Page 8 - The Edge - Spring 2018

VENDOR/BUYER CONFERENCE

BY DON HARRIS

Schools and Vendors in

A er-the-Fact Purchases

Lila McCleery Larry Larson

A er-the-fact purchases are a big deal for one
simple reason – they’re illegal. “We will send a letter to the vendor notifying them
Lila McCleery and Larry Larson of Phoenix
Union High School District explained how that they provided services to an individual in
such transactions are so detrimental to the the district without a PO and that they run the risk of
school district and the vendor because they
cause so many problems. In a breakout session not being paid by the district. The rst notice is to be used
at AASBO’s Vendor-Buyer Conference on
January 30, McCleery said an a er-the-fact for educational purposes, where the principal discusses
purchase is an unauthorized commitment of with the individual the correct purchasing policy.”
district funds.
“An a er-the-fact procurement occurs when — Larry Larson of Phoenix Union High School District
a school site or department orders or receives
material, services or construction prior to a purchase order or a er-the-fact purchase,” McCleery said. “ e second was – $12,000.
change order being issued by the Purchasing Division,” McCleery What did not occur was no quotes were obtained. at’s an issue
said. right there.”
She added: “It’s against the law.” Under the Arizona Revised e vendor claimed that someone at the school said it was OK
Statutes and the Arizona Administrative Code, it is classi ed to deliver the golf carts. He said he had a signature, but there was
as a Class 6 felony. It is also likely against Governing Board no purchase order. While trying to resolve the issue, the school
policy, she said. Criminal charges could be brought against was advised to lock the golf carts and put the keys away. But
the employee as well as disciplinary action up to and including the principal called back and said the carts had been used in a
termination. Each such purchase could result in a potential homecoming parade and one of the carts was damaged.
audit problem. at really complicated things, Larson said, because the
Under an unlawful purchase, the vendor might not be paid by district had no title or insurance on the carts.
the district or payment may be delayed signi cantly. In fact, the It took several months to resolve the matter, and in the
vendor may have to collect payment directly from the individual meantime the vendor was not paid. e vendor was furious.
who placed the order. “He said he had a signature, but signature he had was when
McCleery explained that under a normal purchase order process, he delivered the carts,” McLeery said. “ ere was no signature
the Purchasing Department veri es certain information from each authorizing the purchase. He threatened litigation, and it got
vendor, including that they are following the E-Verify requirements pretty ugly.”
as required by law or that “there is no con ict of interest, like hiring Finally, Phoenix Union sought quotes from various vendors,
their brother’s T-shirt company.” and the vendor who had delivered the golf cart was the low
“When it’s an a er-the-fact purchase, we run the risk of those bidder. “We were able to get the vendor paid,” she said. “I think
things happening, and possibly having utilized a vendor that is not the vendor realized he had made a signi cant mistake.”
following these regulations. at would provide the district with Giving advice to vendors, McLeery said, “We understand that
multiple audit exceptions.” vendors want to make that sale, but be sure to follow the process
McCleery emphasized that at Phoenix Union, the contract is so that problems are minimized and payment can be made legally
the purchase order. It relates to speci c terms and conditions that and quickly.”
protect the vendor and the district before, during, and a er the When an a er-the-fact purchase occurs, Phoenix Union uses a
purchase. Problem Payment Worksheet. Larson said it becomes an auditable
McCleery and Larson provided an example of an a er-the- trail as to what transpired. It requires detailed information
fact purchase that Phoenix Union experienced last year. A vendor regarding the purchase, and must be signed by the individual
delivered two golf carts to a district school without a purchase order
in place at a cost of around $12,000. “ e rst thing, we’ve got an CONTINUED ON PAGE 9

8 THE EDGE SPRING 2018
THE EDGE |