KBA-01207: Compliance Items

Question:

How do I set up standard Compliance items?

Answer:

Compliance items are used to track various legal, documentation and business issues.  When the other party fails to comply with their obligation, compliance items act like alerts to inform you of the issue.  They can be configured to block approval of Pay Requests automatically. Some examples we have encountered:

• Auto Liability Insurance
• Executed Subcontract Agreement
• General Liability Insurance
• Material Safety Sheets (MSDS)
• Subcontractor / Supplier Disclosure
• Performance Bond
• Workers Compensation Insurance

Define your Compliance types on the Manage or System Admin Dashboards.  Each Compliance type entry can be mapped to one or more Doc types, and optionally flagged as required (automatic) for a certain Doc type and subtype.

So, for example, General Liability Insurance might be tracked on Vendor documents, while Executed Agreements and Performance Bond compliance might be tracked on Commitment (Subcontract) documents.  Perhaps Performance Bonds would only be required for a certain subtype of subcontract.

Tracking – Automatic or Manual

Compliance items can be tracked manually or automatically through provided criteria–in which case the item goes out-of-compliance as facts change.  Specifically:

• Manual Tracking
  • If the released date is set to some date that has passed, the item is deemed in compliance.
  • If the Pay Control flag is set to blocked, the item is deemed out of compliance.
• Automatic Tracking
  • Based on Required By, the item is out of compliance if:
    • the AllowProof option is on for the Compliance type and
    • the Received date has not been set (or has not yet passed) and
    • the Required by date (adjusted by lead days) has passed
  • Based on Effective date, the item is out of compliance if AllowEffective is on and the effective date entered is after the start date adjusted by lead days.
  • Based on Expiration date, the item is out of compliance if AllowExpiration is on and the expiration date entered is prior to the actual expected work completion date adjusted by lead days.
  • Based on Amount, the item is out of compliance if the compliance amount is less than the current commitment amount.

Payment Control

Payment Control takes compliance a step further and indicates if the compliance item should prevent approval of Pay Requests.  First, Payment control is enabled on a compliance type.  Each individual compliance item then has a pay control option: automatic, block or warn.

You very rarely set the option to Block as this forces the item to always act as if it were out of compliance and block approval of Pay Requests.

Warn forces the compliance item to be tracked and reported via warnings and alerts, but will never block approval of a Pay Request.

Automatic means that Pay Request approvals will be blocked when the item is out of compliance.   Commitments and  Vendor documents also carry a payment control flag that may be displayed on the document detail tab.  When this option is set to Automatic, payment control works based on the compliance item status.

If the Commitment or Vendor is set to Warn only then it is not possible for a compliance item to block approval of the Pay Request.  Again, use Block sparingly: it blocks approval of Pay Requests absolutely.

Furthermore, Compliance types that include a payment percent are treated as ‘warnings-only‘ for the purpose of payment control until the prior approved Pay Requests exceed the specified percent of the current commitment amount.

Automatic Pay Control will prevent approval of any Pay Request document if the Vendor or Commitment has any out-of-compliance issues.  When integrated with Microsoft Dynamics SL and specifically enabled in ICTool, the payment control option will also block all unpaid vouchers—even those that were approved prior to the out-of-compliance situation.

Note: More extensive information about Compliance can be found in the Focus on Alerts and Compliances guide, accessed through Spitfire‘s Help menu.

Additional Comments:

The system does not automatically generate Compliance items for Vendors unless they are a subcontractor.  You can add items manually, or make the Vendor a subcontractor then save and close.  When you reopen the Vendor document, the required Compliance items will be added.  You can then remove the subcontractor flag and any extraneous Compliance items you do not need. If the system does not allow you to choose a subtype for your Compliance type, then the selected Doc type does not have any subtypes defined.  Check the Code Maintenance tool on the System Admin Dashboard.

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KBA-01207; Last updated: May 19, 2016 at 13:48 pm;