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last updated: 8th August 2011

There must be a clear system for showing which staff within the institution (or individual departments) are authorised to carry out the various financial-based activities and to what level (in monetary terms) they can commit budgetary expenditure.

Within procurement, there have traditionally been four main approval activities

  • budgetary (to approve the use of a Cost Centre's funds); 
     
  • purchase (to approve the actual purchase eg signing and issuing the official purchase order); 
     
  • delivery (to confirm that the correct goods or services have been received); and 
     
  • payment (to approve the payment of the related invoice and the release of funds from the named Cost Centre). 
     

However, as e-procurement is implemented there may be a less obvious separation of duties (at least in paper terms).  In this modern environment, the creation and authorisation of the electronic order will initiate the transaction.  Receipt of the goods/services will be recorded on the purchase order processing/financial system, which will then electronically match with the supplier's electronic invoice.  The system will then make payment to the supplier at the appropriate time.  'Paper' signatures will therefore, only be evident at, possibly, the budgetary (requisition) stage and at the delivery stage on the paper delivery note received with the goods/services. 

An Authorised Signatories List should be maintained detailing the names of staff authorised to fulfil the various roles within the purchase - payment process.  As e-procurement methodologies become more commonplace, the need for each of the specific approval stages should be assessed within your institution and changes made as necessary.

Responsibility for the accuracy and appropriateness of the named signatories, normally, rests with the Head of Department within which the individual Cost Centres sit. The Head of Procurement should normally endorse the staff with delegated purchasing authority as they will be approving and issuing purchase orders on behalf of the institution
 

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