November 4, 1992
BASIS II Central Project Team
David Martinson, and Bob Zimmerman
BASIS II Issues for Management Approval
The following are issues or directions that the BASIS II central
project team has taken
that may require management approval since
they represent change from current policy or practice.
Representatives from the central project team
(a minimum of
Colleen Briney, Bill Moody, William Rains, and David Wimberly)
would like to
schedule a meeting to discuss these issues.
They are only briefly stated here and do not include an analysis of
their implications, which could be lengthy.
Further documentation can be prepared upon request.
These items should be considered in light of the following
assumptions and points that we feel require emphasis.
Since the TARGET concept has already been approved, it is assumed that
data will be entered at its point of origin and that electronic approval
of transactions will be performed by the necessary personnel.
This may be perceived as additional work by some and it
implies that the necessary areas will have mainframe access and can
afford the use of that resource (this is a hard dollar expense
for some offices).
These issues of workload, equipment and expense can be deterrents to
the use of the system, and if the system is not used it cannot
Strong support for the system and for the policies and procedures
that accompany it are required from the top down.
- Some areas would only be occasional users.
They process so few orders or financial transactions that they
will probably not be able to master use of the system.
In these circumstances, these areas will need to have their
processing performed by an office at a higher reporting level.
The practice of taking their request to this office may represent
a step not currently required, and thus may be perceived
- We assume that available funds checking, a major change
from current practice, is a mandate from management and therefore
does not require discussion or approval.
The following points represent recommendations of the
BASIS II central project team:
Please contact Colleen Briney, Bill Moody, William Rains or
David Wimberly to set up a meeting to discuss these issues.
- The system is intended to be primarily paperless, and features to
facilitate printing of documents or transactions are intentionally
For this to be successful, transactions and activity history within
the system must be retained on-line indefinitely.
Controls have been designed into the system to ensure its integrity
and to satisfy anticipated concerns of various audit offices.
- The current system of "negative confirmation", whereby
invoices are paid unless departments request payment to be held,
will be replaced with a system of positive confirmation.
Acknowledgement of receipt of goods will be required to be performed
A receipt must include an indication of the acceptability
of the merchandise.
If acceptable, this receipt will serve as approval to pay the
associated invoice if it falls within predefined maximum acceptable
This receiving function should be performed as goods are received,
may be performed after the invoice has been received and entered
to the system by Accounts Payable.
The implications of this change are vast, the most significant being
the physical management of invoices between the time they are
entered and the time they are vouchered/paid
(it is hoped that imaging will provide the solution to this problem).
Another significant potential problem is the delay that may occur
in vendor payments due to lack of receiving by departments
(this was the case when positive confirmation was last used).
Lastly, departments have openly voiced disagreement with the concept
of mandatory receiving and would prefer to "see" and approve
before they are paid.
- Purchases against blanket orders must be recorded by departments
by logging in the purchase noting the date of purchase, amount of
purchase, and any receipt or ticket number.
This should ideally occur as these purchases are made, however,
they may be recorded at any time but are required before payment
will be made to the vendor (see the problems noted above).
The invoice for these purchases may be entered by Accounts Payable
prior to the record of receipt being entered.
- Available funds checking and the commitment of funds will occur
as lines of a requisition are entered, and will precede the
approval of that requisition.
If rejected, the system would un-commit the funds.
- Commitments and encumbrances will include sales/use tax calculated
using a flat percentage (if not tax exempt) and optionally freight.
These values are determined per item.
- Commitments and encumbrances will be maintained at a summary
level on the available funds file.
They will exist on the requisition and purchase order
files with a net value for up to four concurrent accounting periods.
This will allow for production of an "Open PO Report"
that matches a department's DBR.
There are no plans to summarize commitments or encumbrances
and load them to General Ledger, although this would be possible.
- No security will be imposed that would restrict what company cost
centers may be specified on a requisition.
- Most actions that would increase costs or
change the cost distribution will necessitate a TARGET transaction
where the appropriate management approval is obtained.
This would be the case with requisitions, cost transfers, budget
transfers, internal invoices, changes to distribution, and
PO supplements to add lines, increase quantities or raise
the maximum allowable price.
- The expense will be charged and an accounts payable liability
will be created for vendor invoices for "received"
The date of these transactions will be the date of receipt
as long as the date is within an open
period, otherwise it will be the oldest open period date.
At fiscal year end, closing entries will be created to record these
same entries, based upon the purchase order amount, for orders that
have been received but for which the invoice has not been entered.
In the new year, these entries will be automatically reversed.
These entries will be dated 6/30 and 7/1 respectively.
- The cost for a requisition and the resulting purchase order
may be split among 10 different cost centers based upon
either percentage distributions or fixed dollar allocations
specified by item.
(Percentage distributions may be specified one time for an order
and automatically applied to all lines of the order.)
- Travel Authorizations will be entered electronically and must
reference associated requisitions required for conference registration,
air fare, or other items.
- A travel reimbursement check will be less the amount of any
advance provided the employee.
The accounting between the cost centers charged for the travel
and the travel advance fund will be automated.
- Financial Affairs will be responsible for reviewing, on a daily
basis, Purchase Orders whose system assignment of an object code
is potentially incorrect.
Corrections to this system assigned object code will be made as
- Departments will be responsible for selecting the budget category
for an item if at least one research cost center is being
- Installment payments that will span fiscal years will be
established with lines representing the payments for the current
Once budgets are loaded for the new year, the PO will be supplemented
by adding lines representing payments for the new year.
This PO supplement must be initiated by the department
responsible for the order.
- The "Reallocation of Funds" process will be split into
two separate processes, one specifically for budget transfers and
the other to make position and position funding changes
(eventually a BASIS I transaction).
- The addition of new vendors and the
maintenance of vendor names will be centralized, or at least
supervision of this maintenance will be centralized.
The Purchasing Office is targeted to perform this function.
- The system must be capable of providing
data to support the preparation of federal
reports required of the Agriculture Experiment Station and
the Cooperative Extension Service.
This means it must be capable of identifying expenditures by the
period of obligation.
Currently this is accomplished by these organizations performing
dual data entry and maintaining separate systems to support their
- The system will provide the ability to restrict
This will be based upon a flag maintained on the PO by the Purchasing
It is anticipated that this restriction would be applied to
bid items and other large dollar purchases.
- Accounts Payable check numbers will be system assigned as
invoices are grouped, approved and vouchered.
The physical printing of the checks will be performed at a later
time using a laser printer capable of printing the necessary
MICR codes (including check number) and a digitized signature.
This printer should be located in the Treasurer's Office.
- An office and personnel must be designated as the TARGET
administrator, responsible for maintaining the necessary
data definitions (primarily transaction routing tables)
required by TARGET.