Administration and Finance
Steven Chang / Interim Director of Procurement / (415) 338-2547 / email@example.com
Wednesday, February 1, 2017
Wednesday, September 28, 2022
PolicyStat ID: 11714239, CSU Contracts and Procurement Policy
To comply with the CSU policy requirement to develop and maintain practices, limits and procedures governing low-value purchase transactions where little or no value can be added by processing the transaction through standard procurement procedures. Campus practices shall ensure strong internal controls that mitigate procurement abuses, comply with Trustee policy, ensure observance of good business practices, and provide appropriate checks and balances.
A direct payment may be made for University obligations for which little or no value can be added by processing the transaction through standard procurement procedures. The preferred method for processing such transactions is the University Procurement Card (P-Card).
In cases where use of the P-Card is not feasible, a Direct Payment Request may be submitted for Allowable Transactions.
For transactions that are listed as prohibited, Pre-Approval for Direct Payment may be requested as discussed below.
If the transaction has already occurred, the invoice for the transaction will be processed as an Exception to Direct Payment request as discussed below.
An Allowable Transaction may never exceed $5,000.00 without Pre-Approval.
Typical examples of Allowable Transactions for Direct Pay include advertisements, postal and mailing charges, accreditation fees, books, journal subscriptions, publications, registration fees, medical exams, insurance premiums, utilities, membership fees, certification fees, etc. Transcription and editing fees provided by vendors working entirely off-site are allowable transactions for Direct Pay. In addition to approvals required by this Policy, direct payment of legal settlements and attorney fees are allowable transactions and the $5,000 threshold should not apply.
Apart from items specifically mentioned in the preceding paragraph, and unless a p-card is used in accordance with campus p-card policy, the acquisition of goods or services in any dollar amount is never an allowable transaction and requires a Purchase Order or a completed Pre-Approval for Direct Pay ServiceNow ticket. The acquisition of technology-related goods and services requires an additional completed and approved Technology Acquisition Review (TAR). Pre-approved technologies do not require a TAR. See Pre-Approval for Direct Pay below.
The following are prohibited uses of the Direct Payment process:
Payments to entities incorporated outside of the United States.
Payment for non-allowable services of any type, regardless of where the services are performed. No company or individual is authorized to provide non-allowable services in advance of approval from the Procurement Department in the form of a Purchase Order, signed agreement, or other written approval (e.g., ServiceNow ticket) authorizing the services.
Rentals of any type including, but not limited to, tools, equipment, off-campus space, busses and other transportation vehicles, party rentals, etc.
Pre-Approval for Direct Pay
For transactions that are listed as prohibited or those exceeding $5,000, Pre-Approval may be requested or accomplished in the following ways:
A valid unexpired contract, agreement, memorandum of understanding or other binding document executed between the vendor signed by the University Procurement Department constitutes acceptable Pre-Approval. A copy of the documentation must be attached to the Direct Pay Request in DocuSign.
Submit a Pre-Approval for Direct Pay Request through Procurement’s ServiceNow portal. The submission must include the following information:
Description of the transaction. If the transaction involves services, be sure to indicate if the services will be performed on campus or off.
Dollar amount of the transaction, including tax if applicable.
Vendor name and, if known, whether the vendor is existing (provide Supplier ID) or new.
If a ticket is responded to, approved and status is changed to “complete” by Procurement, the requester will need to route the Direct Payment Request form for signatures in DocuSign to initiate payment. In absence of an approved ticket or in case of a denial of pre-approval, the standard purchasing route of requisition to purchase order needs to be followed.
Exception to Direct Payment Requests
Exception to Direct Payment request is required when the procurement of goods and/or services is made by
department personnel outside the authorized procurement processes (purchase requisition, p-card, and direct
pay) and associated processes, and may be considered a personal obligation of the individual making the
purchase and not an obligation of the University. It is the responsibility of the party initiating the Exception to
Direct Payment Request Form to obtain all necessary approvals or authorizations. Neither Procurement nor
Accounts Payable is responsible for any payment delays caused by failure to comply.
An approved Exception to DPR can be accomplished as follows:
- The initiator is responsible for completing the Exception to Direct Payment Request form in DocuSign. The form must include:
- Supporting documentation (e.g., invoice or original receipt)
- An explanation for the Exception to Direct Payment request
- Description of the transaction
- Authorized signatures from someone with appropriate authority (i.e., Business Manager, Department Head or Chair, Dean or AVP), the appropriate Vice President or Provost, and the Vice President of Administration and Finance who must approve all Exception to DPRs before they can be processed by Accounts Payable.
“Direct Payment”, “Allowable Transaction”, “Prohibited Transaction”, “Pre-Approval”, “Exception to Direct Payment Request”