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TO: Campus Unit Finance Leads, University Business Managers
FROM: Troy Morse, Director of Purchasing Services

We would like to remind campus units that per Policy 1227 on Unauthorized Purchases, all purchase contracts entered into on behalf of the University are the exclusive responsibility of Procurement Services. An agreement that is not binding solely because the University representative who made it lacked the authority to enter into the agreement on behalf of the University is termed an “unauthorized commitment” and is in direct violation of North Carolina General Statute § 143-58.

Purchasing Services continues to see incidences of unauthorized commitments occurring across the University, which in turn requires the creation of purchase orders to pay for goods and services that were improperly procured, often in violation of state and federal purchasing requirements. Even in cases where a P-Card or T&E Card are appropriate methods of payment, contract documents requiring signature should be reviewed, negotiated and signed by authorized purchasing personnel prior to the commencement of services or delivery of goods.

In an effort to standardize the response to these incidents, provide visibility to department and finance leadership of these violations, and ensure that corrective action plans are put in place to reduce future occurrences, Purchasing Services has developed the Disposition of Unauthorized Commitment Form 1227.1.1f which is now attached to Policy 1227 on Unauthorized Purchases.

The new form requires that a University employee who has violated the policy provide a full account of the issue and all supporting documentation describing the agreements that were made.  Supervisors will be required to review the employee’s actions and provide a corrective action plan to prevent reoccurrence. The appropriate Campus Unit Finance Lead will acknowledge funds availability at the time of commitment. This documentation will be required prior to issuance of a purchase order for payment and will be attached to the purchase order as part of the official procurement record.

We appreciate your support of these efforts to ensure compliance with University and state purchasing requirements. For any questions about this policy or purchase contracts, please contact Purchasing Services at purchasing_team@unc.edu.

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