AP Badge #01: Vendor Payments, Refunds of Revenue, Federal Excise Tax Exemptions-AP Badge #1

AP Badge #1 - PowerPoint

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This document outlines WASBO Accounts Payable “Vendor Payments Badge #1,” covering how school districts should process vendor payments, control risks, and handle special situations. It defines Accounts Payable as the business office function responsible for processing vendor invoices, reimbursements, refunds, and imprest reimbursements accurately and on time.<br /><br />A vendor is a legally registered business (not an employee) with a Tax Identification Number (EIN/SSN) and a Washington UBI number. Best practices for vendor setup include requiring a W-9 for new vendors, segregating duties between vendor setup and invoice payment (or using compensating controls in small districts), using one vendor number per vendor (with multiple addresses as needed), and applying consistent naming conventions to prevent duplicates.<br /><br />The training emphasizes vendor invoice processing and fraud prevention. Invoices must be initiated by the vendor and include adequate detail for goods or services. Red flags include PO boxes only, missing contact info, unusual goods/services, and suspicious formatting. A core internal control is the “three-way match”: vendor invoice, purchase order, and receiving verification (e.g., packing slip or documented approval). Guidance is provided for verifying invoice amounts against purchase orders, managing allowable variances (commonly up to 10% except for quotes/bids, which must match exactly), and ensuring service invoices include dates, descriptions, and hours because service invoices are higher fraud risk.<br /><br />Additional topics include exceptions to the three-way match (utilities, some small purchases, direct payments), limited and policy-based use of prepayments (with valid vendor source documents), early payment discounts (e.g., 2/10 net 30) and evaluating whether discounts are beneficial, and late fee limits under Washington law (maximum 12% annually/1% monthly).<br /><br />The document also covers federal excise tax exemption on taxable fuels for district use, requiring tax-exempt certification and ensuring invoices exclude excise tax. Finally, it explains “refunds of revenue” to parents/students, requiring a refund request form, approval, original receipt support, and using the original revenue code (not an expenditure code).

Keywords

WASBO Accounts Payable Vendor Payments Badge #1

school district accounts payable

vendor setup W-9 EIN UBI

segregation of duties vendor maintenance

vendor invoice processing fraud prevention

three-way match invoice purchase order receiving

service invoice verification dates hours descriptions

prepayments policy and supporting documents

early payment discounts 2/10 net 30 and late fee limits

refunds of revenue to parents or students