9.10 Requisitions/Reimbursements

NOTE: 9.10 has been updated to reflect procedural changes resulting from the implementation of UAccess Financials. There are no changes to policy. This section is currently in review and additional revisions may be necessary.

Section Contents

General Guidelines and Definitions

1. Application: These guidelines apply to all University of Arizona funds except agency funds. Agency funds are funds for which the University acts as a fiduciary custodian of the funds but has no responsibility for deciding policy on use, for example, UPH. Policies for agency funds are set by the party for whom the University holds the funds.

2. Allowable Expenditures: Reasonable and business-related expenditures, as defined below, are allowable. Some expenditures are only allowable from certain funding sources; refer to Table 1.

   NOTE: Some expenses appear to be personal, for example, flowers or clothing. Other expenses appear to be nonbusiness related, for example, firearms or gasoline for vehicles used in town. Expenses that appear to be personal or nonbusiness related must be supported by a written explanation of why and how they are reasonable and business related.

   1. 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 purpose of the University, and 3) reimbursement for or direct payment of the expenditure is not otherwise disallowed by any University policy.

   2. Business-Related: Ordinary and necessary expenses incurred to conduct University of Arizona business.
      
      
   3. Time Limitation: The University is permitted to reimburse employees for business related expenses as a qualified tax-free payment under the “Accountable Plan” rules defined by the Internal Revenue Service (IRS) (Treas. Reg. §1.62-2). Those rules limit the qualified reimbursement to 60 days after the expense is paid or incurred. After the 60 days, the reimbursement becomes unqualified and taxable. Unqualified reimbursements will be paid through the Accounts Payable system and reflected in the employee’s wages through UAccess payroll system.

3. Employee Recognition: The University sponsors a number of formal recognition programs for University employees.  Examples include the Employee Recognition Week and Awards for Excellence.  These programs are meant to focus on specific achievements and activities or acknowledge significant accomplishments, such as length of service.  In addition, the University encourages colleges and departments to recognize their employees for contributions to the University in a less formal manner.  Departments offering taxable awards will assume responsibility for ensuring accurate income tax reporting to their employees and will assume the risk of fines and penalties for any failure to report taxable income that is identified in an audit.

   NOTE: If compensatory employee recognition awards are to be a part of the employee recognition program, a Recognition Award Compensation Form  must be completed and reviewed for compliance by FSO-Payroll, because the awards are considered taxable. The program should be in compliance with Human Resources, Financial and Tax policies regarding recognition. In addition, the following conditions must be met:

   1. The costs of each recognition event do not exceed a "reasonableness" level (defined as no more than $15 per person per event to cover the cost of refreshments or a modest meal, minimal decorations, mementos etc.). If this amount is exceeded, a letter of justification approved by the Vice President of the area will be required.
   2. The event is held preceding, during, or immediately following normal business hours.
   3. The recognition events must be non-discriminatory and held for the benefit of all eligible departmental employees (may have separate events for different categories of employees, e.g., faculty, staff).

Employee Recognition Awards

Additional Restrictions

·         Cannot use state or sponsored project funds

4. Retiree Farewells: Expenditures for retiree farewells are allowable if the retiree has been continuously employed at the University of Arizona for a period of no less than 10 years. Additionally, the following conditions must be met:
   1. The costs of each retiree farewell event do not exceed a "reasonableness" level (defined as no more than a total of $15 per person per event to cover the cost of refreshments or a modest meal, minimal decorations, mementos etc.). If this amount is exceeded, a letter of justification approved by the Vice President of the area will be required.

   2. The event is held preceding, during, or immediately following normal business hours.

5. Business Meeting Expense vs. Business Entertainment: A distinction must be made between Business Meeting Expense and Business Entertainment because Business Meeting Expense may include the bid process.
   1. Business Meeting Expense (for groups): The primary purpose is to conduct business or disseminate information. Business meetings require advance planning, involve groups of people and have considerable cost. Examples include luncheons and dinners for groups, banquets, conferences, workshops, retreats and seminars.

      These events must be preceded by a Requisition to a vendor far enough in advance to allow for the bid process when applicable. Business meetings may include elements of morale-building activities meant to reward or celebrate successes or to publicly recognize employees for good performance. These take on more of an informal-type employee recognition nature, and might include expenses incurred for incidental (small dollar) tokens given to motivate, inspire or express appreciation.

      Code Business Meeting expense to object code 5170. Business Meetings are not allowed on State accounts and have restricted usage on Sponsored and Local Accounts (refer to Table 1 for details).

      NOTE: When events on main campus are planned that include food, and the total cost exceeds $500.00, departments and organizations must contact the Student Union Dining Services to make food service arrangements. AHSC departments have the option of using the UMC food service. Refer to the Catering Policy for details.

   2. Business Entertainment (for a few individuals): The primary purpose of Business Entertainment is to further business relations. Business Entertainment is smaller in scale, includes a small number of people and is fairly low cost. Examples include business lunches or dinners, tickets to athletic, cultural or other events.

      Process reimbursements to University employees with a Disbursement Voucher; payments to vendors should be requested in advance with a Requisition.

      Code Business Entertainment to object code 5550. Business Entertainment is allowed only on Local Accounts (refer to Table 1 for details).

6. Unallowable Expenditures: Some examples of unallowable expenditures, which are not payable from any University funds, are:
   1. Expenditures for employee social or recreational functions - where no business is conducted nor business objectives are present (for example, non-approved individual retirement farewells or employee recognition programs, picnics, or memorial services; Christmas or other holiday related parties and employee functions).

   2. Gifts of any type for personal life events or for holidays (for example, for condolence, congratulations, birthdays).

   3. Dues for membership in community service organizations (for example, Kiwanis, Rotary).

   4. Charitable contributions or donations.

   5. University parking fees and permits for faculty, staff or administrators personal use.

   6. Fines and penalties (for example, parking fines and returned check charges).

   7. Personal expenses (for example, passports and related expenses, personal phone calls, personal use of photocopy machines, supplies for home or personal use, such as, briefcases).

   8. Alcohol.

7. Administrative Costs on Federal Agreements: Administrative salaries, postage, membership dues, and office supplies are normally included in the indirect cost rate and may be directly charged to Federal agreements only under the exceptional circumstances described in OMB Circular A-21, Section F.6.b. The exceptional circumstances must be justified in the proposal and accepted by the Federal Sponsoring agency. Call your Sponsored Projects fund accountant for rebudgeting after the fact.

8. Social Security Number: The University is required to obtain the social security number for reporting of payments to all individuals, including subject pay, independent contractors, lecturers, speakers and employee reimbursements to the Federal and State Governments and for verification of the payee's identity. This disclosure is mandated by the Federal Privacy Act of 1974, by Sections 6011 and 6051 of Subtitle F of the Internal Revenue Code and by Regulation 4, Section 404.1256, Code F of Federal Regulations, under Section 218, Title II of the Social Security Act, as amended.

9. Termination Date: All requisitions for sponsored project grant and contract accounts must include the termination date. Requisitions that cannot be fulfilled before the termination date must not be approved by the responsible person or fund accountant and must not be honored by the servicing unit (Purchasing, Stores, IB unit).

10. Random Review: Requisitions not reviewed by fund accountants are subject to random audit. Departmental representatives found responsible for consistently approving transactions that have been miscoded, are unallowable, or do not have adequate funding to support the expenditure, may be required to submit all requisitions for fund accountant approval and/or considered for other appropriate administrative action. Departments are responsible for financing all unfunded or inappropriate transactions.

11. Purchasing Card: The University of Arizona Purchasing Card Program has been designed and implemented to allow for direct small dollar purchases (less than $5,000). The intent is to eliminate, as much as possible, the need for small dollar purchase orders and direct reimbursements. All transactions made using the UA Purchasing Card must benefit and support the University's mission of education, research, and public service.

    An overview, criteria for departmental participation and instructions for getting started are available at http://pacs.arizona.edu/Purchasing_Card

12. Federal Express Invoices: Federal Express will electronically invoice the University of Arizona for domestic and international shipments instead of mailing paper invoices to the departments.

13. Dual Signature Authority: To ensure good internal control, transactions should be authorized and approved. Ideally, the authorizer and the approver are two different people, however, if the Responsible Person/Principal Investigator delegates their authorization to an approver, the authorizer and the approver could be the same person.
    
    The concept of authorization and approval can be as informal as someone asking for something or OKing what someone else has asked for (authorization) and someone signing off (approval).

Grants and Contracts - the Principal Investigator is the authorizer and someone in the department (usually the business office) is the approver.

State, Designated, and Auxiliaries - Responsible Person is the authorizer and someone in the department (usually the business office) is the approver.

Central administration will continue to look for one signature - an approver. The approver signature is signifying that the transaction has been authorized by the Principal Investigator (grants and contracts) or a Responsible Person (all other accounts) or their delegate. The approver is also attesting that the transaction is allowable by policy and that funds are available.

If your College requires that documents are forwarded to the College Business Office for review and approval, this policy does not impact those requirements. Additionally, this policy does not alter the requirement that employee reimbursements are approved by the employee's supervisor.

14. Conferences: If a conference is held at University facilities and is supported by expenditures from University accounts, the proceeds must be deposited with the University. If the conference sponsors intend for the proceeds to be deposited with the University of Arizona Foundation, the conference may not be held using University facilities and University money may not be used to support the conference without payment or reimbursement from the Foundation. Such arrangements must be approved in advance by the appropriate University vice president or dean of the college.
    
    It is very important to keep Foundation money separate from University money and to deposit receipts with the appropriate institution. When University money is used, follow University policies and procedures. When Foundation money is used, follow Foundation policies and procedures.

Additional Guidelines for Expense Reimbursements

1. Timeliness: Requests for reimbursement should be submitted within 10 working days of incurring expense.

2. Employee Reimbursements - Signature Requirement: For reimbursement of business-related expenses, the original signature of the employee is required on the Employee Reimbursement Request. This responsibility cannot be delegated. See Table 4, Employee Expense Reimbursements.

3. Students: Students are covered by provisions of this policy if they are employees of the University; if they are not so employed, they are regarded as "nonemployees" under this policy.

4. Establishing a College or Equivalent Reimbursement Fund: A college or equivalent may be authorized to establish and monitor a Reimbursement Fund for the purpose of making disbursements in accordance with this procedure. Requests to establish a Reimbursement Fund should be directed to the Associate/Assistant Comptroller - Financial Management. The custodian of the Reimbursement Fund will be required to follow policies designated and must assume responsibility for any illegal utilization of University funds. These responsibilities cannot be delegated. The Reimbursement Fund will be subject to a periodic audit conducted by the Financial Services Office - Financial Management.

   Exceptions

5. Special circumstances may allow for some of these guidelines to be altered on occasion, on a case by case basis. This determination must be initiated at the departmental level, reviewed by the appropriate dean or director, and approved by the appropriate vice president.

Table 1 - Allowable Expenditure Summary

Table 2 - Requisition/Reimbursement/Purchasing Card Procedures

Alternatives to Out-of-Pocket Expenses

1. Employees may be reimbursed for business related expenses incurred out of pocket. To reduce the need for obtaining reimbursements consider using these methods for expenditures:
   1. Stores - no dollar limit
   2. Stores approved vendors - up to $5,000 per day per account
   3. Purchasing Card - The UA Purchasing Card is available for direct small dollar purchases (less than $5,000). An overview , criteria for departmental participation and instructions for getting started are available at http://www.pacs.arizona.edu/Purchasing_Card

   Employee Reimbursement Guidelines

2. Employee reimbursements are processed through the Accounts Payable System.
3. Operational advances and/or settlements, revolving operational advances, subject payments, participant's fees, royalties, moving expenses and replenishment of college or equivalent reimbursement or petty cash funds will be sent via ACH Direct Deposit to the employee's 'primary' bank information listed in UAccess. If the employee does not have a primary bank assigned in UAccess, the employee will be paid on an Accounts Payable check which will be mailed to the employee's home address. Direct Deposit of Accounts Payable/Travel reimbursements are completed on Tuesday and Friday evenings.
4. Request employee travel expense reimbursements with a Travel Expense Report and forward it along with the UAccess DV cover sheet to the FSO-Operations .

   Employee Reimbursement Procedures

5. Prepare an Employee Reimbursement Request Form
6. Print the disbursement voucher coversheet and send it with supporting documentation including any original itemized receipts as required in Table 2, note 3 to FSO, Operations..