Comptroller Audit Findings

The Comptroller�s Office recently completed a routine post-payment audit of the University of Houston in which they reviewed payments made with state appropriated funds. Though not many problems were discovered, UH departments are asked to follow the procedures below when making payments with state funds to address the audit findings:

� Vendor quotes for state voucher payments should be uploaded as backup documentation to the voucher, along with the invoice. If the voucher is supported by a formal PO or contract, the quote is not needed. Departments routinely obtain vendor quotes already. Therefore, departments are not being asked to obtain additional quotes. They are just being asked to upload the vendor�s quote to state vouchers, so that the Comptroller�s Office can review it during future audits.

� A written contract is required for services, in accordance with MAPP 04.04.01A, Contracting, and must be signed by both parties prior to services being performed.

� Always compare the invoice amount to the purchase agreement (i.e., purchase order, contract, or quote) before processing a payment. If the invoice amount is greater than the purchase agreement, the department should dispute the invoice by notifying the vendor in writing within 21 days of receiving the invoice, in accordance with MAPP 04.01.10, Prompt Payment and Payment Scheduling. If the department needs to receive more or different goods or services than indicated in the purchase agreement, the department should obtain a modification to the PO, contract, or quote before the additional or different goods or services are provided.

� Departments should utilize the tax exemption certificates on the UH Finance website to claim exemption from Texas sales and use tax, Texas hotel occupancy tax (state portion), and Texas personal property tax. In addition, UH is exempt from federal excise tax (see 26 U.S.C. Sec. 4253 (i) & (j)) and 911 service fees for phone service (see Texas Health & Safety Code Sec. 771.074 (Vernon 2010) and departments should refuse to pay these taxes.

� MAPP 04.01.03, Vouchers will be updated to indicate that employees may not be reimbursed on state funds for Texas sales tax, even if the vendor refuses to honor the University�s exemption certificate. This is the same rule that applies to sponsored project funds. MAPP 04.01.03 allows employees to be reimbursed for Texas sales tax on local funds (not sponsored projects) with certain limitations.

� Departments should follow the procedures outlined in MAPP 04.01.10, Prompt Payment and Payment Scheduling when making state voucher payments. The following points should be remembered:

o Prepare and submit vouchers to Accounts Payable in a timely manner to avoid late interest payments. Vouchers paid after the Net Due Date, which is 30 days after the later of the Invoice Receipt Date and the Goods Receipt Date, may generate late interest.

o Enter the correct Invoice Receipt Date and Goods Receipt Date on the voucher, in order to calculate the correct Net Due Date on the voucher. The Invoice Receipt Date is the date the voucher is first received at UH and the Goods Receipt Date is the date goods are delivered or services are completed. For subscriptions, memberships, and rentals/leases, the Goods Receipt Date is always the last date of the subscription, membership, or rental/lease.

o Only change the Scheduled Due Date on a state voucher if you have a justifiable reason, such as the contract or PO requires early payment, early payment is required to obtain a discount, or the vendor is a small business that requests early payment due to financial hardship. See MAPP 04.01.10 for a complete list of reasons to pay early. Document the reason for changing the Scheduled Due Date in Payment Comments. Otherwise, do not change the Scheduled Due Date on state vouchers. All local vouchers are automatically scheduled to pay immediately, as are state vouchers to reimburse employees. However, state vouchers to outside vendors are scheduled to pay 30 days after the later of the Invoice Receipt Date and the Goods Receipt Date.

o Departments may refuse to pay late interest payments to outside vendors (employees do not receive late interest) if they have a justifiable reason, such as a dispute involving the invoice and/or goods/services provided. The Late Payment Charge is changed to �N� to refuse interest, and the appropriate Payment Reason Code (e.g., DP for disputed payment) is selected on the voucher. See MAPP 04.01.10 for a complete list of reasons to refuse paying interest. Documentation of the disputed payment (or other reason for refusing interest) should be attached to the voucher as well.