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Business and Operating Policies and Procedures
Policy 4.1 - Departmental Budgeting and Purchasing for Supplies and Equipment
Adoption Date: August 30, 2021 Revised
DEPARTMENTAL BUDGETING AND PURCHASING FOR SUPPLIES AND EQUIPMENT
Each department is responsible for submitting, justifying, and controlling its budget. Budgetary information is available online, and departments should normally use this method to obtain budget information. Upon special request, when this method is unavailable or not practical, a report of unencumbered balances may be sent to each department on a monthly basis.
CAPITAL OUTLAY CUTOFF DATE
Funds budgeted for departmental capital outlay items that remain unspent and unencumbered on February 15 each year will automatically revert to the respective fund. Funds budgeted for teaching supplies that remain unspent and unencumbered as of June 15 will also revert to the General Fund.
PURCHASING & P-CARD PROCUREMENT HANDBOOKS
When a need to purchase arises, please refer to the Purchasing Handbook and/or the Procurement Card Handbook in the Employee Handbook Appendix.
TEXAS SALES AND USE TAX EXEMPTION
The College is exempt from the payment of Texas Sales Tax and Texas Hotel Occupancy Tax. Please provide vendors with a Texas Sales Tax and Use Tax Exemption Certificate when you make any purchase or check into a hotel in the State of Texas. Exemption forms can be obtained from the Financial Accounting Department.
Because the College is tax exempt from certain Texas taxes, the College does not normally reimburse Texas Sales Taxes. An employee must always communicate the college’s tax-exempt status to a vendor via a Texas Sales and Use Tax Exemption Certification form or other number used by the vendor to identify the tax-exempt status of the college. Special care should be exercised when an employee initiates a petty cash or P-Card transaction to ensure that sales tax is not charged. In normal circumstances, if a vendor applies sales tax to a purchase, the employee must request that the vendor remove the tax.
In certain circumstances, if Texas Sales Tax is incurred (such as an emergency holiday or emergency after hours purchase), the College will pay and reimburse this tax to the vendor and employee when approval is obtained prior to the purchase by the employee from the District Chief Business Officer. If the original approval was made verbally, then it must be followed by written authorization to document the approval. If the transaction was made using petty cash, the written authorization must be submitted with the other purchase documentation when presented for reimbursement. If the transaction was made using a P-Card, the written authorization must be scanned and attached to the purchase transaction in the Well Fargo P-card portal and submitted with the hard-copy reconcilement report that is forwarded to Financial Accounting.
Unresolved sales tax repayments without prior authorization will be deducted from an employee’s pay checks by payroll deduction.
Employees may not negotiate, sign master tax exempt forms or request additional identification numbers with vendors. Because tax exempt purchases must be related to the college’s exempt functions, an employee may not use the college’s tax-exempt status for personal purchases.
PETTY CASH PROCEDURES
Petty cash funds for occasional purchases are available to college employees for small expenditures only when other means of purchasing are not appropriate or practical. The petty cash used for these expenditures must be disbursed from the site Business Office and is limited to $250. In extraordinary circumstances administrative cabinet approval may be given to exceed this limit and must be given in advance and in writing.
The use of petty cash to purchase is not intended to take the place of the district’s standard purchase order system and therefore should not be used on a routine basis. Allowable petty cash purchases are limited to immediate need situations where the ability to plan for the purchase was impractical.
Employees should use tax exemption certificates (available in the District accounting office) when making petty cash purchases. Sales tax will not be reimbursed. A receipt, invoice, or other supporting documentation must be presented to the business office not later than the next business day following the expenditure.
DEPARTMENTAL CHANGE ACCOUNTS
Selected departments may be issued small amounts of cash to make change for small cash receipts. Examples of this are the library to make change for book fines, Cosmetology to make change for cash pay customers, or concession stands to make change for cash purchases. These accounts are not to be used to make purchases for the college. Deposits must be made to the business office from these Departmental Change Accounts as required by College Policy and Procedures.
CONTRACTS
Contracts concerning agreements between the college district and vendors may be made only with the written approval of the President or Board of Trustees. Contracts for services to be performed by or for the district are to be signed by the President or designee. Refer to the Purchasing Handbook for additional details.
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