PROCEDURE

Steps
1. Cost centre manager will provide funding and cost code availability.

2. Procurement staff will seek lease quotations from contracted lease companies or use the lease
portal with contracted lease company - Procurement Office seeks three quotations from
contracted leasing companies or from a dedicated lease facility.

3. In PO module a RFQ will be created and will pass through a fund checking (in FA Purchases
Expense account) and approval. This will be approved through the approval hierarchy, which the
requester belongs to. A COMMITMENT is created by the system. On creating a PO the
Commitment Encumbrance will be reversed and an OBLIGATION encumbrance created. The
Receiving process will also be handled in the PO module where the Invoice is matched with the
PO. The receiving process would release the encumbrance (obligation) by the system and the
actual transaction charges sets in.

4. In PO module through Receipt function an authorized Procurement staff receives leased

equipment asset and then distribute to the appropriate cost centre. Blanket Purchase Orders and
associated Releases are created and approved in Oracle Financials.

5. In AP module AP staff will establish the payment schedules (monthly or quarterly as required) for
lease asset against approved Blanket Purchase Order. Also since there is no integration between
AP and FA, the invoicing process would have created a charge to an Expense Accrual account
instead of Asset Clearing account where the Asset Additions in FA would have credited.
Therefore two GL adjustment entries would have to be made (an Actual Journal and an
Encumbrance Journal) to clear these accounts and the FA Purchases Expense account
encumbered.
6. In FA Asset Clerk will record details of lease asset including asset Number.