Developing a Road to the Future

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Developing a Road to the Future
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Payment Admin Fee Process
Presented by Julia Tom Julia Tribbett,
Director of Business OperationsTom Peeler,
Executive Director
October 17, 2007

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Following progress of Car No 1, sponsored by a
Mohave Contract

• A Recap of the PPR Laps 1-489
• ..The PPR began..
• (that is Public Procurement Race for Non-Racing
  Fans)
• Lap 1-99 The need was realized, and
  authorization to proceed was given.
• Lap 100-229 The contract was located, quote
  received, due diligence performed and pricing
  verified.

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• Lap 230-250 The purchase order was created, made
  out to vendor and sent to Mohave. Mohave checked
  for contract compliance and price audit. Sent PO
  on to vendor.
• PO Made out to Vendor
• Mohave contract number included

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• Lap 251-361 The vendor prepared the
  goods/services to fulfill the order.
• Lap 362-445 The order was delivered and signed
  off on.
• Lap 446-489The vendor prepared the invoice and
  sent it to the member.
• And now... We are down to the final 10 laps. How
  will it go from here?

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The PPR Lap 490-500 the Invoice Process

• Lets make one last pit stop to assure
• a strong clean finish.

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PIT STOP CHECK LIST

• Is the invoice ready to Pay?
• PURCHASE ORDER NUMBER
• MOHAVE CONTRACT NUMBER!
• Why a Mohave contract number?
• To assure no OIL SKIDS DURING
• AUDITS!!!!

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Check List Includes

• Is all pricing matching PO
• Bond rate charged
• Tax rate charged
• Freight charged where contract allows
• Retention is withheld on applicable projects

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Some Exceptions (things that dont change)

• Mohave will invoice members for the admin fee on
• Lease(Financed) Purchases
• Mohave will issue one invoice for the admin
  fee with copies to the leasing agent and the
  member.
• Vendor will invoice for the periodic lease
  payments.
• Maintenance/Service/Rental Purchases
• Mohave will issue one invoice for the admin
  fee.
• Vendor will invoice for the periodic service
  payments.
• Erate Purchases
• Mohave will issue one invoice for the admin
  fee.
• Vendor will invoice for the goods and
  services.

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Changes in Communication

• Members contacting vendor direct for credits and
  returns
• Collection calls for status of payment will be
  made by the vendor directly to the member
• Corrected invoices will be requested directly to
  the vendor
• Copies of quotes or invoices will be requested
  directly to the vendor

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Payments Last 10 laps! 490-500

• Members pay the contract vendor directly
• Payment Terms of 30 days for Mohave contracts
• The use of Checks
• Pcards/Credit Cards
• Wire transfers
• Need to be approved by the vendor prior to
  payment.
• Quick pay discounts only if authorized by Mohave
  information located in contract pricing
  documentation (www.mesc.org)

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Winners Circle of a PPR

• Members have what they need procured through
  contracts that meet the procurement regulations
• Vendors are paid for goods/services
• Todays Public Procurement Race for Mohave
  Sponsored Car 1 has ended.

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Audit Service Technical
Inspection

• Mohave will still be performing contract audits
  for our members. When a contract is selected
  information will be requested by Mohave and
  submitted by the vendor. Types of info requested
  
• Copy of Member PO
• Copy of all Member invoices
• Copy of all credits applied to purchase order

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Problem Resolution

• Mohave will still provide member/vendor problem
  resolution.
• As a team we will continue to
• Interpret an enforce contract terms and
  conditions
• Act as a contract liaison during contract
  disputes
• Work through problems (returns/credits)

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Back in the garage.. After the
race

• The payment is made, the goods are owned and now
  its time to take care of the sponsor
• Vendors will remit payment of the 1 admin fee
  for member usage of Mohave contracts

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Admin Fee Currently

• Members pay an admin fee that funds Mohaves
  operations.
• The admin fee is 1 of the cost of goods and
  services purchased under Mohave contracts.
• Admin fee is not paid on the cost of ancillary
  items, such as shipping, sales tax, permits,
  bonds, etc.
• The minimum admin fee on any purchase is 10.
• The admin fee is included in contract prices.
• Mohave administers and collects the admin fee.

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Beginning January 1, 2008

• Members will continue to pay an admin fee that
  funds Mohaves operations.
• The admin fee will remain 1 of the cost of goods
  and services purchased under Mohave contracts.
• The admin fee will not be paid on the cost of
  ancillary items, such as shipping, sales tax,
  permits, bonds, etc.
• The minimum admin fee will be eliminated.
• The admin fee will still be included in contract
  prices.
• Collection and administration of the admin fee
  will be the Mohave vendors responsibility

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Admin Fee Administration

• Vendor will collect the admin fee as part of
  members invoice payment.
• Vendor will track admin fee payments for a
  specified period, generally one month.
• Vendor will prepare an admin fee reconciliation
  report for each period.
• The report will include all information required
  for Mohave to reconcile the admin fee payment.

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Admin Fee Calculator
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Admin Fee Calculator

• 1. "Total Amount" should match the invoiced
  amount for each item.
• 2. "Total" should match the invoice total.
• 3. Admin fee is charged on the cost of goods and
  services. Check your contract for confirmation
  of items with admin fee included in the unit
  price.
• 4. There is no admin fee on the cost of ancillary
  or pass-thru items (mileage, per diem, shipping,
  bonds, permits, sales tax, etc.). Check your
  contract for confirmation of items with no admin
  fee in the unit price.
• 5. This spreadsheet calculates admin on the
  appropriate items.
• 6. A similar calculator can be developed for
  total monthly sales. Such calculators should
  multiply the total amount of applicable line
  items by .0099. This ensures that no admin fee
  is paid on the amount of admin fee already
  included in the contract price.

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Admin Fee Payment

• The vendor will generally remit the admin fee
  payment once each month.
• If necessary, Mohave is requesting that vendors
  consolidate monthly payments so that the minimum
  admin fee check is 20.
• Mohave will assign an admin fee payment date for
  each contract.
• Once assigned, the due date will be the same for
  each admin fee payment.
• Vendor will remit admin fee payment to Mohave on
  or before the scheduled date.
• An admin fee payment reconciliation report must
  accompany each payment.

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Sample Reconciliation Report
Sample admin fee reconciliation report to provide
vendors with the information required for Mohave
to reconcile admin fee payments. Vendors may
submit alternate reports as long as the required
information is provided. The following
information will help you plan for reporting
admin fee payments 1. Invoice Number is for all
invoices with member activity during the
applicable period (payment invoices, credit
invoices, etc.). 2. Invoice Total is the total
amount paid by, or credited to, the member (all
charges, including materials, services, labor,
shipping, tax, bonds, mileage, etc.). 3.
Material/Service/Construction is the invoiced
amount for all items with Mohave's admin fee
included in the unit price (materials, services,
construction, maintenance, labor, travel time,
etc.). 4. Freight, Bond, Trade, Tax are non-admin
fee items. There may be others. (permits,
mileage, per diem, etc.) Check your contract. 5.
Mohave Admin Fee is the 1 admin fee included in
the unit price. The admin fee portion of the
unit price is .0099 of the total (i.e., 1,000
.0099 9.90). 6. The admin fee payment should
match the total in the Mohave Admin Fee column.
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Keys for Success

• Vendor must ensure that its invoice system is
  loaded with current correct Mohave contract
  pricing.
• Vendor should test the system to ensure that it
  is paying admin fee only on applicable items.
• Vendor should test the system to ensure that it
  is calculating admin fee amount from of the
  correct invoice amount.
• Members and vendors should remember that the
  minimum admin fee is eliminated under the new
  process.
• Vendors must provide an admin fee payment
  reconciliation report for each admin fee payment.
• Vendors should send the admin fee payment
  reconciliation report at essentially the same
  time as the admin fee payment.
• Members should make every effort to pay
  undisputed invoices on time.
• Members should immediately report disputed
  invoices to the vendor.
• Members and vendors may contact Mohave for
  assistance.

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Keys for Success

• Questions, comments, concerns or suggestions
  during development of the new process should be
  directed to processchange_at_mesc.org.
• After January 1, 2008, questions should be
  directed
• Contracts or pricing info Contracts Team
• Purchase orders, invoices, payments
  Procurement Team
• Admin fee payment, reconciliation
• internal audit Accounting Team
• Contact information is available on our website,
  www.mesc.org.

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• Questions?

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Your Future Public Procurement Races

• Mohaves focus continues to be our dedication to
  excellence in public procurement and customer
  service, to become your cooperative procurement
  partner of choice.
• We will continue to provide quality contracts for
  your purchases using the new Mohave Fast Track
  Process.
• Thanks for attending
• Continue to Drive SAFELY