AAM Program Operating Procedures
AAM Program Operating Procedures
Updated: 9/12/03
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[Accounting Structure]
[Purchasing Goods: Requisitions and Purchase Orders]
[Purchase of Services: The Check Request]
[Travel Policies]
[Budget Reports, Procedures for Changes and Corrections]
[Indirect Costs Policy]

ACCOUNTING STRUCTURE

1.       Fiscal Year

The AAM Business Office (AAM) operates on the twelve-month federal fiscal year calendar that ends September 30th.

The AAM uses a nine-digit ledger system for expenses (11 digits effective November 2003). Each ledger number is composed of three parts: The first three digits represent the educational institution, the next four digits represent the expense category and the remaining two digits represent the type of expenditure. A detailed explanation of these codes is found on AAM Budget Line Item Definitions.

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PURCHASING GOODS:
REQUISITIONS and PURCHASE ORDERS

For partners with limited resources, the AAM Business Office can assist in the administration of high price/large quantity purchasing (purchases exceeding a total of $10,000). In providing these services the AAM seeks to realize the maximum value for every dollar expended.

The AAM may assist in the following:

• Coordinating the procurement of goods and services
• Maintaining relationships with the vendors that service the ERC & AAM
• Reviewing all requisitions to ensure the adequacy of funds, ledger numbers, and authorized signatures
• Accounts Payable for select purchases

Before making your purchase, review the AAM Prior Approval Form to ensure your purchase does not require prior approval from the Education and Research Consortium (ERC) and/or the Library of Congress (LOC).

The ERC operates on a requisition/purchase order system. Our basic policy is to obtain all supplies, equipment and services at the lowest cost consistent with quantity, quality and availability of the items at the time of purchase. In conforming to this policy, the cost of the purchase and the delivery time required will be considered. Competitive price quotes will be solicited whenever practicable. Competitive price comparisons are required for all individual goods exceeding $500.00. If purchase is made from other than the low cost vendor, a detailed explanation must accompany the requisition. All such requests, along with any emergency requests where competitive quotes are impractical, must have the written approval of the ERC Executive Director or the AAM National Project Director. Large scale services or purchases that exceed $100,000 require a formal RFQ.

NOTE: Only the ERC Executive Director and the AAM National Director have the authority to obligate the ERC financially. This practice applies to all requisitions regardless of the source of funding.

All items ordered directly by the AAM Business Office will be deducted from your budget, your institution is not to be reimbursed for it and the expenditure will be reflected in your balance sheet.

All funds deposited with the AAM, regardless of source, are ERC funds and must be handled in accordance with ERC policy.

Budget line item numbers are assigned in the authorized budget. The authorized budget will be given to each partner director at the beginning of each fiscal year. Budget line item names, numbers, or descriptions may not be altered by anyone other than the AAM Business Manager or ERC Accountant.

When the AAM Business Office coordinates a purchase, a purchase order is prepared from a requisition or product specifications sheet and price comparisons provided by the partner. Only the AAM Business Office is to assign a purchase order number to a requisition. Once a purchase order is prepared, the fiscal intention of the institution to purchase the requested items is called an encumbrance. An encumbrance entry is then made against the AAM partner’s budget.

1. Cancellation or Modification of Orders
   Requests for cancellation or modification of purchase orders including an increase or decrease in the dollar amount of the order should be submitted to the Business Manager in writing by the Partner’s AAM Director, stating the reason for the change and referring to the purchase order number and vendor’s name and address. No deviations from the purchase order are allowed without the AAM Business Manager’s approval.
   
2. Damages and Shortages
   In cases of damage or shortage on shipment, a written report should be submitted immediately to the AAM Business Manager, including the following details: purchase order number, date, vendor, extent of damage or shortage.
   
3. Mistakes in Shipping or Invoicing
   Mistakes in shipping or invoicing should be reported promptly in writing to the AAM Business Manager referring to the purchase order number and vendor involved.
   
4. Returns for Credit
   When a vendor has shipped items as specified on a purchase order, they have legally complied with their part of the contract and are under no obligation to accept for credit any of those items delivered as specified. Acceptance of a return by the vendor is by no means automatic, and a restocking charge may be incurred. This charge will be assessed to the requisitioning partner.

5.       Gifts, Gratuities, and Conflicts of Interest

It is the policy of the ERC to decline personal gifts or gratuities in connection with the purchasing function. ERC staff or the staff of ERC-sponsored projects may not accept personal gifts or gratuities from any current or potential supplier of goods or services to the ERC.

1. Conflict of interest
   The AAM does not enter into purchasing contracts with students, faculty and staff or members of their immediate families without approval of the AAM National Director or ERC Executive Director. An acquisition from a business in which an employee has an interest is prohibited unless full disclosure of the background facts is presented in writing to the ERC beforehand. Interest is deemed present if the employee and/or his or her spouse or unemancipated minor children own ten percent or more of the assets of the business.
   
2. Minority Suppliers:
   The ERC is committed to the principles of Affirmative Action and shall endeavor to apply these principles in its purchasing with the objective of fostering greater participation by disadvantaged and women-owned enterprises in its procurement activity.
   
3. Sole Source:
   A sole source purchase is one wherein an item that is needed can only be purchased from a single source. This situation makes it impossible to obtain competitive bids. The ERC may require documentation from the requisitioning AAM partner to justify a sole source purchase if it becomes necessary.
   
4. Supply Sources:
   Requisitioning departments are encouraged to suggest sources of supply for unusual items.
   
5. Vendor Qualification:
   Vendors doing business with the ERC for the first time may be evaluated as to how well they perform. In addition, references may be checked, formal interviews conducted when possible and government bidders lists checked to make sure they are qualified vendors.
   
6. Requests for Bids or Quotations:
   Competitive pricing for goods and services will be secured in accordance with the following guidelines:
   
   1. Competitive prices are required for all items exceeding $500.00. As noted above, it is the ERC’s policy to obtain the lowest cost possible consistent with quality, quantity and availability. All requisitions over $500.00 must have three (3) written comparisons attached; if purchase is requested from other than the low cost vendor, a detailed explanation must accompany the requisition. All such requests, along with any emergency requests where competitive bidding is impractical, must have the written approval of either the ERC Executive Director or the AAM National Director.
      
   2. A formal RFQ must be sent out for any purchase or single project expenditure exceeding $100,000.
      
   3. Smaller, more commonly purchased items that do not require an RFQ but exceed $500, require written price comparisons. Acceptable media for written price comparisons include reputable online vendors, catalogs or an email or letter from an established brick and mortar vendor.

6.       Errors in Bids or Quotations

Bids or Price Quotes are required. Vendors are responsible for the accuracy of their quoted prices. In the event of a discrepancy between a unit price and its extension, the unit price will govern. Quotations may be amended or withdrawn by the bidder up to the bid closing date and time. After that time, in the event of an error, bids may not be amended but may be withdrawn prior to the acceptance of the bid. After an order has been issued, no bid may be withdrawn or amended unless the ERC considers the change to be in the ERC’s best interests.

1. Late Quotations:
   It is the vendor’s responsibility to ensure that quotations are received by the ERC no later than the appointed hour of the bid closing date as specified on the request for bid. Late quotations will not be considered and will not be opened.
   
2. The Confidentiality of Quotations:
   Price quotations are given to the ERC in confidence and shall not be revealed to any other vendor or unauthorized person.
   
3. Demonstration or Sample Material:
   AAM project personnel wishing to see samples or have equipment demonstrated should contact the vendor directly. Project personnel are reminded to advise the prospective vendor that a purchase order will be issued by the ERC should a procurement decision be made. Vendors are to provide their own insurance coverage for any material left at the ERC or partner.
   
4. Sales Agreements:
   It is in the best interest of the ERC to refrain from signing vendor sales agreements. If a vendor requires their document to be signed, the ERC Executive Director or the AAM National Director will sign for the ERC only after a properly executed requisition is received. A copy of the agreement will be retained in the AAM partner’s file at the ERC.

1. Emergency Orders
   Emergency orders must be kept to a minimum. Generally, emergency order procedures will not be used unless the savings realized by normal procurement practices would be offset by a corresponding or greater loss to the department as a result of the delay. Failure to anticipate a need is not, of itself, considered a bona fide emergency. An emergency order must go through the AAM Business Manager. Prior to initiating an emergency purchase, verbal permission must be received from the AAM National Director.

   To initiate an emergency purchase, the authorized person at the partner site must state the nature of the emergency, vendor’s name and address. This must be followed up with a confirming requisition sent to the AAM Business Manager within one working day of purchase. The confirming requisition should contain the statement “Confirming”. Failure to provide the confirming requisition will result in non payment of the invoice.

2. Personal Orders
   Because of the tax-exempt status of the ERC, the AAM Business Office cannot issue purchase orders for personal purchases. Vendors are under no obligation to offer discounts to individuals, and do so with the understanding that their offer places the ERC under no obligation to do business with them except within strict business practices.

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Check requests are used when requesting Accounts Payable assistance from the AAM Business Office. Check Request forms can be obtained online at www.aamprogram.org. Each check request should be prepared in duplicate with a copy attached to the invoice, price comparisons, and contract or purchase order and submitted along with your partner’s monthly reimbursement request.

Unless delegated in writing, all forms of lease, lease purchase or rental agreements for the procurement of material or services billed directly to the ERC must be signed on behalf of the ERC by the AAM National Director and ERC Executive Director. A copy of the agreement will remain on file at the AAM Business Office

Certain items of equipment are covered by service contracts in order to assure continuing efficient operation. Unless delegated in writing, forms required by service companies billed directly to the ERC, must be signed on behalf of the ERC by the AAM National Director. Service contract payments are handled by check request or as part of the monthly reimbursement request.

3.         Professional Services and Honorarium of Individuals and Partnerships

Contracts for professional services such as outside consultants will be paid by the educational institution and included in the monthly reimbursement request. Partners are responsible for maintaining contractor’s time and effort reports. If the consultant is paid directly by the AAM Business Office, the Check Request or Professional Services Contract must include a federal identification number (social security or employer ID #) and a complete address for form 1099 income tax purposes. A standard Professional Service Contract or other approved letter of appointment must be attached to the reimbursement request and approved by the AAM National Director or the ERC Executive Director.

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1.   Travel - ERC Direct Reimbursement

It is the ERC’s intent to allow for adequate, comfortable (not luxury) accommodations for employees who are required to travel on AAM business and it is expected that employees will use discretion and good judgment in the spending of AAM funds. Use of first class, resort hotels, luxury restaurants, individual taxis to and from the airport, and items of like nature are considered to be in excess of normal business needs. Gratuities are to be limited to 15%. Exceptions are made for service charges directly assessed by the service provider such as a hotel or restaurant. Each employee is expected to be familiar with and abide by these policies.

RECEIPTS ARE NECESSARY FOR EXPENSE REIMBURSEMENT.

1. Foreign Travel:
   Written prior approval is required for foreign travel.
   
2. Expense Record Form:
   After travel has been completed, an expense report with substantiating receipts must be submitted along with the monthly reimbursement request recording reimbursements due the employee.
   
3. Transportation Costs
   Mileage for ERC staff travel will be reimbursed at .36 per mile if personal automobile is used. Mileage for AAM Partner travel will be reimbursed at the current rate offered by the particular institution with which the employee is affiliated. Attach receipts to the expense report for all expenses except mileage.
   
4. Other travel related costs
   Reimbursement for legitimate travel will be provided in the categories listed below. Receipts must be attached to the Expense Report for expenses to be covered by AAM funds.
   
   1. Local transportation-this includes rented automobiles, limousine service to and from the airport, bus or taxi fares and parking fees
   2. Lodging-this includes only the costs of the room and tax
   3. Meals-meals are reimbursed on an individual meal basis with receipts attached
   4. Tips-this includes tips for meals, bell hops, taxis, etc. It is general ERC policy that gratuities are not to exceed 15%. Exceptions are made for service charges directly assessed by the service provider such as a hotel or restaurant
   5. Registration Fees-registration fees for project-related meetings that you have attended will be reimbursed
   6. Miscellaneous-Miscellaneous expenses, such as ERC/AAM telephone calls, will be provided for with appropriate explanation and documentation.

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BUDGET REPORTS, PROCEDURES for CHANGES and CORRECTIONS

Once budgets are established by approval of the governing authorities, individual partners may begin spending in accordance with the guidelines enumerated above. Each AAM site director will receive a quarterly report indicating the budget by line item, the amount expended by line item, and funds remaining. Changes in funds allocated to individual line items must follow the Budget Line Item Transfer Procedure.

Corrections in reimbursement requests are normally done by the Business Manager in conjunction with the appropriate accounting personnel at each school. AAM site director is responsible for maintaining an accurate perspective on the budget and expenditures within their project. Please contact the Business Manager for assistance in correcting entries on your accounts.

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Indirect Costs Policy

The AAM program is unlike most research grants that require the sponsoring institution to purchase specialized equipment and maintain extensive facilities. The grant reimburses the sponsoring institution directly for salaries, benefits, furnishings, equipment, supplies, telecommunications, and travel incurred by staff engaged in project activities. The Library of Congress and our supporting members of Congress and the Senate agree with this position.

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An Adventure of the American Mind is a Library of Congress funded program, administered through the ERC.
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