Purchase to Pay Policy POL 374 Redacted.pdf

Policy: Purchase to Pay (POL-374)
Publish Date 29 June 2023
Approved by
Gareth Stiven
(DCE Strategy, Finance and
Policy)
Owner
s 9(2)(a)
Author
Manager – Finance Shared
(Chief Financial Officer)
Services
Table of Contents
1.
Purpose ..................................................................................................................... 3
2.
Scope ........................................................................................................................ 3
3.
Policy Statement ....................................................................................................... 3
4.
Policy Key Principles .................................................................................................. 3
5.
Policy Requirements .................................................................................................. 5
5.1
Purchasing Methods ............................................................................................... 5
5.2
Purchase Cards ........................................................................................................ 6
5.3
Employee Expense Claims ....................................................................................... 7
5.4
Purchase Orders ...................................................................................................... 8
under the Official Information Act 1982
5.5
Supplier Invoicing .................................................................................................... 9
5.6
Receipting.............................................................................................................. 10
6.
Breaching this Policy ................................................................................................ 10
7.
Key Accountabilities and Responsibilities ................................................................. 11
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8.
Related Resources ................................................................................................... 11
8.1
Policies and Guidelines ......................................................................................... 11
8.2
Legislation, Regulations and Guidance ................................................................. 12
9.
Monitoring and assurance ....................................................................................... 12
© Kāinga Ora – Homes and Communities. This document has been developed by Kāinga Ora. Reproduction,
adaptation or utilisation either in part or in whole without the prior written consent of Kāinga Ora is
prohibited.
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10.  Key Terms................................................................................................................ 13
11.  Document Control ................................................................................................... 14
11.1  Version Control ..................................................................................................... 14
11.2  Endorsers .............................................................................................................. 14

1982
Act
Information
Official
the
under
Released
© Kāinga Ora – Homes and Communities. This document has been developed by Kāinga Ora. Reproduction,
adaptation or utilisation either in part or in whole without the prior written consent of Kāinga Ora is
prohibited.
Error! Reference source not found.

Reference # / Version #
DD month YYYY

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1. Purpose
This document contains a core set of policy statements applicable to the Kāinga Ora
Purchase to Pay (P2P) processes. These policy statements apply to all individuals purchasing
goods and services on behalf of Kāinga Ora. Adherence to this policy is both an individual
and a corporate responsibility.
P2P is the process of requisitioning, purchasing, receiving, paying for, and accounting for
goods and services. The purpose of the process is to support the efficient, timely, and cost-
effective acquisition of goods and services.
1982
Sound purchasing processes are crucial to Kāinga Ora; approval authority, Purchase Orders,
Act
and Purchase Cards (P-cards) have specific areas of applicability, objectives, and process
controls.
The purchase of materials and services for which this policy applies must be in accordance
with these approved processes, and the policies and procedures established for each
individual process must be followed.
Information
2. Scope
This policy applies to all Kāinga Ora people who have the authority to make purchasing
decisions, and those who initiate purchasing transactions at the request of the delegated
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financial authority holder. This includes:
•
the
  Purchasers
•  those making a requisition
•  approvers; or
under
•  those who validate and authorise payments.
3. Policy Statement
Purchasing decisions made while conducting Kāinga Ora business must: relate to the goals
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and objectives of Kāinga Ora; be reasonable; be able to withstand parliamentary and public
scrutiny; and be sufficiently documented in the event an independent review – either
internal or external – is undertaken.
4. Policy Key Principles
Financial statements prepared by Kāinga Ora comply with:

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•  the Public Finance Act (1989)
•  the Crown Entities Act (2004)
•  New Zealand Generally Accepted Accounting Practice
•  the Public Benefit Entity International Public Sector Accounting Standards; and
•  relevant Treasury Instructions.
The following principles underpin decision-making about sensitive expenditure:
Decisions made in relation to sensitive expenditure must:
1982
•  have a justifiable business purpose – this means the expenditure is consistent with the
public organisation’s objectives. A justifiable business purpose means a reason that
Act
makes clear sense, supported by evidence of the need for the spending, as well as
evidence that a range of options have been considered
•  preserve impartiality – this means decisions based on objective criteria, rather than on
any sort of bias, preference, or improper reason
•  be made with integrity – this means exercising power (actions/decision-making) in a way
that is true to the values, purpose, and duties for which that power is entrusted to, or
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held by, someone. It is about consistently behaving in keeping with agreed/accepted
moral and ethical principles
•  be moderate and conservative when viewed from the standpoint of the public and given
Official
the circumstances of the spending – this includes considering whether the business
purpose could be achieved at a lower cost
the
•  be made transparently – in this context, this means being open about the spending, and
willing to explain any spending decisions or have them reviewed; and
•  be made with proper authority – this means the person approving the spending has the
under
appropriate financial delegation and budget to do so, for the type and amount of
spending, and that they follow the correct procedures.
All principles must be applied to each spending decision and no principle should be treated
as more important than another.
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Consistent with the Auditor-General’s guidelines, Kāinga Ora will not fund any alcohol
expenditure.
Under no circumstances are multiple claims allowed for the same expenditure, including
claims made to other organisations.
Kāinga Ora spends public money; this money is not the property of people in Kāinga Ora to
do with as they please. Consequently, the expenditure incurred by Kāinga Ora should be:

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1982
Act
Information
Official
the
under
Released

Work order
Any
Responsive repairs and maintenance
expenditure originated through Kotahi and
planned maintenance via Oracle.
Manual Invoice
Any
For tenant-related costs and property
Voucher
acquisition settlements.
Office Max via
Any
Oracle – iProc
Office stationery.
Catalogue
1982
Support Portal –
Any
Office furniture and fittings (other than those
Facilities
available from the Office Max catalogue).
Act
Support Portal –
Any
Flights, accommodation, hire vehicles.
Travel Booking
Manual Invoice
Any
For tenant-related costs and property
Voucher
acquisition settlements.
Information
5.2
Purchase Cards
Purchase Cards (P-Card) permit authorised Kāinga Ora cardholders to purchase products or
services directly from suppliers without having to go through the traditional PO process; this
Official
results in increased operational efficiencies and reduced costs.
The following rules apply to P-Cards:
the
1.
P-cards are intended for purchases within an employee’s approval authority
transaction limit, as established in accordance with levels shown in the Approval
under
Authority Limits.
2.
P-Cards must not be used where a current contract for that good/service is in place
with an existing supplier.
3.
P-cards are intended for one-off purchases with low dollar value (<$5,000); they
Released
should be used for:
a.
external entertainment and hospitality
b.
employee support and welfare
c.
internal meetings and training
d.
position-related expenses

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e.
health and well-being
f.
electric vehicle charges
g.
travel allowances; and/or
h.
tenant-related expenses
4.
P-Card administration is the responsibility of the Finance Shared Services (FSS) team.
All staff who receive a P-Card must sign a Card Authorisation Form committing that
all card purchases are designated for Kāinga Ora, and they will comply with all Kāinga
Ora policies and guidelines.
1982
5.
For all P-card purchases, GST receipts and pre-approval documents must be attached
Act
by the P-Card user, in accordance with the Sensitive Expenditure Policy (SF-POL-003).
6.
The P-Card holder is responsible for ensuring their transactions are completed and
ready for approval by the authorising manager within 30 days of the expense being
incurred.
7.
The authorising manager is responsible for ensuring all P-Card transactions are
Information
completed within 60 days of the expense being incurred.
8.
When the P-Card holder ceases employment by Kāinga Ora, the P-Card must be
returned to the authorising manager who must destroy the card and contact FSS via
the Support Portal.
Official
9.
When the P-Card holder changes their employment status or reporting line, the new
the
authorising manager must advise FSS via the Support Portal.
10.
In the event a P-Card is lost or stolen, or potentially fraudulent transactions are
identified, the card holder must contact the credit card company directly, before
under
advising FSS via the Support Portal.
11.
When a new authorising manager is hired, seconded, or otherwise changed the card
holder must advise FSS via the Support Portal.
Note:
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For more information, refer to the Purchase Card & Staff Claim resources.
5.3
Employee Expense Claims
Employees who are not P-Card holders but incur a work or employment-related expense
can make an employee expense claim for reimbursement.

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Employee expense claims are intended for one-off purchases with a low dollar value
(<$5,000), where the employee does not hold a P-Card, for example:
•  health and well-being (for example, eye tests)
•  travel allowances; or
•  mileage claims
Any employee making an expense claim is responsible for ensuring their transactions are
completed and ready for approval by the authorising manager within 30 days of the expense
being incurred.
1982
The authorising manager is responsible for ensuring all employee expenses are completed
within 60 days of the expense being incurred.
Act
5.4   Purchase Orders
The Purchase Order (PO), with general terms and conditions included, serves as the primary
means by which Kāinga Ora acquires materials, goods, or services.
Goods or services must only be supplied when a valid PO number has been issued by
Information
Kāinga Ora to the supplier.
Kāinga Ora reserves the right to refuse payment to a supplier unless a valid and complete
invoice is provided that includes reference to the applicable PO.
Official
A PO must be raised before committing to an expenditure. Where a supplier has been
directed to proceed by an appropriately-delegated representative of Kāinga Ora, Kāinga Ora
the
will honour the commitment. Unapproved expenditure is not permitted.
Revisions to POs must be made by means of a change order to ensure appropriate approval
authority is obtained. Similarly, contracts are revised by amendments to those documents;
under
email communications are not a satisfactory method of managing change, as they do not
offer the appropriate audit trail for purchases.
Things to note while raising a PO:
1.  For goods or services, a PO must be issued to the supplier before goods/services are
Released
provided.
2.  Employees must draft a contract and attach it to a requisition where the following apply:
a.  the requisition is for commercial goods or services
and

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b.  the requisition is for a non-panel supplier and ≥$5,000 (including GST)
or
c.  the requisition is for a panel supplier at any value.
3.  Where there is no requirement to attach a contract to the requisition, then a quote or
an estimate must be requested from the supplier and attached.
4.  Appropriate and clear details describing the reason for the purchase of goods/service
should be included as part of the requisition.
1982
5.  Requisitions must be coded to either a Project or a GL Cost Centre.
6.  For project-related expenditure, a separate PO (requisition) must be completed for each
Act
project and assigned a different PO number.
Note:
The purchase of all goods and services must be in accordance with the Kāinga Ora
Procurement Policy (POL 335) and the Kāinga Ora Purchase Order Terms and Conditions.
Information
Information and links to templates are provided on Atamai; further information is also
available in the Raising a Requisition/Standing POs resource.
5.5
Supplier Invoicing
Official
Kāinga Ora only accepts electronic invoices. To ensure invoices are processed and paid in a
timely and efficient manner, they must:
the
•  be submitted directly to: mailto:[email address]
•  be provided as a PDF or sent electronically via the PePPol network
under
•  contain one invoice per PDF submission
•  include a valid Kāinga Ora purchase number
•  align with the Kāinga Ora invoice guidelines.
A valid tax invoice is one that meets the requirements of the Goods and Services Tax Act
Released
(1985) and should include:
•  the words 'tax invoice' in a prominent place
•  the name (or trade name) and GST number of the supplier (if GST-registered)
•  the date of issue
•  a description of the goods or services; and

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•  the total amount payable.
5.6
Receipting
Before payment is made, invoices must be receipted to confirm that goods/services have
been received; this is the conclusion of the three-way match process (that is, the purchase
order is matched to the invoice and receipt).
Receipting notifications are generated in Oracle, alerting the business user an invoice has
been received and requesting they confirm receipt of the goods/service.
Kāinga Ora targets receipts of all valid supplier invoices on the day submitted for payment.
1982
Timely receipting of invoices aligns with immediate payment terms and supports the
Government’s prompt payment initiative.
Act
To assist with prompt payment, Kāinga Ora operates an auto-receipt policy for low value,
low risk invoices, where:
•  a single line requisition was raised
•  the invoice total is ≤$600 (including GST); and
Information
•  the PO has sufficient funds remaining to pay the invoice.
Note:
Some supplier categories are excluded from auto-receipting. These include: Building
Official
Consent Authority Levies, body corporate fees, and council Invoices
the
Where invoices are auto-receipted, a notification will be provided to requestors, confirming
an invoice was submitted by the supplier, and has met all necessary conditions to be auto-
receipted and processed for payment.
under
6. Breaching this Policy
Depending on the nature and circumstances of the breach, a breach of this policy may be
deemed to be misconduct or serious misconduct, and disciplinary action may be taken,
including, if deemed necessary, reporting the breach to any relevant enforcement agency.
Released
Staff who become aware of a possible breach should report it to their People Leader or
another Senior People Leader. If a staff member believes the breach is of a significant
nature then the Chief Financial Officer and/or a Deputy Chief Executive (DCE), and/or the
Integrity Assurance team should be informed.

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7. Key Accountabilities and Responsibilities
Key accountabilities and responsibilities are as follows:
1.  Approvers are restricted to purchasing activities within their individual authorisation
(DFA), and in accordance with current purchasing policies and procedures.
2.  A person with delegated financial authority or approval authority at the level of the
entire expected expenditure must approve any PO issued in anticipation of a
commitment with a supplier in advance.
3.  Approval must be documented in advance of the initial purchase transaction, and the
1982
approval documentation must specify the period and expenditure limit for which
approval is granted.
Act
a.  For more information, refer to the Mana Tuku Kaupapa Here (Delegations Policy)
(SF-POL-001).
4.  Kāinga Ora operates immediate payment terms as standard for all suppliers; this aligns
with the New Zealand Government’s prompt payment requirements. Kāinga Ora is
required to meet the following supplier invoices payment timeframes:
Information
a.  75% of invoices are paid within five days of submission for payment; and
b.  95% of invoices are paid within 10 days of submission for payment
Official
5.  To meet the expectations of contributing to strong, long-term, and sustainable
partnerships (by providing reliable cash flow to suppliers and customers) and enabling
the
process efficiency and resource-release, Kāinga Ora needs to:
a.  understand the P2P process, and individual and collective responsibilities
under
b.  whenever possible, ensure purchases are made via the appropriate purchase
method; and
c.  proactively work with suppliers to improve requisition, invoicing, and payment
processes.
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The Kāinga Ora Procurement Policy (POL 335) applies to any financial commitment made on
behalf of Kāinga Ora and ensures compliance; this helps Kāinga Ora abide by the
Government Procurement Rules.
8. Related Resources
8.1
Policies and Guidelines

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•  Fringe Benefits – Entertainment Tax (F-203)
•  Health & Wellbeing Entitlement Policy (SH-POL-109)
•  Kāinga Ora Invoice Guidelines
•  Koha Policy (POL-378)
•  Mana Tuku Kaupapa Here (Delegations Policy) (SF-POL-001)
•  Motor Vehicle Policy (POL-324)
•  Procurement Policy (POL-335)
•  Purchase Order Terms and Conditions
1982
•  Raising a Requisition
Act
•  Selection and Purchase of Software Policy (I-123)
•  Sensitive Expenditure Policy (SF-POL-003)
•  Sensitive Expenditure Guidance (SF-POL-003A)
•  Supplier Setup or Amendment User Guide
•
Information
  Taxation Guidance (F-109)
•  Travel Policy (POL-332)
8.2
Legislation, Regulations and Guidance
Official
•  Public Finance Act (1989)
the
•  Treasury Instructions
•  Public Service Act (2020)
•  Te Kawa Mataaho/Public Service Commission - Standards of Integrity and Conduct
under
•  Office of the Auditor General – Controlling Sensitive Expenditure: Guidelines for Public
Entities
•  Te Kawa Mataaho/Public Service Commission - Chief Executive Gifts, Benefits and
Expenses
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9. Monitoring and assurance
Evidence will be gathered by Kāinga Ora Finance, Risk, and Assurance Committee, the
external auditors, or other nominated and suitably-authorised party, including feedback
from within the team, DFA holders, and users of this policy.
The evidence may assess:

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1982
Act
Information
Official
the
under
Released