9.10 General Expenditure Policy

Policy Information

Purpose and Summary

To provide general policies and procedures related to expenditures. The University is a public institution and has a fiduciary responsibility as stewards of public funds to ensure that disbursements are Reasonable, have a valid Business Purpose in support of the University mission, adhere to any funding restrictions such as those imposed by donors and sponsors, and are not in violation of any University, ABOR, State, or Federal policies.

Source

Misuse of University Assets Policy 
Arizona Revised Statutes, including but not limited to §35-301
Arizona State Constitution, including but not limited to, Article 9 Section 7 
Code of Federal Regulations, including but not limited to, 2 CFR 200.413
Internal Revenue Code

Scope

This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.

This policy applies to all University of Arizona funds except Agency funds. Policies for Agency funds are set by the external organization for whom the University holds the funds.

Payments to students are covered by provisions of this policy only if they are employees of the University, otherwise they are regarded as non-employees. Refer to policy 13.01 Introduction to Methods of Student Payments.

Definitions

1. Agency Funds: Resources held by the University as custodian or fiscal agent for an organization or entity (the Agency) external to the University. The University must act with reasonable care in administering the funds of others. Agency accounts do not carry a fund balance that belongs to the University. Transactions of Agency funds are not included in the revenues or expenses of the University for financial reporting purposes.
2. Allowable: Expenditures that are Reasonable, Business-Related, have adequate supporting documentation and a University Business Purpose and benefit, and are not prohibited by any policy or law, and are therefore payable from University funds. Note that not all Allowable expenditures are allowed on all funding sources.
3. Business Purpose: A statement that justifies how an expense is appropriate and Reasonable, and how it supports and/or advances the goals and objectives of the University.
4. Business-Related: Ordinary and necessary expenses incurred to conduct University of Arizona business.  These expenses are for the primary benefit of the University over the benefit of an individual.
5. Cardholder/Responsible Cardholder: The individual responsible for the PCard as identified in UAccess Financials.
6. Personal: Expenses that are for the primary benefit of an individual over the benefit of the University. Refer to Misuse of University Assets Policy for additional information.
7. Reasonable: An expenditure is considered Reasonable if:
   1. The nature of the goods or services acquired, and the amount involved reflect the actions of a prudent person under the circumstances,
   2. The expenditure is appropriate given the mission of the University, and
   3. Reimbursement for, or direct payment of, the expenditure is not otherwise disallowed by any University policy.
8. Unallowable: Expenditures that are not Reasonable or Business-Related, lack a University Business Purpose and benefit, are Personal, or are prohibited by any policy or law, and are therefore not payable or reimbursable from any University funds regardless of payment method.
9. Unauthorized Sharing:Includes allowing another person to use an Individual PCard, giving a Department PCard to an individual who did not check-out the card, or an individual other than the Cardholder/Responsible Cardholder allowing the check-out of a Department PCard.
10. Vendor:A company offering goods or services to the University or receiving reimbursement for Business-Related expenses, or a person who is not a University employee. Examples include corporations, Designated Campus Colleagues (DCCs), students, or entities such as outside entities or Independent Contractors.

Policy

1. All University expenses require a valid Business Purpose and supporting documentation. Business Purpose and supporting documentation must be included in the transaction within UAccess Financials.
2. University funds must not be used to make any donation or gift to any individual, association, or corporation.
3. The Fiscal Officer or Account Delegate is responsible for ensuring that policy and procedures are followed, and that only authorized Allowable expenditures are made from their Accounts.
4. University funds can only be used for Allowable expenditures. To be Allowable, expenditures must be:
   1. Reasonable,
   2. Business-Related,
   3. Supported with adequate documentation,
   4. Supported by a University Business Purpose and benefit,
   5. Permitted on the specific funding source (refer to Allowable Expenditure Summary by Fund Source), and
   6. Not prohibited by any University, Arizona Board of Regents (ABOR), or applicable state or federal policy or laws.
5. Unallowable expenditures include expenditures that meet any of the following conditions:
   1. Do not qualify as Reasonable.
   2. Are not Business-Related.
   3. Lack a University Business Purpose and benefit.
   4. Are Personal in nature.
   5. Are prohibited by any University, ABOR, or applicable state or federal policy or laws.
   6. Are included in the Unallowable Expenditures Table.
6. Employee reimbursements require employee certification for University Business-Related expenses. This responsibility may not be delegated as the payee must certify the goods or services:
   1. Have a University Business Purpose,
   2. Have not been paid for via other University methods,
   3. Have not previously been reimbursed,
   4. And, for goods, will become the property of the University or of the sponsor for certain sponsored projects. 
7. Lack of Business Purpose and appropriate documentation will be considered cause for disapproval of Requisitions, non-payment or non-reimbursement of expenditures, or suspension or cancellation of the PCard.
8. Personnel found responsible for consistently approving transactions that have been miscoded, are Unallowable, or do not have adequate funding to support the expenditure, will be subject to appropriate administrative action.
9. Personnel found responsible for consistently not reconciling and approving PCard transactions before the auto-approval deadlines or Unauthorized Sharing will be subject to PCard suspension or cancellation.
10. To ensure separation of duties, eDocs in UAccess Financials must not be created and approved by the same person; transactions require authorization and approval by two different individuals. Refer to Internal Controls for more information.
11. Administrative costs on Federal agreements, such as administrative salaries, postage, membership dues, and office supplies, are normally included in the Facilities and Administrative (F&A) cost rate and may be directly charged to Federal agreements only under the exceptional circumstances described in the Office of Management and Budget (OMB) Uniform Guidance, Section 200.413. The exceptional circumstances must be justified in the proposal and accepted by the Federal Sponsoring agency. Refer to the Direct and Indirect Costs of Sponsored Agreements for more information or contact Sponsored Projects Services.
12. The University will comply with requirements to obtain tax identification numbers, including Employer Identification Numbers (EINs) and Social Security Numbers (SSNs), for reporting of payments to the applicable federal and state government agencies.
13. Departments are financially responsible for any fines, fees or taxes associated with inappropriate transactions.

Procedures

1. Refer to 9.01 Determining Purchasing Method to determine the appropriate purchasing method.
2. Refer to Allowable Expenditure Summary by Fund Source to determine allowable fund types for specific categories of expenditures.
3. Refer to Unallowable Expenditures Table to determine expenditures that are not permitted.
4. For instructions on documenting Business Purpose in UAccess Financials, refer to the Business Purpose Guide.
5. Refer to 9.12 Independent Contractor Services and 9.11 Employee Recognition for additional policy details specific to expenditures for Independent Contractors and Employee Recognition.
6. Refer to 9.16 Payments to Nonresident Aliens before payment is made to or on behalf of a nonresident alien as some visa types do not allow payments. For additional details on specific situations please contact Tax Services.

Reimbursements

7. To reduce the need for obtaining reimbursements, consider direct payments to Vendors utilizing the PCard, when appropriate, Single Use Account Card Program, or other Vendor payment methods.
8. Employees may be reimbursed for Allowable expenses incurred out of pocket. Requests for reimbursement should be submitted within 10 working days of incurring the expense. Refer to Employee Reimbursements for additional information and instructions for processing reimbursements.
9. Payments for services may be considered tax reportable. Therefore, employees cannot pay independent contractors with personal funds and then request reimbursement.
10. Refer to Independent Contractor and 9.12 Independent Contractor Services for additional information and instructions for reimbursing Business-Related expenses.
11. Reimbursements will only be made for expenses incurred. The value of rewards or benefits redeemed towards a purchase are non-reimbursable.

Requisitions

12. A Requisition is used for initiating a Purchase Order for the purchase of goods or services before the purchase is made or the services are performed. Refer to 9.01 Determining Purchasing Method to determine when Requisitions are required and to Purchasing Policies Manual 2.2 Purchase Requisition and the Purchase Order Payments training for additional information on the Requisition, Purchase Order, and payment process.

Frequently Asked Questions

1. What is considered an Unallowable gift/donation expense?
   An example of an Unallowable gift is one that results in personal gain to an individual without benefitting the University and furthering the University’s mission. Charitable contributions and donations to any individual, association, or corporation are Unallowable. Refer to the Unallowable Expenditures Table for more information.
    
2. Are team building expenses Allowable?
   Expenses for morale-building team activities are allowed only when they are included as part of Employee Recognition and meet all requirements for Allowable expenditures. Refer to FSM 9.11 Employee Recognition for more information.
    
3. How are Federal Express Invoices paid?
   Federal Express will electronically invoice the University of Arizona for domestic and international shipments instead of mailing paper invoices to the departments. International freight charges and merchandise sales are billed via paper invoices. For more information see the FedEx Guides.
    
4. Can we use electronic signatures on required forms?
   Appropriate use of electronic signatures can be found in the Use of Electronic Signatures.
    
5. Can Amazon Prime memberships be reimbursed?
   Departments will no longer need an individual Prime account if they choose to use Arizona BuyWays for their ordering. However, departments may still choose to order through and pay for their Amazon accounts. Departmental Amazon membership dues must be Reasonable, Business-Related, supported by a Business Purpose and benefit, permitted on the specific funding source, and have adequate supporting documentation.
    
6. How can I pay Students in UAccess?
   The reason for paying a student will determine the appropriate payment procedure. Refer to 13.01 Introduction to Methods of Student Payments.
    
7. What is considered misuse of University funds?
   Refer to the Misuse of University Assets Policy.
    
8. When do I use a Requisition versus a Disbursement Voucher?
   Refer to 9.01 Determining Purchasing Method.
    
9. How do I process an Operational Advance?
   Refer to policy 9.15 Operational Advances.
    
10. How do we determine if an expense is Reasonable?
    Refer to the Reasonable Expense Guide.
     
11. What is required to process a payment on an Account in the Agency fund?
    Funds are to be spent as directed by the external organization’s policies and guidelines. To process a payment on Agency funds, supporting documentation must be attached and appropriate approvals obtained on the eDoc. 

Related Information

Account Roles
Allowable Expenditure Summary by Fund Source 
Arizona Revised Statutes 
Business Purpose Guide
Catering & Alcohol Service 
Code of Federal Regulations
Convocation and Award Events – Best Practices 
Direct and Indirect Costs of Sponsored Agreements 
Employee Reimbursements 
FedEx Guides 
Internal Controls 
Internal Revenue Code 
Misuse of University Assets Policy
FSM 9.01 Determining Purchasing Method
FSM 9.11 Employee Recognition
FSM 9.12 Independent Contractor Services 
FSM 9.13 Business Meals
FSM 9.16 Payments to Nonresident Aliens 
FSM 9.21 Apparel
FSM 13.01 Introduction to Methods of Student Payments 
PUR 2.2 Purchase Requisition
Purchase Order Payments
Reasonable Expense Guide
Single Use Account Card Program 
Sponsored Projects Services 
Unallowable Expenditures Table

* Please note that sections titled Frequently Asked Questions and Related Information are provided solely for the convenience of users and are not part of the official University policy.