to the vendor's attention immediately. Request that missing items be shipped using the original Purchase Order number. The department and the University Accounts Payable Department must make certain that the vendor does not invoice twice for the same items.
2.3. Unordered Items
To return unordered items, contact the vendor and request a "Return Goods Authorization" (RGA) number and instructions for returning the unwanted items. After items have been returned, the vendor should issue a credit memo which cancels any previous charges for the returned items.
2.4. Excess Items
To keep any excess items the department must notify the Purchasing Department. Complete the Receiving Report noting that a modification has been requested.
The Purchasing Department should be contacted if a department continues to experience delay or other problems resolving a damaged, duplicate, or short shipment.
The department is responsible for following the procedures in this policy to ensure timely payment to the vendor. Payment shall be rendered in accordance with NMSA 1978, Section 13-1-158, to ensure that the goods or services have been received and accepted. The vendor should send the original invoices and credit memos for all purchases directly to the Accounts Payable Department; if an invoice or credit memo is sent to the department, the department should immediately send the documents to the Accounts Payable Department. Credit memos should receive the same departmental handling as invoices. Invoices for partial shipments must be processed promptly to ensure timely payment to the vendor and to prevent vendor delays in shipping the balance of the department order. Failure to promptly authorize and process partial payments for partial shipments will result in credit problems with vendors.
3.1. Receiving Reports
Receiving Reports notify the Accounts Payable Department that goods or services ordered have been delivered to and received by the department. The Accounts Payable Department must have an approved Receiving Report on file before payment is made. Departments should prepare the Receiving Report in LoboMart. The department should keep the packing slips in their files. The department should notify the Accounts Payable Department within five (5) days if any errors are discovered. The department should contact the vendor if goods received are damaged.
3.2. Payment for Services
Payment for services from "Independent Contractors" are processed through the Accounts Payable Department. Refer to UAP 4325 ("Purchasing Services Off Campus") for a thorough explanation of the types of services that qualify and the documentation required for payment. The department must notify the Accounts Payable Department that services have been received according to specifications by submitting a Receiving Report in LoboMart. The University must report payments for specific services to the Internal Revenue Service on Form 1099. Actual expenses incurred by an independent contractor are not 1099 reportable when original receipts are submitted for reimbursement. The individual must attach a signed statement itemizing expenses.
3.3. Stop Payments
The department must immediately contact the Accounts Payable Department if a payment must be canceled.