This procedure outlines the criteria, process and timelines for the centralized payment processing of vendor invoices, Purchasing by-law Schedule B payments, refunds for overpayments, grants, deposits held on account or property tax adjustments, corporate credit card purchases, mileage for non-employees and petty cash replenishment.
This procedure applies to all employees who have the authority to act as buyers on behalf of the corporation and in that capacity have purchased goods or services to be used in the delivery of town services or have authorization to approve expenses or refunds. Authorization of expenses or refunds must be in the form of an electronic receipt or hand signed. Signature stamps will not be accepted as approval.
Payment of vendor invoices:
- Purchases must be made in accordance with the Purchasing by-law.
- Purchases must have a purchase order, identified by a system code (either an OP, OU or OS) entered, approved and received in CIS, with the exception of Schedule B’s and, in some cases, blanket order related purchases. See Schedule B Payments section of this procedure. See also Blanket Purchase Order section of this procedure.
- Purchase orders should be received in CIS by the department who ordered the items as soon as the goods/services are received.
- Vendor invoices must be sent directly to Accounting Operations by the vendor, preference would be to receive electronically to Accounts Payable (AP) email.
- Vendor invoices must clearly indicate net amount of purchase, plus freight or administrative charges, and applicable tax amount and applicable business number.
- Vendor invoices must clearly state the purchase order number (OU, OP or OS) if applicable.
- Invoices will be sent electronically to the department approver via the Town’s AP system in situations where:
- The receiving has not been completed;
- There are discrepancies between the receiving information and the invoice;
- There is no relevant purchase order information.
- Departments will approve invoice for payment or advise to hold if services not approved.
- Vendor invoice must match the purchase order in the system and be received by department staff before payment will be made.
- Payment terms for vendor invoices is net 30 days, unless a discount is offered.
Vendor invoices covered by a blanket purchase order
- All blanket purchase orders issued will describe in detail the agreed upon process for paying invoices.
- Monthly invoices for costs that are charged to the same account and are for the same amount each month will be processed automatically without approval from the department as long as the invoice matches the approved blanket order in effect. Accounting staff will use the account number provided on the blanket order.
- All other purchases covered by a blanket order require a small purchase order (OU) to be created, approved and received before the invoice can be paid.
- Blanket orders which affect multiple departments will be consistently charged to the same object code.
Purchasing by-law Schedule B payments
- Schedule B purchases are noted in the Purchasing by-law.
- Requests for payment must be in the form of a vendor invoice or cheque requisition, clearly indicating the amount plus any applicable taxes.
- Cheque requisitions are only to be used if no invoice is available. The requisition must clearly state the payee, full address and HST Registration Number and/or SIN, if applicable.
- Payment requests must be approved by staff with authority to approve payments.
- The appropriate account number must be assigned to the invoice or cheque requisition.
- Payments will be processed in a timely manner on the next available cheque run. Real estate purchases will be processed once a Property Acquisition or Disposal Form is completed.
- Utility invoices for Oakville Hydro and Union Gas are received in Accounting Operations and processed without departmental approval. The date of utility reading is used as the General Ledger (GL) date.
- Accounting Operations maintains a detailed listing of all utility accounts, including the address of the property attached to the utility account number and the GL account number, including subledger, appropriate for that billing.
- Automatic payment withdrawals from the Town’s Utility bank account are processed by Oakville Hydro and Union Gas.
- Uploads to the GL are done monthly based on invoices received from Oakville Hydro and Union Gas and include both consumption units and dollar values.
- Monthly bank reconciliations are done on the Utility bank account to ensure that the Town’s records match what has been withdrawn from the bank.
- As departmental approval is not required for utility invoices, departments should utilize the GL to view detailed consumption and utility expenses on a regular basis. Expertise of staff in Facility and Construction Management Department, Environmental Policy, or the individual utility company can be utilized to do further analysis.
- Requests for refund payments must be done through a cheque requisition, which must be approved by appropriate staff and assigned an account number.
- The cheque requisition must clearly indicate the payee’s name and full address.
- Requests for refunds of deposits, credits on account or tax adjustments will be processed and paid as soon as possible.
- CLASS refunds from Recreation and Culture will be processed via electronic upload to CIS from CLASS.
Corporate credit card processing (PCOS)
Refer to procedure for Purchasing Card Operating System (PCOS).
Mileage for non-employees (employees’ mileage refer to payroll)
- Mileage forms must be completed by the individual requesting reimbursement.
- The current mileage rate, as provided by Payroll Services, must be used.
- An appropriate account number and the mileage object code must be indicated on the form.
- The form must be signed by the requestor and approved by the appropriate supervisor/manager prior to being sent to Accounting Operations.
Petty cash replenishment
Refer to Petty Cash procedure.
- If the payment is to an individual, either directly or through an organization, then a SIN (Social Insurance Number) must be provided as per Canada Revenue Agency (CRA) requirements.
- Vendors must provide their HST Registration number before payment is issued. In the event that a vendor does not charge for HST, Accounting Operations will determine if follow up is required with the vendor to ensure that they fall under the CRA small supplier exemption.
Timing of cheque runs
- Accounting Operations will perform a weekly cheque run.
- Each week’s cheque run will include all payment requests received by the end of the previous week.
- Vendors paid by Electronic Funds Transfer (EFT) receive an email notification of the payment. Printed cheques are mailed to the address on the invoice/requisition. Departmental staff cannot distribute cheques to vendors. Exceptions must be approved by the Manager, Accounting Operations.
- Emergency cheque requirements will be considered on an exception basis and must be approved by the Manager, Accounting Operations.
- Vendors are encouraged to receive an EFT as opposed to a cheque.
- If a cheque is issued for the wrong amount, to the wrong vendor name, as a duplicate payment or was never received by the vendor, the cheque must be cancelled and re-issued.
- If the cheque has been released to the vendor, the Stop Payment procedures must be followed, before the cheque can be cancelled in the system and re-issued.
Stop payment process
- If it is determined that a cheque has been released in error, or has never been received by the vendor, Accounting Operations must determine whether the cheque has been cashed. This is done by checking in CIS if the cheque has been reconciled and, if not, reviewing the online bank statements up to the current date to ensure that it has not been cashed since the last cheque reconciliation process was run. If the cheque has not been cashed, a stop payment must be registered with the bank for the cheque.
- Stop payments can be registered with the bank by either the Banking Analyst or the Manager, Accounting Operations.
- Once the stop payment has been registered with the bank then the cheque can be cancelled in CIS and re-issued as required.
- The Town maintains a US bank account for purposes of paying vendors in US funds.
- US vendors are set up in the CIS address book to be paid in US funds.
- All purchases with US vendors must follow the purchasing by-law.
- CIS automatically books the exchange rate, so that the GL reflects the expense in Canadian dollars.
- The exchange rate in CIS is determined by the rate in effect when the US funds are purchased to replenish the US bank account.
- US cheques are reconciled weekly and the bank reconciliation is done monthly.
Certified cheque requests
- The Town does not provide certified cheques.
- In place of a certified cheque, the Town will do an EFT providing the banking information is made available to the Town to do the transfer.
CIS: Oakville’s Corporate Information System which holds all financial transactions
EFT: electronic Funds Transfer; funds are transferred from the Town’s bank account to a third party’s bank account utilizing an electronic transfer instead of a cheque
OP, OU, or OS: CIS system codes used for purchase orders. OP amounts are for orders greater than $25,000; OU amounts are for orders from $1 to $24,999; OS are for all inventory purchases.
PCOS: Purchasing Card Order System refers to the town’s corporate credit cards
Schedule B – schedule within the Purchasing by-law which lists the purchases which do not require a purchase order to be issued.
The following are responsible for:
- Being in compliance with the Purchasing by-law.
- Generating a purchase order for those purchases not covered by Schedule B of the Purchasing by-law.
- Purchases under Schedule B, approving the invoice, assigning an account number, or completion of cheque requisition in lieu of an invoice, including the appropriate approval and account number.
- Obtaining a SIN number where required.
- Monthly reconciliation of the cardholder activity statements, attachment of the appropriate supporting documents and signatures (PCOS cardholders).
- Managers, supervisors and directors are responsible for approving all purchases made either electronically through the purchasing system, the accounts payable system, or on a cheque requisition.
Ensuring they receive authority by way of a purchase order for all goods or services they provide to the Town and providing their invoices (preferably via email) directly to Accounting Operations.
- Processing all invoices in a timely manner, ensuring that proper authority to pay has been received, and that a correct account number has been assigned.
- Reviewing all PCOS packages for completeness including appropriate receipts being attached, correct taxes, correct account numbers and signatures provided.
- Filing (electronically or printed) all accounts payable and PCOS expenditures in a timely and organized fashion within the Financial Operations vault for safe keeping. This shall be deemed the corporate filing for audit purposes.
- Retrieving off site records in a timely manner to support departmental requests.
- Reconciliation of all accounts payable accruals, clearing accounts and received not vouchered balance sheet accounts.
- Ensuring that the CIS accounts payable module is available to support any inquiry or reporting requirements
- Ensuring that the town maximizes its HST rebates available under legislation.
- Ensuring new vendors are aware of the option for EFT payments.
Purchasing and risk management:
- Reporting all non-compliance of the Town’s purchasing by-law and purchasing procedures and policy to the individual, and/or SMT and/or EMT as required.
- Bringing any fraudulent purchases or concerns to the attention of the Deputy Treasurer, Financial Operations, Manager, Accounting Operations, and/or Internal Auditor.