Receiving a service PO line for amount

We are on 11i  with extended patches.

I have set up a PO line type for services with amount as the bases. I have also checked that a reciept is required. 2 things are happening I don't understand. When I enter the PO and go to approve it the PO shows a pre-approved. Where is that set up?

And then when I try to receive the PO in the receiving screens I recieve the message that no PO matches my search criteria.

Can anyone help with what else I might be missing. The supplier site is both pay and purchase. And we are using Standard PO for this.