A solid grants management system will keep your project on schedule and within budget, as well as provide an adequate paper trail for audit purposes. This publication serves as a guide to building a purchasing system for acquiring goods within the scope of a grant, including fixed assets and consumables. It does not include acquiring service contracts or non-project purchases, but many of the same principles outlined apply to those purchases.
Nearly all projects will require a series of purchases timed to meet grant deadlines. While the goal of a purchasing system is efficiency, multiple approvals necessitate a somewhat lengthy process. In order to avoid project delays due to purchasing snags, project staff should anticipate needs. By using the approved project budget and timeline as guides, staff should be able to prepare purchase requisitions several weeks in advance of when items are needed.
Division of Duties
Nearly all purchases require coordination between multiple departments, each bearing their own responsibilities. Purchase requisitions should be approved successively by the following persons or departments:
Project Manager – The project manager must be aware of all purchases made with grant funds, unless he or she has specifically designated this duty to another individual. Project staff members typically initiate purchase requisitions on an ongoing basis in anticipation of budgeted needs.
The project manager provides quality assurance. He or she reviews purchase requisitions with an eye for project appropriateness, competitiveness of bids, and timing. Furthermore, the project manager or intermediate supervisor spots problems in documentation (improperly filled-out forms, inadequate detail, etc.) in order to speed the approval process through operations and finance.
Grant Manager / Contract Specialist (optional) – Large grants are sometimes assigned to a grant manager or contract specialist who is tasked with compliance issues, maintaining budget targets, and liaising with the funding agency. If applicable, this person measures all purchases against budget projections. This person should also be aware of what is an allowable expenditure within the grant requirements, as there are usually restrictions. (The aforementioned duties fall to the project manager if no grant manager exists.)
Operations – Operations staff members are responsible for tracking inventory and being aware of all project sites and their functions. Large organizations may have a specific department for this purpose, whereas at a smaller organization, an administrator may fill this role. In the purchasing process, operations compares the proposed purchase to existing inventory and flags approved items for tracking.
Finance – Finance staff are typically responsible for payment and accounting for expenses. They generally serve as the last stage in the purchasing process because purchase content is largely irrelevant to performance of their duties.
Gathering Information: Multiple Bids
In order to provide the necessary documentation for every requisition, project staff must fully research all items for purchase. Bids should include the name of the vendor, item for purchase, purpose, and cost. Vendors can be solicited based on existing contacts or new research. Bid documentation can range from a full proposal/bid form to an email from the vendor or an internet or catalog printout. Typically, a minimum of three bids is required for every purchase. (For more information on compliance, see “Procurement Requirements and Processes”.)
Purchase Requisitions Forms
Purchase requisition forms should be uniform across the organization and supply finance with the necessary information to complete the transaction. Including the following items will provide clarity and ensure a complete paper trail.
After an order is successfully paid, finance should retain the original purchase requisition and physically attach the receipt. Purchase orders should be filed appropriately for audit purposes, and project staff may also want copies for their records. For fixed asset purchases, finance should coordinate with operations for physical tracking and to assign depreciation and amortization schedules if necessary.
Buying the necessary items to complete your project can be more complicated than you would expect. Complicated grant requirements, audit expectations, budget restrictions, and looming timelines can be overwhelming. To stay on target, you should clearly divide duties, train all staff on their responsibilities, create intuitive yet detailed forms, and design a system so that you can easily follow up on purchases and prepare for an audit.