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POLICY

1.1 Key policies pertaining to cash purchase are given below:

• Timely procurement of items is the responsibility of the Head of Admin function at Head Office,
• District Manager is responsible for procurement of items for unit/field/district offices.
• At least three quotations are obtained from the suppliers to select the successful bidder.
• Supplier is selected by the Competent Authority.
• Purchases are made through petty cash or through bank payments depending on the amount.
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PROCEDURE

1.2 Requisition for the purchase of items from the market is received from the stores function. The suppliers are contacted and quotations are obtained from the market. Current prices of the items requisitioned are compared with the previous purchase price and if the prices have not fluctuated the order is placed with the selected supplier. For the items where the prices have fluctuated from the previous prices a report is prepared and forwarded to the competent authority alongwith the quotations for selection. The supplier is selected and the name is intimated to the Head of Admin function. The items are procured and are sent to the stores function alongwith the invoice to acknowledge the receipt of purchase. In some cases the sample is shown to the concerned function and prior approval is sought before the item is purchased. The signed invoice received from the stores function is signed by the Head of Admin function and is forwarded to the Finance & Accounts department for payment.
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1.3 The approval of purchase will be given in accordance with the approval limits as follows:

Head Office

• Chief Executive Officer upto Rs. 10,000
• Purchase Committee above Rs. 10,000
 
District Office

• District Manager upto Rs. 5,000
• District Purchase Committee above Rs. 5,000 and upto Rs. 15,000

In case of value exceeding Rs. 15,000 the matter will be referred to Head Office for execution of procurement.
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1.4 The Purchase Committee consist of the following members:

Head Office

a) Chief Executive Officer Chairman
b) Chief Financial Officer Member
c) Manager Admin Member/Secretary

District

a) Respective District Manager Chairman
b) Respective Field Manager Member
c) Executive Accounts Member
d) Executive Admin Member/Secretary
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As a matter of routine, the Purchase Committee should meet on a specified day every week to review and approve the purchase recommendations formulated during the preceding week. Emergency meetings of the committee may be convened to deliberate and decide cases involving purchase of items, which are required urgently.

1.5 The main functions of the Procurement Committee are summarized below:

• Ensure that purchases are made within overall approved budgets or specific written authorizations have been obtained from the competent authority for requisitions falling outside the approved budget.
• Ensure that the items being considered for purchase are in accordance with the approved specifications stipulated by the requisitioning department and that the minimum quality standards are being met.
• Approve purchases only from reliable sources at competitive terms and prices.
• Ensure that funds will be available to meet the payment commitments being made with the vendors.

• Ensure that all procedural formalities have been duly complied with before making the purchases.

1.6 The specific steps involved in the purchase of Items are given below:

A) CASH PURCHASES

Responsibility/Action
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Head of Admin Function at HO and District Manager at District Office

Receives requisition having specifications of requisitioned items, quantity and the last purchase price for procurement from the stores function. Arranges for the purchase of items from the market.

Executive Admin

Contacts suppliers and obtains quotations from them. Forwards the quotations to the Head of Admin Function.

Head of Admin Function at HO and District Manager at District Office

Compares current prices with the previous purchase prices and if the prices have not fluctuated then selects the supplier and places order and communicates the decision to the competent authority for information.

In case where the current prices have changed from the previous purchase prices, prepares a report and forwards it to the competent authority alongwith the quotations for selecting the supplier.

Receives the name of the selected supplier from the competent authority and arranges for procurement of the requisitioned item from the selected supplier.

Executive Admin

In case where prior approval from concerned department is needed, forwards sample of the item to the Head of Admin Function for approval.

Head of Admin Function at HO and District Manager at District Office

Checks the sample and arranges for obtaining the approval from the head of requisitioning department prior to the procurement of the item.

Executive Admin

Receives petty cash from the head of Admin Function for the purchase of the item from the market.
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Purchases the requisitioned items from the supplier and forwards them alongwith the Invoice to the stores function. Enters the details of the items purchased in the Petty Cash Register.

Receives signed copy of the invoice from the stores function showing the acknowledgement of receipt of items and forwards invoice to Head of Admin Function.

Head of Admin Function at HO and District Manager at District Office

Signs the invoice and forwards it to the Finance & Accounts Function. Receives cheque, encashes it and replenishes the Petty Cash.

SPECIMEN REPORTS/DOCUMENTS
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1.  Purchase Requisition Admin – 23
2.  Stock Register Admin – 24
3.  Delivery Note Admin – 25A
 Register  Statement/Report  Document
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