Arthur Andersen Report - Shared Services Business Case (Attachment 1)

Arthur Andersen Report

Shared Services Business Case

ATTACHMENT 1: SHARED SERVICE CENTER PROCESS FLOWS

The Shared Service Center Purchasing and Disbursements Process

This process flow has been redesigned under the assumption that the Oracle implementation has been successfully completed. The new system allows for the reduction of both cycle times and transaction volumes by creating a seamless electronic process.

A. Requisition

At each campus, the initiating department creates an electronic requisition form. This form is electronically forwarded to that department's fiscal officer, who checks for fund availability and reserves the funds if they are available. If no further approvals are required, the buyer can access the requisition and begin creating the purchase order. If further approval is required, the purchase request is routed using workflow as appropriate. At any time during the process, the initiator can access the system to check on the status of the request.

B. Purchase Order

Buyers access purchase requests through the system as part of their daily activity. All items covered by preestablished blanket orders and items less than the Board-approve bidding threshold proceed immediately to purchase order generation. For all other items, the Buyer prepares and distributes the necessary bids. Once quotes are received from the bidders, the Buyer reviews the quotes and awards the purchase order to the bidder with the lowest price that meets the specifications. If the quotation amount is greater than the amount listed on the requisition form, the Buyer must ensure funding availability and encumber the additional funds. A Purchase Order is then created electronically, utilizing information directly from the requisition, and queued until a scheduled processing cycle time. The Purchase Order is then sent to the vendor with specific instructions for delivery, especially in cases in which Purchase Orders have been combined. As purchase orders are processed, the system generates a receiving report that is distributed electronically to both the initiating department and the central receiving location at the respective campus.

C. Receiving

The person receiving the goods from the vendor electronically notes their receipt in the system. The receiver is either the initiating department or the central receiving location on the campus, depending on the arrangement negotiated with the vendor at the time of purchase. Record of the receiving report is stored electronically in the disbursements system, awaiting a request for payment of the received goods.

D. Invoice Processing

Once the SSC receives a bill from a vendor, the transaction information is recorded electronically on an invoice voucher. The system then conducts a match procedure to pair the invoice voucher with the purchase order and receiving report. The invoice voucher is compared to the Purchase Order and Receiving Report for consistency in vendor information, items and quantities purchased, and dollar amounts of the transaction. If all forms are in agreement, the check generating process is initiated. If there are differences between the documents, an exception report will be generated with the nature of the error. This error must be reconciled with the Purchasing, Receiving and initiating departments. Once resolved, Disbursements staff enters any necessary changes and approves the transaction for payment. The procedures for invoices generated without a pre-existing purchase order are similar.

E. Check Processing

All approved payments will be compiled by the Disbursements system until the next check processing cycle is completed. Check processing cycles will be reduced from their current rate of one per day. All payments to a single vendor will be grouped in one single check, regardless of which campus is making the payment. The check will detail each transaction being paid, in order to indicate to the vendor the division of funds enclosed. Disbursements will continue to issue checks for employee payroll, and third party payments. Payroll check processing will operate on a regularly scheduled basis independent of vendor check cycles. These payroll checks will group any reimbursement sums due to each employee together with regular and overtime pay. All University payments will be tracked within a single chart of accounts in the same fashion, to ensure proper allocation of funds between the campuses and their departments.

Additional Responsibilities

In addition to the process flow described above, the following functions will also be performed by P&D personnel:

Purchasing

Interview vendor representatives and review special needs of products as necessary

Review and update contract and insurance information to ensure conformity with University policies

Supervise the conversion of state appropriated funds at the end of each fiscal year

Conduct seminars on purchasing policies and procedures for the entire University

Prepare and distribute Board of Trustees reports

Represent SIU at IPHEC

Attend trade shows and seminars

Surplus Property

Manage the storage and redistribution of surplus commodities and equipment as obtained from University departments and State and Federal Surplus Property programs

Serve as a clearinghouse for all University owned property as declared surplus by the individual departments before sales, trade-in or condemnation

Central Receiving

Manage receipt of all inbound shipments, the handling of outbound shipments, and the delivery of merchandise received to the ordering department

Forward furniture items to Plant Operations for uncrating, assembly and delivery

Expediting

Prepare moving expense reports for newly appointed staff and faculty members for whom the University has assumed a portion of the expense

Disbursements

Ensure that documentation for non-resident aliens is in compliance with all regulations

Process travel vouchers

Conduct seminars on disbursement policies and procedures for the entire University