Scottish procurement policy handbook

15 Business processes

15.1 Purchasing authority

No member of staff may award a contract ²⁴ without written delegated purchasing authority. This delegated authority to commit to a contract (purchasing authority) is entirely separate from delegated budgetary authority, including that detailed in individual financial responsibility statements.

15.2 Separation of duties

In any procurement process, the key roles of budget holder and purchaser should not be performed by the same individual. The budget holder should have authority to commission goods, services or works and to provide financial authority for the expenditure. The purchaser should have authority to commit the organisation to a contract for the purchase of goods, services or works.

Separation of these roles within a procurement process provides necessary safeguards against impropriety or unethical practice. Accountable officers are required to ensure that procedures exist that allow only those staff with appropriate purchasing authority to commit the organisation to a new contractual relationship.

15.3 Ordering and payment procedures

All valid invoices should be paid on time. All public sector organisations are bound by the Late Payment of Commercial Debts (Interest) Act 1988, under which suppliers have a right to claim interest on payments made outside the agreed terms, or 30 days after receipt of a valid invoice where no payment terms are agreed. Where there is no contractual provision or other understanding to the contrary, suppliers should therefore be paid within 30 days of receipt of a valid invoice or similar correct and due demand for payment.

The payment of invoices that do not have a pre-requisite contract or order for the goods, services or works provided tends to facilitate unofficial buying by allowing the procurement function to be bypassed. It also means that authority to procure is retrospectively given rather than pre-approved. Therefore, suppliers should be given notice that goods, services and works should only be provided on receipt of appropriate contract or order reference information and within that same written notice informed that invoices received without contract or authorised order references will require special approval if they are to be paid. At a later and appropriate point in time invoices received without a pre-approved contract or order number should be returned to suppliers for this information. The payment cycle should not commence until a valid invoice with all required data is received.

Procurement arrangements should be reviewed periodically to consider whether ordering and payment procedures could be streamlined and value for money improved through implementation of relevant technology solutions, including e-procurement.