Materials Management Functions
 
The Materials Management applications must provide the NCAS with capabilities for managing and controlling the State's purchasing and accounts payable policies and accounting for the inventoried assets.  These functions include Purchasing, Accounts Payable, Fixed Assets, and Inventory which are completely integrated within the Materials Management system, as well as with the General Ledger and Budget Control process.

The Materials Management modules are currently integrated components of the NCAS with the exception of the Fixed Assets Module (FA).  Figure 5, along with the following paragraphs by business application, portray the fully integrated process.


Figure 5.  Overview of Current Materials Management Process

 
Through shared vendor and policy information, Purchasing and Accounts Payable functions can freely communicate without the usual control issues associated with duplication of files and batch interfaces.  Accounts Payable shares purchase order information from Purchasing and updates the invoiced-to-date amount on the purchase order real-time.  Receipts are entered and referenced to a purchase order number, ensuring accurate posting of deliveries to each purchase order line.  Receipts that cannot be identified or that do not fit matching criteria are identified, placed on hold, and reported for buyer action.  Each receipt is checked for proper delivery points and verified that the quantities received and the receipt date are within tolerances already defined on the purchase order.  Another receipt requirement, inspection of goods, is handled through dock-to-stock tracking.  This feature tracks the inspection of materials according to a table of routing and inspection areas.

Accounts Payable performs the invoice audit and approval functions by checking invoice details such as amounts, unit price, terms, tax, freight, etc. against the purchase order.  Data entry effort is minimal, because invoice details are built from the purchase order and displayed on-line.  Accounts payable clerks have to deal only with the exceptions, resulting in maximum efficiency with full control.  The NCAS system uses a PC-based, laser printing process to support the creation of vendor payments.  The laser check printing process has strong internal controls, including password protection access to the check printing software, the use of security chips in the printers themselves, as well as the use of blank check stock (vs. pre-printed check forms).  Agencies print checks locally, using a nightly check file that is downloaded from the NCAS mainframe system.

The Inventory integration with the Purchasing system is designed to address warehouse replenishment needs.  Information about stock items and requisitions for replenishment are passed from Inventory to Purchasing, and purchase orders and receipts pass from Purchasing to Inventory.  The following information is shared between the two systems:  items, requisitions, purchase orders, and receipts.

Requisitions are created to replenish warehouse inventory.  They can be generated either automatically in batch by the system, or created manually by the inventory replenishment planner.  Once approved, these requisitions automatically pass to Purchasing to be converted into purchase orders.  When goods are received in the Purchasing function, the quantity is passed to Inventory to reduce the on-order quantity and increase the on-hand quantity.  If goods undergo inspection in the Purchasing function, the active on-hand quantity is not increased in the Inventory until the goods have passed inspection.

The Materials Management systems maintain accounting integrity through integration with the General Ledger.  Distribution entries from purchase orders, Accounts Payable and Inventory issues and replenishments are validated directly against the General Ledger.  Offsetting cash, assets accounts, and encumbrances are automated through the accounting rules or system policies to ensure accounting accuracy.

The integration of the Materials Management functions with the budgetary control function provides the funds-checking capability required for the NCAS.  All Purchasing, Accounts Payable, and Inventory transactions (commitments, encumbrances, inventory consumption and replenishment, and expenditures) are checked real-time to the available funds amount calculated through budgetary control functions.  Real-time funds checking ensures expenditures are kept within the authorized budget and provides advanced knowledge of the budgetary status for spending decisions.

Purchasing
The Purchasing function is a real-time, decision support application designed to help manage the entire procurement cycle. This cycle includes requesting, competitive bidding, buying, receiving, and inspecting.  Purchasing agents' day-to-day decision-making is fully supported with tools and information on-line to manage the supplier base and service the purchasing function for the State in a timely and efficient manner.  Figures 6 and 7 display the participants and tasks in the Purchasing or Competitive Sourcing and Vendor Selection processes, respectively.

Purchasing Financial Functions
The State's purchasing policies and strategies are the basis for the system and are incorporated into a policy hierarchy.  The policy hierarchy consists of rules that define how to handle purchasing functions within the government environment.  The most general purchasing policies represent the highest level of the hierarchy, and each successive level below the general policy defines further levels of detail to the general policy.

As requisitions and purchase orders are processed, the policy hierarchy ensures that the majority of the purchasing activity is handled automatically and within the required purchasing guidelines.  If a particular situation does not fit the general rules, a purchaser may change the hierarchy default to fit the situation; however, the system tracks in detail the full procurement process from requisition to payment.

Figure 6.  Overview of Current Purchasing Process
The Purchasing function provides:




Figure 7.  Overview of Current Vendor Selection Process
Purchasing Reporting Functions
Reporting within the Purchasing function supports: Accounts Payable
The Accounts Payable function provides an effective and efficient cash management process by automatically calculating the discount due date, discount amount, and payment due date according to standard vendor terms or system policy, thus maximizing cash availability.  For inventory transactions, the Accounts Payable function recognizes price variances, and automatically posts the adjustments to the General Ledger.  Figure 9 shows the details of the Current Accounts Payable process.  For clarity and completeness, a flow of the Current Receiving Process is also presented in Figure 8.  The Receiving process contains multiple decision points necessary to bring a receipt to the point where the Accounts Payable staff are involved and pay for the items.

Figure 8.  Overview of Current Receiving Process

Figure 9.  Overview of Current Accounts Payable Process

Accounts Payable Financial Functions
The Accounts Payable function provides:

Accounts Payable Reporting Functions
The Accounts Payable function supports the following reporting requirements: Fixed Assets
The Fixed Assets function provides timely and accurate information about the State's fixed assets.  The Current process is described in Figure 10.

Figure 10.  Overview of Current Fixed Asset Process

Fixed Assets Financial Functions
The Fixed Assets function meets the following NCAS objectives:

Some of the specific features included with the function are: Fixed Assets Reporting Functions
The Fixed Assets function provides reporting for: Inventory
The Inventory function tracks and maintains inventory in a cost-efficient manner, ensuring the integrity of the inventory balances while providing the flexibility required at the agency level.  The Inventory design allows for multiple warehousing, staging areas, and inventory item differences.  The financial integration of Inventory to Purchasing, Accounts Payable, Budgetary Control, and the General Ledger, along with Inventory policy defaults ensure uniform and appropriate financial information required for cash basis, GAAP, and management reporting.

Figures 11 and 12 cover the current inventory replenishment and inventory issuing processes.

Inventory Financial Functions
The Inventory function supports:

Figure 11.  Overview of Current Inventory Replenishment Process
Figure 12.  Overview of Current Issue Inventory Process

  Inventory Reporting Functions
The Inventory reporting capabilities include: