1.04

Authority to Obligate PRO

POLICY OVERVIEW

The University of Texas Health Science Center at Houston (UTHSC-H) designates Procurement as the official purchasing agency ^a of the institution. This function entails the following responsibilities:

• authorizing the obligation of institutional funds for the purchase of supplies, materials, services, and equipment;
• initiating procedures that will facilitate and expedite the purchasing function;^b
• delegating the authority to obligate when adequate procedures exist and circumstances warrant it; and
• activity as the university's official contact with the General Services Commission (GSC), formerly the State Purchasing and General Services Commission .^c (The purchase of certain commodities requires the participation of the GSC as final purchasing agent, working in conjunction with the designated UTHSC-H agent.)

The designation of Procurement to fulfill these institutional objectives accords with legislative^d as well as regental mandate and permits the UTHSC-H to conduct its purchasing activities in a competitive and economical fashion. An equally significant element of this design is that it enables the UTHSC-H to document, justify, and account for the expenditure of public funds.

Under the terms of this policy, the UTHSC-H assumes no liability^e for an obligation of institutional funds that fails to comply with the established policies and procedures of Procurement. Individuals whose responsibilities include the obligation of institutional funds are expected to become informed about--and work within the framework of--approved purchasing practices as described in this Handbook and in other departmental publications. Failure to abide by these practices, whether the result of ignorance or of deliberate misconduct, may result in financial liability and/or disciplinary action for the individual concerned.

PROCEDURE

Through the agency of Procurement, the UTHSC-H possesses a centralized, integrated structure that carries out commercial buying activities with maximum economy while adhering to the regulatory legislation to which the UTHSC-H is subject. Procurement publishes procedures for employees to use in implementing purchasing transactions. (Also refer to Chapter 13 of this Handbook for procurement policies.)

I. General Communications

All communications (both oral and written) regarding the acquisition of goods for the UTHSC-H with either the GSC or the vendor community are to be made through the authorized purchasing representatives of the UTHSC-H. Under no circumstances may a department initiate a relationship with a vendor for the purpose of expediting an order; all communications of this nature are to be directed to the attention of the authorized procurement representative. Apart from the special circumstances described below, any exception to these regulations requires prior authorization from the Chief Financial Officer (CFO).

II. Special Circumstances

A. Vendor Contact Regarding Repairs

Once a purchasing transaction is complete (after the purchase order is issued) any difficulties that arise relating specifically to equipment repair or servicing may be pursued directly with the vendors by the individual departments concerned; however, these difficulties must be reported to Procurement and documented in order to permit the institution to respond emphatically and consistently to vendors who provide inferior equipment or service.

B. Small Order Transaction

The small order (SO) transaction is an example of the delegation of the authority to obligate from Procurement to other agencies within the UTHSC-H. This transaction places departmental personnel in direct contact with prospective vendors regarding the purchase of goods or equipment. Departments routinely use the small order process to accommodate the acquisition of relatively small items (less than $900 in total cost). For more information on how to enter a small order transaction into the financial system, refer to the Purchasing and Payment Procedures .

III. Procedures

A. See Chapter 13 for detailed policies and procedures.

B. Ratification of Unauthorized Commitments

In exceptional circumstances, UTHSC-H may ratify purchases processed outside the terms of this policy:

• if the department has already accepted the goods or services;
• if the purchase would otherwise have been approved if it had been procured within UTHSC-H policies/procedures; or
• if the department can produce documentation of best value and price determination.

Once university authorities become aware of an unauthorized purchase, the head of the department/school will be notified.

The department head/dean must request the ratification of the unauthorized purchase by the CFO by submitting a form and justification documentation as well as any proposal or bid information received from the contractor to the Director of Purchasing.

The Director of Purchasing will prepare the documentation for the Purchase Order file to verify that the purchase, if made through proper channels, would otherwise have met the statutory requirements and recommends ratification to the CFO if appropriate.

The CFO ratifies the expenditure by signing the form.

In cases where the CFO does not approve, the department head and/or the employee who made the request may be personally liable for the purchase(s). The employee may be subject to disciplinary action up to and including termination.

^a Board of Regents, UT System, Rules and Regulations, Series 10501, Delegation to Act on Behalf of the Board.

^b Id.

^c Id.

^d State Purchasing and General Services Act, Tex. Rev. Civ. Stat. Ann. art. 601b., Section 3.06 (Supp. 1988).

e Board of Regents, UT System, Rules and Regulations, Series 10501, Delegation to Act on Behalf of the Board.

Updated 08/05; 08/07