Objective: To establish a standardized process for the efficient, cost-effective, and compliant replacement and procurement of office items at Hosteeva.
Scope: This SOP applies to all employees involved in the identification, request, procurement, approval, and payment processes related to office items. It encompasses the procedures for both small and large purchases, including monthly office expense budgets and special requests.
Areas Covered:
- Assessment
- Request Initiation
- Procurement Process
- Approval Process
- Payment Process
- Monitoring and Review
Overview of the Procurement Process Below is the circular process diagram that outlines the continuous flow of the procurement process at Hosteeva:
Assessment → Request Initiation → Procurement Process → Approval Process → Payment Process → Monitoring and Review → Assessment
Detailed Process Steps
1. Assessment
- Employees identify the need for new or replacement items and report to their team leads.
- Team leads assess the necessity and urgency of the request.
- The Administrative Committee conducts monthly and quarterly mini-audits to identify additional needs and evaluate the current inventory.
2. Request Initiation
- Team leads escalate the request via email to the Administrative Committee, detailing the required items (see procurement request form).
- The Administrative Committee reviews the requests and decides on the action based on budgetary constraints and priority.
3. Procurement Process
- For purchases up to 100,000 AMD, approval may be granted by HR. Expenditures exceeding 100,000 AMD that are accounted for in the annual budget must be approved by the Operations Director or General Manager. Any expenditure not included in the budget requires approval from the Board.
- Upon Board approval, the procurement is initiated by the HR/Administrative Assistant.
- Monthly Budget for Office Expenses:
- A special budget is allocated monthly for miscellaneous office expenses, such as cups, wall decorations, etc. (20,000 AMD for the 2024 year).
- The Accountant receives a monthly budget for refreshments and common office supplies, including tea, coffee, toilet paper, water, and other usual office expenses.
4. Approval Process
- Small Purchases:
- Purchases up to 100,000 AMD can be authorized by the Administrative Committee without additional Board approval.
- Large Purchases:
- For expenditures exceeding 100,000 AMD, the Administrative Committee must compile requests and submit them to the Board of Directors for inclusion in the budget and approval.
- Special Requests Budget:
- For expenditures exceeding usual spending limits, the Administrative Committee must obtain approval from the Board of Directors.
- When processing special requests, always consider cost-effectiveness. Obtain at least three price quotes from different vendors to ensure the best quality and price.
5. Payment Process To clarify the categories of purchases:
- Small Purchases: Up to 100,000 AMD
- Large Purchases: Over 100,000 AMD, included in the budget
- Special Requests: Any expenditure not included in the budget or exceeding usual spending limits, requiring Board approval and at least three vendor quotes for cost-effectiveness
- The Accountant receives procurement details and processes the payment through online receipt transfer.
- For purchases over $100, the item must be included in the inventory list and follow the inventory policy.
- The inventory list, which documents all items, should be incorporated into the processes for small, large, and special requests.
6. Monitoring and Review
- Biannual mini-audits by the Armenian Administrative Committee to assess current inventory and identify new needs.
- Annual review by the Administrative Committee to forecast the budget for the upcoming year, escalating requests to the Board of Directors for approval starting in September.
- Continuous monitoring of procurement activities and updating inventory lists for items costing over $100 (see inventory SOP).
Administrative Committee: The Administrative Committee at Hosteeva is composed of the HR Manager, the Operations Director, and the General Manager. This committee is responsible for overseeing procurement processes, conducting audits, and ensuring compliance with budgetary guidelines and inventory policies.
Compliance:
- All procurement activities must adhere to Hosteeva’s budgetary guidelines and inventory policies.
- Regular reviews once every trimester and annual audits ensure compliance and identify areas for process improvement.
Responsibilities:
- Employees: Report needs to team leads.
- Team Leads: Assess and escalate requests to the HR admin and then to the Operations Director.
- Administrative Committee: Review and approve small purchases, compile and escalate large purchase requests to the Board, and conduct audits.
- HR/Administrative Assistant: Procure approved items.
- Accountant: Process payments, manage monthly office expense budgets, and update inventory for significant purchases.