Payment Section Accounts payable process begins with receiving an lpo/invoice and ends up with issuing payment to supplier.
The standard set of activities for processing an invoice for payment includes:
- Stamp all purchase orders with date of receipt
- Sign off and date Department’s registration book as confirm of purchase order received by the payments section
- Place daily submission in inward tray in date received order
- Distribute purchase orders daily to senior payments officer and payment officers.
- Follow strictly the department of finance monthly computer schedule for cut off and vendor’s cheque run dates.
Invoice and Documentation
- Vendors original invoice must be attached to the purchase order
- Invoice must be on professional stationery indicating vendor name, vendor address, vendor telephone contact, invoice number, invoice date (must be current financial year), until item, unit cost, total cost, 12.5% vat component and authorised by vendor.
- For contractual, tenders and recurring payments the purchase order must have all supporting documents attached as per the Government’s Contracts and Tender Act.
- Read and documentation attached as payment schedules, dates, terms and conditions of making payment will be specified in the document.
Legal Compliance and the Financial Regulations
- Purchase orders of less than VUV100, 000 officers must authorize with appropriate financial delegation as per Financial Regulations Order Number 27 of 2000.
- Purchase orders of at least VUV100, 000 and not more than VUV1, 000,000 must be accompanied by 2 quotations from 2 different vendors and authorized by an officer with appropriate financial delegation.
- Purchase orders of more than VUV 1,000,000 but less than VUV5, 000,000 must be approved by the Head of the Ministry with 3 quotations from 3 different vendors.
- Purchase orders of VUV5, 000, 000 and over must satisfy the requirements stipulated in the Government Contracts and Tenders Act of 1998 and the procedures set out in the Tenders Regulations. Tender approval must be attached to the purchase order.
- Check for recurring payment – if the total cost is over VUV5, 000, 000 the Central Tender Board must approve tender before payment is processed. Refer to Regulation 5.1 subsection (5).
- Purchase orders for all vendors must specify the 12.5% vat as per the Value Added Tax Act. The vat must be a separate line on the purchase order.
- All purchase orders must be authorized by an officer with appropriate financial delegation and approved for payment by the Head of the Department or Agency.
- Check all signatures against the signature specimen’s master file maintained by the Exchequer Services Manager.
- If a signature is not on the master file or is distinctively different, the purchase must be rejected and reported to the Head of Department or Agency.
Chart of Accounts for Expenditure
- All purchase orders must be charged to their correct chart of accounts for expenditure.
- Check the description of goods or services on the invoice or the documentation – it must agree with the chart of accounts stated on the purchase order.
- If the chart of accounts does not agree with the good or service – reject the purchase order and inform the Head of Department or Agency. Use the ‘returned purchase order’ form to send purchase orders back to departments.
Accounting Distribution and Ledger
- Check that the accounting distribution is correct and the totals agree with the invoice attached.
- The 12.5% vat must be stated as a separate line and coded to chart of accounts 8CZV.
- Check the appropriate ledger 2 account(s) for recurrent budget and ledger 4 account(s) for the development budget has been charged for this expense.
Refer ledger 4 expense accounts to the accounts section for endorsement.
- The purchase order must be in two parts.
- First part details the purchase order number, vendor name and code, purchase order description and unit price. It will also have the authorizing signatures for the officer approving the spending and the officer authorizing receipt of goods or service.
- Ensure that the person approving the spending is different from the person signing for goods or service satisfactorily received.
- The second part of purchase order is the ‘payment confirmation’. This is important and must be attached to the first part as confirmation of funds being committed for this purchase. Reporting of Suspicious Purchase Orders
- Purchase orders, which do not satisfy any of the requirements and regulations, must be reported to the Payments Supervisor and the Exchequer Services Manager immediately.
- Suspicious invoices and documents accompanying purchase orders must be copied and reported to the Payments Supervisor and the Exchequer Services Manager.
- If you detect fraudulent acts of false accounting, embezzlement, fictitious vendors or forgery of signature by an officer – you must report this to the Payments Supervisor and the Exchequer Services Manager immediately so that appropriate action can be taken.
- Purchase orders are receipted and invoiced input into FMIS the system
- Purchase orders are approved by Payment supervisor and the Exchequers services manager (Run request form)
- Running jobs and Printing of cheques by the FMIS system support staff
SIGNING OF CHEQUES
- Authorise officers: Director / Primrose Toro/Jack Loughman / Noeline Thomas
DISTRIBUTION OF CHEQUES TO EMPLOYEES / SUPPLIERS / DEPOSITS AND POSTAGE
The payment supervisor
Payment Section Work Flow cycle
- Cheque Generation
- Cheque distribution
- Documents filling and archiving
Roles and Responsibilities of the Payment Section
The Payment Section is the main agency for processing purchase vouchers and facilitating payment to be made to suppliers, Government employees and other die for payment from the Government. Its responsibilities include:
- Update the vendors account history files;
- Maintaining the vendor activities of information about Government suppliers and trading terms agreed with suppliers;
- Monitoring the Governments spending program and ensuring amendments are made to contractor vendors and suppliers according to term agree with them;
- Preparing report on account payable activity including payment made to suppliers and enquiries for payment made by suppliers;
- Preparing payment report for accounts payable activity to ensure payment are made when due;
- Reconciling the creditors control accounts to ensure that the General Ledger has a correct record;Reconciling the Payable suspense Accounts;Maintaining records of imprests given to Government officials.Managing the Payment Section
The work of the payment section is very important as it ensures that suppliers, contractors, employees and other who provide goods, materials and services to the Government receive payment for the contributions made to progressing the Government’s development priorities.
In general the work of the payment section is organized along the following lines;
- The payment supervisor is not involved in the day to day work programme. He or she concentrate on managing the section, understanding the major trends in expenditure programs and ensuring payment vouchers are processed efficiently and the payment cheques are drawn in according to production schedules and timelines;
- Senior payment officer administrate the larger and more complex expenditures processing routines and take responsibilities for ensuring that the payments are properly checked and the vendor database is updated. Payment officers and assistant payment officers look after the detailed processing of payment vouchers assigned to them. They are responsible for data entry, document filling and archiving liaising with agencies and department and filling.
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