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During 1984 through 1989, W&H generally furnished WIB with
copies of all vendor invoices along with check requests and
payment instructions. WIB relied on W&H to tell WIB that
petitioner had approved the check requests. When WIB paid an
invoice, it promptly sent to petitioner a copy of the invoice,
the check request, and payment information. Any time that
petitioner called WIB to ask questions about an invoice, WIB
referred petitioner to W&H, because WIB did not review the
correctness or appropriateness of the invoices to petitioner.
Petitioner never asked WIB not to pay a vendor invoice. However,
on at least one occasion W&H authorized a payment without
petitioner’s approval; W&H finally agreed that it would pay that
bill.
In a memorandum dated October 15, 1985, Watson addressed and
discussed a number of matters raised during an October 8, 1985,
meeting between himself, two of petitioner’s directors, and
petitioner’s executive director. Among the matters dealt with in
the memorandum are W&H’s procedures with respect to its issuance
of purchase orders, processing of invoices, and issuance of check
requests to WIB to pay invoices. W&H’s asserted practice was to
send to petitioner copies of purchase orders for all goods or
work contracted by W&H. After completion of the work or delivery
of the goods and W&H’s receipt of an invoice from the vendor, the
W&H account executive reviewed the invoice for accuracy and
returned it to W&H’s accounting department. A check request was
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