In accordance with the Scottish Government procurement principles contained in CEL 05 (2012) and NHS Lanarkshire’s Standing Financial Instructions, we are introducing a rule of no PO no payment. From 1 April 2017, a Purchase Order is now required to be raised for all goods and services prior to the service being provided or the goods being received.

Currently, invoices that are received by the Accounts Payable department without a Purchase Order create the following risks to the board –

1. The system of internal control is being bypassed.  Individuals who may not have the authority to commit the Board to expenditure may be doing so.
2. The Board may end up paying for goods or services that it did not actually require.
3. The Board may require the goods or services, but pay more than it needed to because a non-contracted supplier has been used.
4. When an invoice arrives in accounts payable, and there is no approved and receipted order in place, significant additional administrative effort and cost is required to secure approval for the expenditure, resulting in a delay of payment to the supplier.   The Scottish Government expects the Board to pay all suppliers within 10 days, and these incidents lead to this standard being breached.

By implementing no PO no payment, this also creates efficiencies relating to authorising expenditure.

There are exceptions to this rule and the following types of expenditure do not require a Purchase Order to be raised –

• Postage and Carriage Charges
• Telephone/Pager Call Charges
• Line Rentals
• EE, Vodafone & BT Line Installations
• Books/Newspapers/Magazines/Periodicals
• Payments to Independent Medical/Dental/Pharmacy/Ophthalmic Contractors
• Professional Subscriptions
• Recruitment Agencies for the provision of staff
• Safehaven
• Training Grants
• Lecture Fees re Training
• Study/Training Materials
• Course Fees re Training
• Training Contractors
• Travel and Substinence
• Patients/Non-staff travel
• Petrol/Diesel
• Taxis
• Donations
• Emergency Flights
• Rates
• Surgical Appliances (Orthotics)
• Pharmacy
• Interpreter Services
• Payments to Patients/Staff
• Items purchased through Petty Cash

Any staff member who does not have access to PECOS will be given training to enable them to raise orders from this date. If you think this will apply to you, please contact Procurement.
There are instances when Purchase Orders are raised for these types of expenditure and where this is the case, you should continue to do so.

It should be noted that orders should be raised in advance and not as a result of an invoice arriving, in order to enable sound budget management.

Communications are underway now with suppliers to inform them that they must quote a Purchase Order number on all their invoices. From 1 May 2017, invoices received by the Accounts Payable Department that do not quote a Purchase Order number will be returned to the supplier and will not be paid. In these instances, suppliers will be asked to correspond with their Board contact to arrange a Purchase Order.

Should you require any guidance or support please contact Procurement at procurementsystems@lanarkshire.scot.nhs.uk