1. If signature authorization at the account level not feasible, authorizations should be handled at the sub fund center or PI level.
For maintenance reasons, authorizations for creating or changing requisitions are recommended at the sub-fund center (PI) level. If the user should not have the ability to requisition on all accounts in the sub-fund center, authorization may be handled at the cost object (account) level. Authorizations for approving requisitions are at the fund center level.
2. Generally dollar limits should not be imposed through the authorization process, but should be developed for selected purchases -- electronically.
This recommendation was based on old functionality when dollar amounts were not a consideration for release strategies. We can now use dollar amount to limit approval authority. There are four release strategies for DLC use. There is a strategy where everyone authorized to create a Req. can approve it; a strategy where two-level approvals are required regardless of dollar amount; and two two-level strategies that are triggered at different dollar amounts.
3. A set of roles or individual business tasks should be developed, which can then be combined into profiles in order to provide authorization to conduct various business tasks. Profiles should be used to facilitate authorizations, should be reviewed by DLC's and, DLCs should evaluate the feasibility of maintaining authorizations at the DLC level.
Profiles will be used to facilitate the SAP authorization process. We anticipate that the roles database will be used to facilitate maintenance at the DLC level, but further evaluation by the DLC's is necessary to determine that this is feasible.
The long-term strategy for use of the Roles Database is currently under review.
4. Access to purchasing activity on line must be restricted to sub fund center.
Academic Council has determined that purchasing data will be open for the whole campus.
5. Approvals should be minimized to the extent possible, but should include basic routing for up to 2 approvals within a DLC.
Agreed. Departmental Procurement team recommendation of two levels within a DLC level has been adopted. After a review by the Procurement Testing Team and the Authorization Focus Group, the two levels are defined as follows: Level 1 is defined as a user who is authorized to purchase up to a dollar amount. Level 2 is defined as a user who is authorized for all dollar amounts.
In addition to the Department approval and routing options, there will be automatic routing of some requisitions (determined by commodity classification or "Material Group") to other MIT Offices. For example, radioactive material will be routed to RPO [Radioation Protection Office], network equipment/computer consulting to VP/IS and sensitive items to CAO. Also, there will be a release strategy option for the DLC to perform special approvals on some restricted categories of purchases. The restricted categories will be compiled from recommendations of the Authorization Focus Group (AFG) and the approvals will be based on the "Material Group" field of the requisition. Although the AFG has not completed its recommendations, equipment is the one "Material Group" that all agree should be part of this special approval process. These DLC-specific approvals are in additional to the centrally mandated approvals by OSP or the Property Office.
While the goal of Management Reporting is to route radioactive material to Radiation Protection Office (RPO) and sensitive items to CAO, this capability is not yet in place due to the complexity it would cause in the maintenance of SAP release strategies. There will be a release strategy option for the DLC to perform special approvals on equipment. There will be an option in Model 1 Release Strategy when a DLC will be able to insert a level of approval for equipment. Equipment purchases will be based on the material group field of the requisition. The category of equipment was recommended by the Authorizations Focus Group.
6. Funds availability checking at the total Req. level, including indirect costs, must be given the highest priority.
Management Reporting is developing fund availability checking which will include both direct and indirect costs. Under discussion is the level at which the checking will occur: total budget, cost element group (object code group) budget, cost element (object code) budget.
Work on funds availability checking has been deferred by the Process Owners' Council. They decided that this feature will be delivered with the full implementation of the SAP Funds Management module.
7. Reqs to VPs should be minimized, with only networking and computer consulting reviewed by VP-IS and orders > $500K approved by Sr. VP.
The recommendations regarding the VP-IS will be implemented. The recommendation for approval by the Sr. VP was changed to $200,000 per order, not $500,000.
Later in the year, the threshold for approval by the Sr. VP was changed to $500,000.
8. Need clear policy on entertainment, flowers, food and alcohol expense. Process should be streamlined, with accountability in DLC's.
This issue will be addressed by policy and procedure revisions underway by the Controller's Accounting Office. A target date for when this will happen has not yet been established.
9. Purchasing should get access to COEUS and be trained to verify compliance with sponsor requirements, with OSP review as necessary.
Purchasing has been trained to use COEUS to determine sponsor requirements. OSP and Purchasing, through the initiation of the Procurement Testing Team, will be defining clear guidelines on sponsor purchases.
The Procurement Testing Team attempted to compose simple guidelines on approval requirements for sponsored-funded purchases. Ultimately, members from OSP and The Procurement Office discovered that the complex approval requirements and the Institute's dynamic funding instruments made this task impossible. Therefore, COEUS was installed on all the desktops in the Procurement Office., They are monitoring guidelines for the routine approvals. Off-line approval from OSP is obtained for the more unique purchases.
10. Internal providers should be encouraged to utilize the CO requisitioning system for ordering and billing of services. Evaluation of operating procedures for each internal provider must begin now. [CO requisitioning refers to the requisition functionality in the Controlling or CO module of SAP, as opposed to MM (Materials Management) requisitioning, which is where requisitions for purchase orders to external vendors are processed.]
The Internal Providers Team has recommended using a customized MM (Materials Management) Purchasing Requisition with Electronic Journal Voucher Billing. This solution provides commitment of funds to the account specified in the req., validation of requisitioner and account, and routing of req. for approval. The capability to send approved reqs. electronically to the internal provider will need to be developed.
Internal provider requisitions will receive approved requisitions daily via an automatic printing program, once the necessary hardware is purchased and installed. This should occur by 12/31/98. Providers are currently receiving requisitions and liquidating them. The Process Owners' Council is currently considering what office should "own" the internal provider requisitioning process.
11. Current procedures for purchasing animals should be retained over the near term, and the feasibility of implementing an electronic requisitioning system for ordering animals through the Division of Comparative Medicine (DCM) in the future should be evaluated.
Due to the complexities surrounding Institute and federal requirements, SAP will not be able to duplicate DCMs existing requisitioning system. However, a SAP requisition will be used to record commitments, and perform DLC approvals, but additional DCM paperwork will still be required.
(See item 10 above.)
12. The ability to obtain a DAPO at the header or requisition level rather than at the line item level within SAP is imperative, and how this will occur must be clarified.
Management Reporting, CAO, Purchasing and the Senior VP are reviewing DLC-based procurement options that are compatible with a purchasing environment that includes credit cards, and will work individually with those areas of the Institute that continue to require DLC-based procurement means other than the MIT credit card.
13. MIT should pursue MIT-wide contracts for use by DLC's in lieu of unit specific blanket orders, while allowing DLC specific blanket orders as needed.
Agreed and MIT-wide contracts will be in pilot by approximately the end of May, 1998.
MIT-wide contracts will be in pilot by the end of October 1998.
14. Paper Reqs. should be discouraged, but allowed, particularly for the stockroom, and should be redesigned to be compatible with SAP terminology.
Agreed, but no target date for the redesign has been established.
15. Retaining packing slips as proof of receipt should be abolished.
Federal standards currently require that source documentation (such as packing slips) be retained to support accounting records.
16. Change orders for payment of invoices [greater than] the requisition amount beyond the tolerance levels should be eliminated.
Change orders are needed for variances beyond the tolerance levels for several reasons. First, MIT must report to the Government the amount of business we do with small business, large business, woman-owned business, etc. This information is captured at the purchase order level. Secondly, if vendors have provided pricing under the purchase order agreement, they have a legal obligation to maintain that pricing. Purchasing should be involved for those transactions above tolerance levels to assure consistency in pricing.
17. Receipts associated with electronic parked invoices in SAP, which replace request for payment forms, should be retained in AP not DLC's.
The new process has not been established. We are still working on the best way to handle RFPs and will work with the DLCs to arrive at the best and least costly way to process the payment and store the documents.
18. Release strategies should be developed to maintain control for sensitive and restricted items.
The Procurement Testing Team has reviewed the current processes for obtaining Central approval of requisitions containing sensitive and restricted items. Our research has shown that only two of the central approvals are well suited for on-line approval. Purchasing will act as a filter for routing other central approvals as necessary. The two centrally controlled release strategies will involve items requiring the approval of the VP-IS (computer consulting and network purchases) and sensitive items requiring CAO approval (flowers, alcohol, food).
One central on-line approval will be used. Purchasing will act as a filter for routing other central approvals as necessary. The centrally controlled release strategies will involve items requiring the approval of the VP-IS (computer consulting and network purchases). See the appended information under item #5.
19. Property review procedures are OK. Electronic process should replace hand carrying Reqs to Property for review. A separate material group code (SMGC) should be assigned to equipment greater than $10K.
The Property Office will use online ad hoc reports in SAP for post event monitoring of equipment under $10K. If ONR does not remove the requirement to prescreen equipment over $10K, SAP release strategies will automate the Property Office's approval by using a combination of the equipment material groups and the line item totals.
See #5 for more information about "Material Groups."
The Property Office will not use automated approval of equipment at this time. They will, however, use the Data Warehouse to perform additional post event monitoring for equipment purchases.
20. AP procedures for consulting agreements are OK. A separate material group code should be assigned to consulting agreements.
The review procedures for securing the services for independent contracts were extensively reviewed by Subcontracts and CAO. The procedures are too complex to control by system functionality. Therefore, even where the requisition is created in SAP, manual routing between Purchasing and Accounts Payable will continue and material groups reclassification may be undertaken sometime in the future.
Manual routing between Purchasing and Accounts Payable will continue and material groups reclassification has been completed.
21. SMGC should be associated with "off the shelf" software licenses vs. unique software licenses, allowing for appropriate Intellectual Property Counsel review.
There is a SMGC for shrink-wrap software. The Procurement Testing Team met with IS to research ways we could facilitate this process. IS strongly recommended to allow Purchasing to filter software acquisitions first, and only forwarding those that require subsequent approval to IS.
22. A SMGC should be assigned for radioactive materials so that a release strategy can be developed to route Reqs to the RPO.
Agreed and implemented.
The automatic routing of radioactive materials will begin development after the completion of Rollout98 Milestone 4.
23. A SMGC should be assigned for respirators so that a release strategy can be developed to route Reqs to the EMS.
There will be a SMGC for respirators, but a release strategy will not be based on this SMGC. EMS will use reports to facilitate necessary recording and approvals.
The Procurement Office reviewed and revised all the material groups. They determined that an SMGC for respirators was not needed.
24. A list of authorized purchasers of hazardous chemicals, nitrous oxide and syringes should be kept in Purchasing to verify authorization upon receipt of orders in Purchasing.
The Procurement Testing Team is still reviewing this.
The Procurement Testing Team has completed their review. The list will be maintained in Procurement (formerly Purchasing).
25. A SMGC should be assigned to lasers so that a workflow can be established to notify RPO via email for post event monitoring.
Agreed that a SMGC will be established. RPO will be able to use standard SAP reports for post event monitoring.
26. Particular individuals in Purchasing should handle controlled substance purchases to assure compliance with regulatory agency policies, licenses, and forms. A SMGC should be assigned to controlled substances to facilitate routing to proper purchasing agent.
There will be a primary contact in Purchasing to handle these requisitions. However, one SMGC is not sufficient to capture all controlled substances and therefore multiple material groups for specific controlled substances will be used.
27. MIT should pursue development of electronic, Web-based requisitioning capability that would provide appropriate authorizations and controls and would feed directly into SAP.
An MIT-developed "Create Requisition" function, (a Web-based requisitioning capability) has been built and will be rolled out for general use by the MIT community in September 1998. A version of this Web-based requisitioning capability will be available in the very near future, but only for use with NECX (the successor to MCC).
An enhanced version of ECAT using the MIT-developed "Create Requisition" function and the appropriate SAP authorizations and controls will be first used with NECX this fall. Subsequently, the other ECAT partners will migrate to this new system.
28. Provide print capability for requisitions.
Print capability for requisitions is in production through the ZMIT (MIT-customized reports) menu.