Internal Policy and Procedures

Financing (Lease/Purchase)

POLICY:

All lease/purchase financing should be conducted through DOA Capital Finance. Capital Finance can be used to finance capital assets, some software, and certain infrastructure items. Capital Finance can not be used to finance permanent structures or buildings. Please review the referenced Capital Finance FAQ document for other applications and restrictions.

PROCEDURES:

Whether triggered by receipt of a requisition or via a phone call/e-mail from a department the Agent must determine whether the need is for a lease-to-purchase (Full Pay-Out Financial Lease) or a simple rental transaction (Operating Lease). A rental is a transaction in which no purchase is anticipated at the end of the rental period and the UW never has full ownership of the product being rented. A lease to purchase in the context of this IPP means the UW will ultimately own and hold title to the item being financed by DOA Capital Finance.
(Note: If the transaction is a lease-to-purchase, the account code referenced on the requisition should be 4605)

1. Using the appropriate state procurement rules, the Agent conducts an official procurement process for an outright purchase of equipment or product in accordance with state procurement rules and departmental policy.

2. The Agent, upon completion of appropriate procurement process and prior to award, will complete the Master Lease Program Request for Use and Approval Form (DOA-2480). The WiSMART Accounting codes required to complete the form are obtained from Accounting Services Operations Manager or their designee upon their review of the requisition.
The Agent will Fax or e-mail the completed original Request for Use and Approval form and a quote or cost summary document to Capital Finance, at 266-7645 (fax) (DOACapitalFinanceOffice@wisconsin.gov ).
Capital Finance will prepare a Master Lease payment schedule based upon the information provided and the program's current interest rate (Lead time 2-3 weeks).

3. Agent reviews the Master Lease payment schedule with the department and if the estimated payment terms are acceptable Agent gains written approval to proceed in the form of an e-mail or accepted NOBR from the appropriate authority in the department. Agent informs Capital Finance to proceed with the financing via fax at 266-7645 or via e-mail) (DOACapitalFinanceOffice@wisconsin.gov ).

4. Once the lease is officially accepted for financing by Capital Finance, the Agent will receive a Notice of Confirmation of Approval to Utilize the Master Lease Program which should be copied and sent to the department (original kept for inclusion with the final Vendor File paperwork).

5. Upon receipt of departmental approval of the final lease payment schedule and the Notice of Confirmation of Approval to Utilize the Master Lease Program the Agent will execute the award and PO:

a. Issue the appropriate Intent to Award (ITA) or Notice of Award
(NOA) to the vendor as per procurement rules and dept policy.

b. Release a purchase order (PO) in BusPO in accordance with
procurement rules making sure to use the “CAP” blurb along with any other applicable blurb messages or coding.

c. Immediately upon PO release Agent will prepare and deliver to req
processing a pull PO for action form requesting that the vendor
copy of the PO, and the Accounting Report be pulled from the next
day PO print process and delivered to Agent.

d. That next day the Agent will create two copies of the vendor PO
issuing one to the vendor (via whatever means is required), one to
the Accounting Services Operations Manager or their designee, and
one to Capital Finance.

Agent will destroy the standard Accounting Report to prevent the
potential of direct vendor payment in error.

Agent will work with req processing to cancel the PO in SFS and
record a BusPO action log entry code “COMX”. The BusPO PO
remains open to the vendor.

6. In anticipation of delivery Agent will send two copies of the Master Lease Finance Equipment Receipt and Acceptance to the department asking for the return of one signed copy upon satisfactory receipt and acceptance of equipment. Upon receipt of signed copy, Agent should notify Capital Finance so a final payment schedule can be generated.

7. The Agent will receive an initial Equipment Payment Schedule for signature from Capital Finance. The original must be signed in accordance with campus policy, dated and returned to Capital Finance via inter-D (copy to the Purchasing Services All File record).

8. As directed by the “CAP” blurb, the invoice will be sent to Purchasing Services. Upon its receipt Agent makes sure that they have received a signed copy of the Memo to Department. Master Lease Finance Equipment Receipt and Acceptance. This form should NOT be signed until it is known that the department is completely satisfied.

Agent then will fax or e-mail the invoice and the Notice of Equipment Acceptance form (DOA-2481) to Capital Finance authorizing them to release payment to the vendor. Under no circumstances is the vendors invoice to be sent to Accounting.

9. The Agent should request that all lease documents be filed in the Purchasing Services ALL FILE. Procurement process documentation should be filed in the vendor file or bid file as appropriate in accordance with departmental policy.

Note:
If an advance or a down payment is to be made, it must be done through Capital Finance. It should NOT be made to the vendor directly. The down payment should be clearly referenced and factored into the initial requisition. The Agent must notify Capital Finance up front (process step #2 above) that a down payment is being submitted by clearly identifying the amount and its associated funding line on the Master Lease Program Request for Use and Approval Form (DOA-2480)

Lease payments, as identified on the most current schedule, will automatically be deducted via WiSMART by Capital Finance on or about February 15 and August 15, and issued to the trustee (US Bank) March 1 and September 1 for the duration of the lease period. If the UW has indicated that there will be a down payment, that portion will be withdrawn from the identified funding appropriation and transferred to Capital Finance immediately after Capital Finance has paid the vendor.

Revised payment schedules may be periodically sent by Capital Finance. Each subsequent schedule replaces the one before it. A copy of any revised schedule must be sent to the Accounting Services Operations Manager or their designee and will also be filed with existing paperwork at Purchasing Services.

Each fiscal year there is a buyout option which will be shown on the payment schedule. Buyout may be arranged at other times via discussion with Capital Finance (266-0739)

REFERENCES:

Draft DOA FAQ document
Purchase order message text for “CAP” Blurb
Master Lease Factor Grid (for reference)
DOA Contact Information:
State of Wisconsin
Dept. of Administration-Div. of Executive Budget & Finance
Capital Finance Office
101 E Wilson St 10th Floor
Madison WI 53707 7864
Phone: 608-266-0739 FAX: 608-266-7645 Email: doacapitalfinanceoffice@wisconsin.gov