Business Services
BUSINESS SERVICES POLICY AND PROCEDURE DOCUMENT (BSPPD) # 11
LOW DOLLAR ORDER PROCESS
(Revised August 1, 2001)
The Low Dollar Order (LDO) process provides departments a mechanism for directly ordering commodities and services from external vendors. The LDO process is to be used for purchases of up to $5,000 including freight and tax where applicable, when use of a Purchasing Card is not applicable. The proper use of the LDO process should assure that the receiving, delivery, and payment process work smoothly and that good vendor relationships are maintained.
The PURCHASING CARD is the preferred method for obtaining goods and services of up to $5,000. The LDO process should be used when a departmental employee assigned a Purchasing Card is not available or the vendor will not accept the card.
The UWEX Purchasing Department will not prepare formal purchase orders for purchases of up to $5,000 including freight and tax where applicable.
THE LDO WILL NOT BE ENCUMBERED. All vendor payments against LDO's will be processed as "direct" charges.
Departments may obtain commodities and services from vendors without the advance submission of a LDO form. Vendor invoices of $5,000 or less can be coded for payment and processed as direct charges (a confirming LDO form is not required).
Low Dollar Order Form
Low Dollar Order forms are available from UW-Extension Accounting Services, Room 104, Extension Building. It is important that all information requested be included on the order form. Incomplete orders may cause delays in payment processing or receiving problems. The person designated on the LDO form should handle all contact between the vendor and the University. The prompt distribution of the LDO form is critical. Without a copy of the LDO, Accounts Payable staff will not be able to process vendor invoices for payment. Alterations or modifications shall not be made to the terms, conditions, or format of the LDO form without the approval of the UW-Extension Purchasing Department.
Instructions for Completing LDO Form
- Enter complete and accurate accounting coding - (fund, project/grant, division, department, program, account).
- Use CURRENT AND COMPLETE VENDOR ADDRESS including street, city, state, and zip code.
- Provide a complete "ship to" address - department name, building name/room number, street, city, state, and zip code.
- Provide departmental CONTACT PERSON'S NAME AND PHONE NUMBER, including area code.
- Provide as complete a description as possible of the commodity/service being requested. The item number, quantity ordered and unit (i.e., each, boxes, lbs., cases, etc.) should be specified. Also, include the unit price - the unit price multiplied by the quantity ordered should equal the amount.
- Total order CANNOT EXCEED $5,000 (INCLUDING FREIGHT AND TAX).
- The Department Chair or delegated designee must sign the LDO.
- Check appropriate box when a minority vendor is used.
Distribution Instructions
When a LDO is used for ORDERING commodities/services:
- The white original (top copy) should be mailed to the vendor.
- The yellow and pink copies (lst and 2nd copies) should be sent to Accounts Payable, Room 104 Extension Building.
- The goldenrod copy (3rd copy) should be kept on file by the department preparing the order.
When CHECK must be enclosed with the ORDER:
- Send original with 1st and 2nd copies to Accounts Payable.
- Clearly indicate on LDO "CHECK REQUIRED WITH ORDER."
- The price must be verified (including shipping costs, etc.) and written documentation of the vendor requirement for "check with order" must be attached.
- Accounts Payable staff will forward the original LDO and check to the vendor unless alternative instructions, (i.e. "hold check and LDO for pick up") are provided.
- If the order has already been issued and the vendor notifies the department that prepayment is required, have the vendor return the ORIGINAL VENDOR ORDER and forward it to Accounts Payable (add notation "check required with order"). If the original Vendor Order copy can not be returned, have the vendor cancel the order and prepare a new LDO and forward the same as indicated above.
Note: Prompt distribution of copies is necessary to assure timely delivery of merchandise and vendor payment.
Purchases Not Requiring A LDO Form
At the discretion of the vendor, departments may purchase goods/services with a cost of $5,000 or less (INCLUDING FREIGHT AND TAX) without the requirement of a written order. Under such circumstances, the following procedures should be followed:
- The vendor must be instructed to send the invoice to the acquiring department.
- The invoice must be date stamped (for prompt payment purposes).
- The invoice must be checked for accuracy.
- The coding string must be clearly displayed and include year, fund, project/grant, division, department, program and account.
- The invoice must have the approval signature of a staff person authorized to sign on behalf of the department.
- The original and two copies of the invoice should be sent directly to Accounts Payable, Room 104 Extension Building.
- A copy of the invoice should be kept for departmental records.
State "Prompt Payment" regulations require the timely processing of all invoices. Invoices should be coded, signed and forwarded to Accounts Payable within seven (7) days of receipt. In the event of an improperly submitted invoice or a good faith dispute, the vendor should be promptly notified.
Cancellation of Low Dollar Orders
Cancellations of completed LDO forms, which have been received by vendors, are to be handled by the ordering department and are to be made in writing. It is recommended that a telephone call be made to the vendor (prior to sending the cancellation correspondence) verbally canceling the order. A copy of the written cancellation notice should be sent to Accounts Payable.
Contractual Signature Authority
All procurements that require a signed contract must be sent to the UW-Extension Purchasing Office, Room 104 Extension Building, for the proper signature authority.
Taxpayer Identification Number (TIN)
To be in compliance with Federal law, the University must maintain records for all entities that are service providers to the University. The records must verify the entity's type of organization and its Taxpayer Identification Number. If the collective total of all fee payments on a calendar year basis to an unincorporated entity is $600 or more, the University is required to issue a form 1099 to the IRS.
All payments to independent contractors that are individuals should be processed by completing a "Payment to Individual Report" (PIR). The individuals Social Security Number must be entered on the PIR form.
Business vs. Personal Purchases
UW-Extension employees are expected to use good judgment regarding the necessity and the appropriateness of all purchases charged to University funds. It is important to be conservative about what constitutes a business-related use. Items that are personal in nature such as flowers, greeting cards, etc. should not be purchased with University funds. Items such as coffee pots, microwaves and refrigerators kept in common areas (not in individual offices) and have at least part of its purpose to be able to serve the needs of guests may be purchased with University funds. Office decorative items, including pictures, can be purchased with University funds only if they are to be used in common areas, i.e. meeting rooms, reception areas, etc.
Equipment
Contact staff in the UW-Extension Purchasing Department before purchasing any major equipment item (furniture, fax machines, etc.) to ascertain whether the item is available from a state/university contract or a minority vendor.
Computers/Software
Staff in the UW-Extension Purchasing Department should be contacted prior to purchasing computer hardware and related peripheral equipment (printers, software etc.) to determine if there are contract or minority vendors who should be used. If the computer hardware/software will be installed on a local area network (LAN), contact the appropriate LAN Administrator to determine compatibility. For the InfoSys1 LAN contact the "Help" line (262-5034).
Office Supplies
Departmental office supplies not purchased internally from UW-Madison Materials Distribution Services should be purchased from the mandatory state contract vendor (currently Boise Cascade). A Purchasing Card should be used to the extent possible.
Printing
Since state rules regarding purchases of printing services from external (private) vendors are very restrictive, UW Printing Service Centers should be used for printing related services. The LDO process cannot be used to procure printing services from a private vendor without the expressed approval of a UW-Extension Purchasing Agent. These restrictions do not apply to camera-ready copying services.
Advertising
When placing an advertisement with Madison Newspapers, notify them that you are part of State Agency #25. They are a contract vendor and discounts apply.
Tear sheets (which include date of ad) are required for the payment of all print advertising.
Note: Both Madison Newspapers and the Milwaukee Journal/Sentinel accept payment via the Purchasing Card.
Travel
The LDO process cannot be used for individual employee lodging and meal expenses. Individual employee meal and lodging expenses should be paid directly by the employee and reimbursed by submitting a Travel Expense Report form. Airfare charges and registration fees for employees can be paid through the LDO process.
The use of minority travel agencies is encouraged. See the UW System web site for a list of travel agencies. (Certified minority vendors are marked with an asterisk.)
UWEX Sponsored Meetings, Conferences, and Workshops
A completed UWEX Sponsored Events Form and any other documentation required under UW Systems Travel Regulations and UW-Extension Business Services Policies and Procedure Document (BSPPD) #7B must be attached to invoices involving group lodging, meals, and refreshment breaks.
UW System Travel and Lodging Regulations require that costs incurred by UW/State employees for lodging and meals not exceed state maximums. The costs for refreshment breaks should be reasonable.
Headquarters City Employees - The written approval of the Department Head/or above is required to process invoices for meals and refreshments by employees within their headquarter city (not on travel status). Note: This can be accomplished by having the Department Head sign either the LDO form or invoice.
Memberships, Registrations, Subscriptions and Publications
The LDO process may be used to process payments for memberships, subscriptions, and registrations regardless of dollar amount. Generally, these are "cash with order" transactions requiring the attachment of supporting documents which must be sent to the vendor with the payment. The LDO form should be completed to facilitate clear communication of:
- the coding to be charged
- the vendor's mailing address
- the department's mailing address
- the item(s) being procured
- the total amount of the order.
"Cash with order" transactions should be sent to Accounts Payable, Room 104, Extension Building
A Purchasing Card should be used to the extent possible.
Maintenance Agreements
Maintenance agreements of $5,000 or less may be processed using the LDO form and include a description, serial number and location of the equipment to be maintained. If the vendor requires a contract, it should be sent to the UW-Extension Purchasing Office for the proper signature authority.
Insurance and Risk Management
Vendors performing the high-risk services listed below are required to have a certificate of insurance document on file in the UW-Extension Purchasing Department before services are performed. Please contact UW-Extension Purchasing Department staff to determine if the selected vendor has a certificate on file or if a certificate needs
- Custodial Services
- Day Care Services
- Manual Food Service
- Medical Services
- Recreational Services
- Security Services
- Transportation Services (of people)
- Travel Services (tours)
Certificates of insurance are also required from vendors prior to the start of technical services (i.e. electrical, mechanical, etc.) on state owned property or UW-Extension facilities.
Contract and Minority Vendors
The use of contract and/or minority vendors is strongly encouraged. Contact Purchasing Department staff for information on contract and minority vendors. Please refer to the UW-Extension Business Services (Purchasing) Web site for minority vendor information.
Low Dollar Purchases Requiring Prior Approval
See Appendix 2 for items that cannot be purchased without the prior approval of UW-Extension Purchasing Department staff.
Serial Purchasing
The splitting of orders to circumvent State and University Purchasing procedures (which may require competitive bidding) is not allowed.
Purchasing Card
Again, the Purchasing Card is the most efficient and the preferred method of obtaining goods and services of up to $5,000. The LDO process should be used when a departmental employee assigned a Purchasing Card is not available or the vendor will not accept the use of the card.
Contacts
- Bob Kuykendall, Director of Purchasing, 608-262-0164
- Dick Intlekofer, Purchasing Agent, 608-262-1796
- Bob Price, Director of Accounting Services, 608-262-1979
- Aggie Trzebiatowski, 608-265-6787
APPENDIX 1
LOW DOLLAR ORDER PROCESS
ITEMS REQUIRING INSTITUTIONAL APPROVAL PRIOR TO PURCHASING
- Air Conditioners, Heating and Ventilation Equipment
- Alarm Security Systems
- Alcoholic Beverages (Allowable if in compliance with UW System Travel Regulations XIV.F.2)
- Ammunition/Weapons
- Animals
- Architectural & Engineering or Design Services
- Cash Advance (ATM Machine)
- Cellular Telephone Service
- Computers
- Controlled Substances
- Copy and Fax Machines
- Cylinder Gases
- Drugs/Pharmaceuticals
- Entertainment
- Furniture and Carpeting
- Hazardous Materials Removal
- Legal Services
- Motor Vehicle Purchases or Leases
- Personal Services Payments to an Individual (A PIR form should be used)
- Printing Services
- Security Guard Services
- Space, Real Estate Leases & Rentals
- Temporary help agency services
THE ABOVE ITEMS CANNOT BE PROCURED WITH THE LDO PROCESS WITHOUT THE ADVANCED APPROVAL OF UW-EXTENSION PURCHASING DEPARTMENT STAFF.