Accounts Payable As-Is Processes Main Functional Areas September, 2002

1. Accounts Payable As-Is ProcessesMain Functional AreasSeptember, 2002 Invoice Payment Process Stop Payment Vendor Relations Pre-Audit 1099 Reporting

2. Accounts Payable As-Is ProcessesInvoice Payment Main Processes VPAM: Voucher Payment and Maintenance Invoice Auditing Key Payment in VPAM Verify Payment Editing & Check Printing Begin Distribute Checks End Return to Page 1

3. Accounts Payable As-Is Invoice ProcessesInvoice Auditing Receive Invoice from Vendor Has PO #? Sort Invoice in Alpha. Order Audit Invoice Match Invoice with PO Yes Begin Copy to Vendor Relations No Copy to Vendor Prepare & Distribute Dispute Letter Return Invoice to Vendor Copy to Department OK to Pay? Stop Stop No Original to Be Filed with Voucher Copy to Department Distribute Invoice for Payment Yes Copy to Vendor If 3 Copies Received Payment in International Currency Over 30 Days and Interest >$5 Positive Approval Less Than 30 Days Negative Approval Less Than 30 Days Route Invoice to Manager Route Invoice to Dept. Route to Cash Mgmt. Yes Returned Within One Week? Payment in Foreign Currency? Manager Calculates Interest Call Department No No Route to Keying Return to AP Main Process Yes

4. This diagram explains the invoice auditing process. The same process applies to the invoice auditing performed by “delegated” departments. If blanket order is past ending date, use the 45-day rule if a new order number is not in the Purchasing System. Accounts Payable As-Is Invoice Processes Audit Invoice Verify Received Document Is An Invoice Verify Invoice Vendor Name Agrees with PO Vendor Name Verify Invoice Is Dated Post Order Date Verify Order Ending Date Blanket Order? Yes Begin No Note Partial Shipment on PO Work Copy Match Invoice Items with PO Work Copy Verify Items Match with PO Work Copy & Verify Prices Verify Prices Partial Shipment? Yes No If Manual Written Invoice, Verify Extended and Total Amounts Deduct Sales Tax If Service Was Provided in WI Verify Ship-To Address Agrees with PO Work Copy Verify Freight Terms Mark Payment Type in Audit Box in Green Ink (Final, Partial, Misc.) Record on PO Work Copy Inv #, Inv Date, Audit Date & Amount Over $500 Route Copy of Invoice to Property Control Class Code 4000s? Class Code 3221, 3227 or 3228? Yes No Yes No Class Codes Split? Route Invoice to RSP Route Invoice to Keyers Return to Main Process Return to Invoice Auditing Sub-Main Yes No No Record Inv # and Routing Date on PO Work Copy Write Out Split Class Codes for Keyers Positive Approval? Apply Sticker on Invoice Yes

5. Accounts Payable As-Is Invoice Processes Key Invoices in VPAM • Note: • Except for internal transfers, there are no batch totals during data entry. • A batch cover sheet is attached if it is received. No batch cover sheet is used for internal transfer batches. Receive Invoice from Auditors Receive Invoice from Delegated Depts. Key Invoices into VPAM Problems in Data Entry? Route Invoice to Auditor Yes Begin No System Generates Voucher, Remittance Copy, Prelist in CARDS Receive Invoice from Fin. Ops for Internal Transfers Audit Invoice Return to AP Main Process

6. Accounts Payable As-Is Invoice Processes Verify Payment Receive Vouchers, Remittance Copies, Pre-list, Reports from DoIT Lead Worker Matches Voucher etc. to Documentation Verifiers Check Amount, Vendor & Address Begin Lead Workers Update Changes in Pre-List (CARDS) Keyers Make Correction in VPAM Prepare Correct Slip & Route to Keyer Data Entry Correct? No Yes Lead Workers Check Batch Total Corrections OK? Investigate & Resolve Select & Release in TMNT Release Job for Overnight Process Organize & Deliver Vouchers to Fin. Ops No Yes Return to AP Main Process

7. Major Transaction Types: • Budget: 20s • Revenue: 30s • Encumbrance & Reqs: 40s • Payment: 50s. Accounts Payable As-Is Invoice ProcessesEditing & Check Printing Batched by payment type & totals. First 5-digit of a VO# is List #. From Purchasing System. Receive Reports from DoIT Begin List Number Totals Check Number Range Daily Edit & Post Batch Control Report Transaction Count Table Entry Change Report Daily Edit & Post Transaction Exceptions Listing Combination of UDDS, Activity & Class Codes. Discrepancy Between Req & PO Exceeds $100? Review Report No Type 50s Transactions(No $ totals). Correct Errors on 3270 EPCC Suspense File Yes Type 47 Errors? No Request DoIT Run Job 0421A Adjust Reqs. On 3270 Fringe/OH Encumb. Errors. Yes Investigate & Correct Errors on EPRQ View Job Totals on 3270 End Calculate & Compare Totals Investigate & Correct Remaining Errors Totals Agree? No Yes Request DoIT Run Job 0421F Load File to WisMART State Treasury Signs Checks Return to AP Main Process

8. Accounts Payable As-Is Invoice Processes Distribute Checks Receive checks from State Treasury Match Check to Remittance Copy Sort Checks Based on Voucher Batches Begin Fin. Ops Verifies WisMART Transactions & Totals Route to Supervisor Matched? No Yes File Room Label Voucher Box File Room Mails Checks & Remittance Copy Sort Envelopes Based on Distribution List Stuff Envelopes Supervisor Investigates & Resolves International, domestic, campus mail, courier pick-up, Canada, Mexico, oversized Envelope, over-stuffed Envelope, US mail pre-sorted, etc. File Room Attaches Edit & Post Exception List to Vouchers File Room File Vouchers File Warrant Registry Return to AP Main Process

9. On average, there are about 20 to 30 stop payments per week. Accounts Payable As-Is Processes Stop Payment Receive Notification from Dept. of Duplicate or Wrong Payment Prepare Stop Pay/Correction Form Pull Out Voucher, Check & Remittance Copy Route to Cash Management Check Mailed Out? No Begin Yes Request Proof of Payment or Stop Pay from State Treasury Vendor Relation Issues a Credit Memo Auditor Approves Credit Memo Check Stopped? State Treasury Reissues Check to the Same Vendor No Yes Keyers notify vendor if applied credit amount is more than invoice amount. (Credit memo data is maintained in Excel. Keyers Apply Credit Memo to Next Invoice Route Check & Voucher to Cash Management Payment Correction Applied Within 6 Months? Yes No End Vendor Relation Requests a Refund Check From Vendor Return to Page 1

10. Accounts Payable As-Is Processes Payment Correction Process Reissue Check? Reissue for More Than Original Amount? Check deposited to contingent fund for the correct amount, to the Req. or PO for the difference. C.M Deposits Check Yes No Begin No Yes C.M. Deposits check Deposit Check Reissue Check from the Contingent Fund for the Correct Amount C.M. Credits Req. or PO via DREV C.M. Credits Req. or PO via DREV A/P Reissue Check via VPAM End

11. Accounts Payable As-Is Processes Payment in International Currency by Cash Management Return to AP Main Process

12. Accounts Payable As-Is Processes Vendor Relations Main Process Begin Receive from Vendor Past Due Invoices, Statements, Dispute Responses Depts. Or Vendor Notify Missing Payments, Short Pays, Tax Not Paid, etc. Depts. Notify Problems with Negative Approval Invoices or Missing Payments Determine If Need A Credit Memo or Payback Check Verify with Original Voucher Need A Credit Memo or Payback Check Does Not Need A Credit Memo or Payback Check Send Denial Letter to Vendor Need Payback or Credit? No Yes Past Due Invoice Process Statements Process Dispute Response Process Adjust Incorrect Negative Approval Fill Out Payback Form Or Credit Memo File Copy of Letter with Voucher Invoice Payment Main Processes Return to Page 1 End

13. Accounts Payable As-Is Processes Vendor Relations – Statement Process Check the Dates of Items on the Statement Return to & Request Invoices from Vendor More Than 60 Days? Yes Begin No Stop Return to Vendor Relations Main Process

14. Accounts Payable As-Is Processes Vendor Relations – Past Due Invoice Process Determine If Invoice Paid Pull Out Voucher Verify Check # and Date Paid? Yes When Was Paid? Over 30 Days Begin No Less Than 30 Days Notify Vendor of Payment Stop Return to Vendor File Copy of Dispute Document Valid PO# & Not in Dispute? Return to Vendor Relations Main Process Has Previous Dispute Invalid PO#, Expired PO or No PO Yes Prepare Form 15 Invoice Payment Main Processes End

15. Accounts Payable As-Is Processes Vendor Relations – Adjust Incorrect Negative Approvals Dept. Notifies Incorrect Payment Determine Required Action Stop Payment Process Stop Payment Begin Adjust Payment Determine Type of Adjustment Credit Memo or Pay Back Return to Vendor Relations Main Process Transfer Between POs This process is performed by Accounts Payable, Fin. Ops or Departments. Prepare Non-Salary Cash Transfer Form Route Form to Fin. Ops. Adjust POs in VPAM Return to Key Payment in VPAM

16. Accounts Payable As-Is Processes Vendor Relations – Dispute Response Match Vendor Response to Dispute Copy on File Review Dispute and Vendor Response Invoice Payment Main Processes OK to Pay? Yes Begin No Resolve with Vendor, Purchasing & Dept. Resolved? Yes Return to Vendor Relations Main Process No Refer Dispute to Purchasing & Dept.

17. Data Verification Against Purchasing System: Order # Ship-To Address Vendor Contact Change Order Information Item Description Dates of Requisition Processing Statuses Pricing on Contracts Connection to VendorNet. List of Delegated Departments for Invoice Auditing: Chemistry PSL MDS WDVL Data Verification Against Legacy Systems INQR: EPRQ Data Display (PO Status, class code, PO Types, Dept Coding, etc.) INQP: PO Data GENT: Transaction 48 inquiries (Inquire PO# to get department contact person initials. Then though initials to get contact phone numbers.) INQC: to verify payment status on POs INQV: To verify payment status on vouchers. Accounts Payable As-Is Processes Invoice Payment Additional Information Return to Page 1

18. Pre-AuditRequisition Auditing Receive Requisitions from Dean’s Office Verify Class Code is Appropriate for Item Verify Description Is Complete Verify Accompanying Documentation Verify Both Dept. & Dean’s Approvals Begin Verify Req. Is for UW Business Return to Dean’s Office OK? No Yes Approve Requisitions Route Reqs. To Purchasing Other Requisitions. Return to Procurement Main Process Fund 133 Class Codes 4Ks, 2Ks, 3221, 3227 & 3228? Yes Route to RSP Postage Req. System Generates Voucher, Remittance Copy, Prelist in CARDS Verify VO Entry Create VO in VPAM No RSP Reviews & Approves Class Code 4Ks? No Confirming Req w/ Invoice Attached (<$5,000) OK? Yes Route 4Ks & 2Ks to Purchasing Yes No Property Control Returns Req. Property Control Verifies Req. Correct in VPAM Editing & Check Printing Distribute Checks Issue Other Reqs. Under RSP Negotiated Contracts End Reference Original Equipment PO # and Property Control # if Purchase is a Component of Capital Equipment. End

19. Pre-AuditEmergency Transaction Processing Dept. Prepares ET Request & Documentation Dean’s Office Enters Req. in EPRQ Dean’s Office Delivers Req. to Purchasing by 10am Purchasing Date & Time Stamps the Req. Dean’s Office Approves Begin Pre-Audit Picks up Req. from Purchasing Purchasing Creates PO Route to Purchasing by 11am PO Required ? Requisition Auditing Yes Any approval by RSP is routed by fax. No Cash Management Issues Check From Cont. Fund Route to Cash Management Cash w/ Order? Route to AP Auditor Invoice Auditing Yes No Deliver Check to Purchasing Front Counter by 3pm Checks for Pick Up ? Yes No Purchasing Mails PO or Calls for Pickup Mail Checks End

20. This process applies to direct charges for: • Utilities • Freight (except FedEx) • Gas credit card • Newspapers • Subscriptions • Travel agency invoices • Memberships & Registrations • DOA general service billing. Pre-AuditDirect Charge Processes Dept. Receives Invoice from Vendor Dept. Code Funding Source on Invoice Dept. & Dean’s Offices Approve Invoice Dean’s Office Route Invoice to Pre-Audit Pre-Audit Verify the Amount Is Correct Begin Pre-Audit Receives Invoice from Vendor Identify Which Dept. Made the Purchase Call Dept. to Get Funding Source & Approval Copy Invoice to Dept. Verify Funding Code Is Correct System Generates Voucher, Remittance Copy, Prelist in CARDS Create VO in VPAM Verify Type of Travel Expense Verify Purpose of Business Check Appropriateness of Purchase Verify VO Entry Fund 133 Class Codes 2000s? No Yes OK? Yes Route to RSP No Correct in VPAM Editing & Check Printing Distribute Checks RSP Reviews & Approves End

21. Pre-AuditDirect Charge Processes for FedEx Bills Receive Bills from FedEx Check INQM or UNAM for Dept. Contact Name Get Funding Source from Dept. Contact Person Code Funding on the Bill Funding Coded on the bill ? No Begin Yes Batch Bills (100/Batch) Calculate Batch Totals Once a Week Normally a week later. Create Transfer Worksheet in Excel w/ Dept. Funding Source Codes Contingent Fund Check to Vendor Create VO in VPAM from Contingent Fund Route Invoice Copy to Dept. Highlight Funding Source on the Bills Copy Bills Keyers Enter Transfers in VPAM End To replenish contingent fund.

22. This process applies to payments to individuals for: • Scholarships • Travel expense • Research subjects • Speakers & other service providers. Pre-AuditPayments to Individuals Report (PIR) Individual or Dept. Prepares PIR Form Dept. Approves PIR Form Dean’s Office Approves PIR Form Dean’s Office Routes to Pre-Audit Pre-Audit Routes to RSP Fund 133? Yes Begin No Calculate Tax Withholding (Based on Treaty for Foreigners) Verify If Payee a US Legal Resident Verify Name & Address Verify Dept. & Dean’s Approvals RSP Approves & Returns to Pre-Audit Foreign Payee or US Resident W/O SSN? Taxable Payment Based on Class Code? Yes Yes No No Match Class Code w/ Payment Purpose Verify Other Data Contact Dept. & Correct PIR Form Calculate Net Pay OK? No Yes • Class Code determines following additional data needed: • Home address for 1099 reporting • SSN for tax reporting • Visa information • Copies of receipts • If UW employee, whether payment should be made via payroll, etc. Complete Tax Calculation Sheet If It’s Missing Key to VPAM Missing Signature ? No Yes Return PIR Form to Dept. Complete PIR Form w/ Tax W/H Data Distribute Checks Editing & Check Printing End Begin

23. This process applies to payments for reimbursable expenses to UW and non-UW employees. Pre-AuditTravel Expense Report (TER) Individual or Dept. Prepares TER Form Dept. Approves TER Form Dean’s Office Approves TER Form Dean’s Office Routes to Pre-Audit Pre-Audit Routes to RSP Fund 133? Yes Begin Verify Reported Amounts & Dates Match w/ Receipts Verify Approvals & Totals Verify Nature of UW Business Verify Funding Code Verify Name & Address RSP Approves & Returns to Pre-Audit Return to Dept. Missing Receipts Or Approvals? Yes No System Generates Voucher, Remittance Copy, Prelist in CARDS Verify VO Entry OK to Pay? Yes No End OK? Yes Contact Dept & Correct the Form Approve the Form Key to VPAM No Correct in VPAM Editing & Check Printing Distribute Checks

24. Pre-AuditTravel Advance (TA) Initiation Dept. Prepares Request on TA Form Dept. Approves the Form Dean’s Office Approves the Form Dean’s Office Routes to Pre-Audit Pre-Audit Routes to RSP Fund 133? Yes Begin No Verify Contact Name & Phone # Verify Mail-to Address Verify SSN Verify Funding Code Verify Reason for TA RSP Approves & Returns to Pre-Audit Verify Amount < 80% of Estimated Expense Determine and Record Pay Back Date on the Form Missing Signature ? Return Form To Dept. Yes Begin No Record TA in Excel Worksheet Key to VPAM to Issue Check From Cont. Fund Travel Advance Replenishment OK to Pay? Yes S/B less than 30 days of travel completion date. No Contact Dept. & Correct The Form End

25. Pre-AuditTravel Advance (TA) Replenishment Use cont. fund coding to offset original TA. Employee Reports Expense on TER Form Employee Put TA# On TER Key TER To VPAM After Travel Completes Begin Pre-Audit Record TA Replenishment In Excel Worksheet Monthly Reconcile TA Worksheet With WISDM Employee Submits Personal Check for the Difference TA > Expense ? No Yes CM Deposits Check to Cont. Fund Pre-Audit Route Check To CM Check Submitted ? Yes No End Follow Up With Dean’s Office Check Submitted ? Yes No Notify Payroll For Payroll Garnishment

26. This process applies to advance payments for studies & research programs and for replenishment of petty cash. Custodian: is anyone who is responsible for non-travel advance money or petty cash. Begin Pre-AuditNon-Travel Cash Advance Initiation Custodian Request CM to Open a Bank Account Replenishable Req? Dept. Prepares Internal Req. & Custodial Agreement Dept. Approves & Enter Req. in EPRQ Dean’s Office Approves Req. Custodian signs Agreement Dean’s Office Signs Agreement Over $5,000? Yes No Verify Custodial Agreement Verify Funding Code Verify All Signatures Req. & Agreement Routed to Pre-Audit Call Dean’s Office Missing Document? Yes No Dean’s Office Submit Missing Document Approve & File Copy In file Room Route Documents To Cash Management Cash Management Reviews & Approves CM Writes a Check from Cont. Fund OK? Yes No CM Routes Check to Custodian Return Documents To Dean’s Office Replenishable Req? Yes No Non-Travel Cash Advance Replenishment CM Deposits Check to Custodian Bank Account End Begin

27. Pre-AuditNon-Travel Cash Advance Replenishment Dept. Prepares Non-Travel Cash Advance Accounting Form Custodian Signs The Form & Submits Receipts Dept. Approves Dean’s Office Approves After Expenditures Are Made Begin CM Records Exp. To Req. In EPRQ and to Non-Travel Advance System (Close If Final Payment) Form & Receipts Routed to Pre-Audit CM Closes Req. If All Money Is Accounted For Approve & Route to Cash Management Verify Req. In INQR Non-Replenishable Req? Yes No CM Routes Form to Accounts Payable Verify Custodian, Dept. & Dean’s Signatures Verify Funding Code Non-zero $ Balance Req. Needs To Be Closed? Yes No Zero $ Balance AP Enters Payment In VPAM System Generates Check Enter Payment In VPAM Approve Payment Verify Receipts File Room Sends Check to Bank or Custodian System Generates Check Return to Page 1 CM Deposit Check to Cont. Fund End

28. 1099, 1042S & Supplemental W2 ReportingQuick Book Process Overview MDSN Payment File (Legacy) Monthly QuickFile Reports Edits & Fixes W2: At Year-End Begin Other Campuses Payment Files (SFS) Assign & Edit 1042S Paid PIR Forms Currently Not Being Done Monthly Edited QuickFile Payroll File Print 1099 & 1042S Year-End Tape File To IRS System Merges With W2 Files Year-End End

29. 1099, 1042S & Supplemental W2 ReportingAdditional Notes • Payments are identified by the use of certain Class Codes (attached). • W2 Identifier/Class Codes: 2110, 2125, 2126, 2162, 2164, 2262, 2264, 3161, 3163. • 1042 Identifiers: • From PIR forms paid to non-US residents • Adjust in QuickFile based on information from paid PIR forms • Data edited in QuickFile: 1042S indicator (yes or no), 1042S income type, tax rate, exemption status and withhold taxes. Return to Page 1