Purchase Orders - Requisitions - Open Commitments: Requisitions and Purchase Orders go onto the departmental budgets as Open Commitments of funding set aside for goods and/or services being purchased for the department. Since these set aside funds cannot be used for anything else, it is important to carefully monitor the status of open commitments.
The Requisition initially sets aside (encumbers) funds from the department's budget when a request is made to the Procurement Office to make a purchase. This transaction is a Pre-encumbrance in the PeopleSoft committment control process.
- Requisitions can be submitted to the Procurement Office electronically through the ePro On-Line Requisitioning function in PeopleSoft.
- The Requisition/Purchase Order process is required for ALL purchases over $5000.
- When a Requisition is entered, the system checks the department budget for sufficient funding. If funds are not available, there will be a process delay while the request is routed to the Budget Office.
- Once a vendor is selected, the Requisition should be removed from the account when the Purchase Order is written.
The Purchase Order remains on the departmental budget with the encumbrance amount being reduced as each payment is made.
- If the Purchase Order
is a commodity order,
- Invoices for commodity orders do not require department signatures. The Accounts Payable Office pays these invoices based on the Receiving information entered in PeopleSoft. Therefore, it is essential that the Receiving Department is notified if a commodity order is shipped directly to your office.
- If the Purchase Order
is a service order,
- Invoices for service orders require two authorized department signatures. The Accounts Payable Office pays these invoices based on the information provided on the coding block completed by the department. It is essential that the coding block specify partial versus final payments.
Open Commitment Status - Monitor to Eliminate Any of the Following:
- The Requisition and the Purchase Order are both on the department's budget. The requisition is supposed to be removed when the purchase order is written. If it isn't, your department is being charged twice for the same item.
- A dangling encumbrance. Sometimes goods or services are received and invoiced but the invoice amount is different - less than the purchase order balance. If the computer is not told that the invoice is FINAL, that difference will dangle out in the system tying up your funds until someone cancels it.
- Expired Purchase Orders. Sometimes there are two or more purchase orders to the same vendor. A new order may have replaced the old one, but the old one was never canceled.
- A Purchase Order has a balance that you know has been paid. When submitting an invoice, you must make sure to put the purchase order number in the coding block. If an invoice is paid without referencing the purchase order, the open commitment is NOT reduced. As a result your department is charged twice, once for the invoice and once for the open commitment.
If any of the above are found on a departmental budget, please contact firstname.lastname@example.org or call the Procurement Office at 410-704-2171.
It is important to call promptly because the funding may be lost if any of these situations are left on the department's budget until the end of the fiscal year.