Authority and Responsibility
Purchasing Amounts of $1,000 or More
All purchases for $1,000 or more for goods or services must be executed using an approved university Purchase Order.
- The Purchase Order must be approved and signed prior to purchasing the goods or services.
- The department originating the purchasing transaction must submit a Purchase Requisition form to the Business Office requesting the issuance of a Purchase Order. (See instructions for submitting a Purchase Requisition form here.
- The Budget Officer responsible for the account to which the purchase will be charged must approve the Purchase Requisition form.
- The Business Office will produce a Purchase Order within 24 hours of receiving an approved Purchase Requisition form.
- The Director of Accounting may sign Purchase Orders for amounts less than $10,000. The Associate Vice President for Finance or the Vice President for Fiscal Affairs may sign Purchase Orders for amounts less than $50,000. The President must sign Purchase Orders for amounts equal or exceeding $50,000.
- A budget encumbrance shall be established for the amount of the Purchase Order. The budget encumbrance shall be partially or fully liquidated upon partial or full payment of the Purchase Order amount upon receipt of the purchased goods or services.
- All purchases for $1,000 or more shall be paid with a university check or wire transfer, as determined appropriate by the Business Office. Purchases for $1,000 shall not be paid by credit card (except for travel-related purchases), Corporate Card, or Petty Cash.
Purchasing Amounts Less Than $1,000
- Purchases of goods or services for amounts less than $1,000 may be processed without a university Purchase Order. A Purchase Order may be used at the department’s or the vendor’s request.
- The department budget officer or his/her delegate may directly transact with the vendor for purchases of goods or services less than $1,000. No advance approval of the Business Office is needed.
- The department may pay for goods or services using a university Corporate Card (see procedures here), departmental petty cash (see procedures here) or University petty cash at the time of purchase. The department may also wait until receiving an invoice for the purchase and pay the invoice with a university accounts payable check (see procedures here).
Purchasing Authority Limited to Budget Availability
- A department’s spending authority is limited to the available program expense budget for the department. Budget availability is determined by reducing the department’s program expense budget by actual year-to-date program expense expenditures and outstanding encumbrances.
- Purchase Requisition forms and Check Requisition forms received by the Business Office which create or increase a negative budget availability balance will be returned to the issuing department for corrective action. The issuing department may cancel the purchase transaction or transfer budget funds into the department to eliminate the negative budget availability.
Purchasing Authority Restricted on Certain Purchases
- Since Southwestern operates a decentralized purchasing operation, departments are allowed to purchase most goods and services without additional approvals
- The purchase of computers and computer-related hardware and software require the advance approval of Information Technology Services.
- The purchase of office furniture and equipment, and all contracts for renovation and maintenance of physical plant assets, require advance approval of the Associate Vice President for Facilities.
- Capital equipment in excess of $1,000 requires approval of the Budget Committee in advance of purchase. These items are normally purchased at one time for the whole Institution at year-end through excess revenue reserves.
- Employees may obtain a Corporate Card with the approval of their Department Chairperson.
- Employees may use the Southwestern Corporate Card to purchase goods or services for amounts totaling less than $1,000. See procedures for use of the Corporate Card here.
- The following items may not be purchased with the Corporate Card: personal purchases, non-University purchases, contract services, fax machines, copiers and copier supplies, office and cellular telephones.
- A cardholder making unauthorized purchases or carelessly using the Corporate Card may be liable for the total dollar amount of such unauthorized purchases plus any administrative fees charged by JPMorganChase in connection with the misuse. Inappropriate or fraudulent use of the Corporate Card by the Cardholder will be subject to disciplinary action up to and including termination of employment.
- The Cardholder is responsible to safeguard the Corporate Card and account number to the same degree that a Cardholder safeguards his/her personal credit card information. The Cardholder shall not allow anyone to use his/her credit card or account number.
- Lost or stolen cards are to be immediately reported to the Business Office.
- Employees must submit to the Business Office original receipts for all Corporate Card transactions on a monthly basis using the Corporate Card monthly expense envelope. The envelope must include a monthly activity statement signed by the cardholder.
- The monthly billing cycle for the Corporate Card runs from about the 26th of the month through the 25th of the next month. Transactions posted to the corporate card through May 25 will be included in the current fiscal year. Purchases made from May 26 through June 30 will be deferred and charged to the subsequent fiscal year.
- Employees who transfer between University departments must notify the Business Office of their transfer so that the card’s department account number can be changed.
- Employees terminating employment with Southwestern must surrender the Corporate Card to the Business Office. The Business Office will deactivate the account and destroy the card.
Required Vendor Information
- As required by the Internal Revenue Service, IRS Form W-9, Request for Taxpayer Identification Number(s) and Certification, must be collected from all vendors prior to issuance of a university accounts payable check. (Get a copy of IRS Form W-9 here).
- A vendor subject to backup withholding will have the appropriate tax withheld from payment in accordance with IRS regulations.
Contract for Services
- All payments to vendors for performance of services must be documented by a written contract in advance of the purchase of services.
- All contracts for performance of services for the University must be approved and signed by the Vice President for Fiscal Affairs.
- The Human Resource department is responsible for determining whether payment for services represents an employee (and thus should be paid through Payroll) or independent contractor (and thus should be paid through Accounts Payable) in accordance with IRS guidelines.
- All accounts payable payments issued to independent contractors will be reported on IRS form 1099Misc at the end of the calendar year in accordance with IRS regulations.
- Unless specifically approved by Human Resources, all payments for services to university employees will be processed through Payroll and subjected to normal payroll taxation.
Southwestern University will ensure that University travel expenditures and reimbursement policies are carried out in accordance with the definition of an accountable plan given in Section 62 of the Internal Revenue Code of 1986 as amended. If necessary, periodic modification will be made to the travel policy to ensure that favorable tax treatment is obtained in accordance with the Code. The IRS requires, among other things, the collection and retention of original receipts for employee expense reimbursements
Definition of Travel
For purposes of this policy statement, travel is considered to be any trip requiring overnight stay in a hotel room or trip requiring travel via an airline. Day trips taken which do not meet this definition are subject to regular accounts payable policies and procedures but do not require the submission of a Request for Employee Business Expense form.
- Southwestern University provides for reimbursement of all reasonable business-related expenses for authorized business travel in accordance with the guidelines set forth in this policy.
- The University reimburses actual expenditures and does not use a per-diem allowance for travel expense reimbursement.
- The employee should use good business judgment in expending University funds to minimize the cost of travel to the University. Expenditures determined by the Business Office to be excessively expensive or not of a business nature will be reported to the traveler and the traveler’s supervisor for corrective action. Consistent abuse of the reasonableness provision of this policy could result in disciplinary action against the employee, up to and including termination of employment.
- Reimbursement for a business trip may be limited in total by the University in advance of the trip (e.g. faculty travel grants).
- An employee may request a travel advance up to ten (10) working days prior to departure date. A request may be submitted to Accounts Payable on a Check Request form (see procedures for completing a Check Request form here)
- Travel advances are limited to $500 per trip. Exceptions require the approval of the Director of Accounting or the Associate Vice President for Finance
- Travel advances must be returned to the University or substantiating original receipts must be provided documenting the business use of the advance within 30 days of the trip’s end date. Note: failure to comply with this requirement will result in the unsubstantiated advance being added to the employee’s taxable compensation through Payroll, and appropriate federal taxes withheld, in accordance with the IRS Accountable Plan rules.
- Employees may have only one advance outstanding at a time.
Report of Business Expenses
- Travel expenses must be substantiated on a Report of Business Expenses form within 30 days of the trip’s end date. See procedures for completing the Report of Business Expenses here.
- The Report of Business Expenses must be accompanied by original substantiating receipts for all transactions. An exception is allowed for expenditures less than $25 where the employee is not able to obtain a valid receipt.
- The Report of Business Expenses should be signed by the traveler and the budget officer for the department funding the travel expenses.
- In order to receive reimbursement for personal use of vehicle, the employee must document the beginning and ending odometer readings of the vehicle on the Report of Business Expenses form as required by the IRS.
- The IRS requires original receipts to include, at a minimum, the following information: name and address of the payee, the date of expenditure, the dollar amount, and a description of the purchase
- An original receipt should be obtained for all travel-related expenditures where possible, but shall be required for all expenditures greater than $25.
- Photocopies of receipts are acceptable if the expense was shared by another University employee who submitted the original receipt. The photocopy should state with whom the expense was shared.
- The following items are not considered valid original receipts according to the IRS: checkbook carbon copies of checks, cancelled checks (typically fails to provide sufficient information as noted above) personal credit card monthly statements, or credit card receipts (typically fails to provide sufficient information as noted above).
- Original receipts including part business and part non-business expenses should be submitted to the University. A photocopy may be retained for the employee’s personal records.
- Expenses incurred for entertainment purposes must meet the requirements for receipts listed above. In addition, the SU employee must document the name of the person(s) entertained and the business purpose of the entertainment (e.g. fund raising visit, faculty candidate dinner).
- Reimbursed expenditures which are not substantiated by acceptable original receipts within 30 days following the last day of the trip shall be added to the employee’s taxable gross income on the payroll date immediately following the end of the 30-day period.
Personal Expenses not Reimbursed
- Items of a personal nature charged to food, lodging or other receipts are not reimbursable. Examples of personal expenses include: in-room movies at hotel, laundry services, long distance telephone calls of personal nature and chewing gum.
- Employees accompanied on official business travel by family or friends should separate business and personal expenses. The University does not reimburse for personal expenses. However, travel accommodations that include family or friends at no additional cost to the University (e.g. double-occupancy room rates which are the same as single-occupancy room rates) will be reimbursed as valid business expenses. Where a marginal cost is added for a family member or friend, the marginal cost will normally be considered a personal expense and not reimbursed.
- Certain expenses may require allocation between personal and business purposes. In this case, the employee should use a systematic and rational allocation method that fairly states the business portion of the expense.
Use of Personal Vehicles
- The University will reimburse the employee for business usage of personal vehicles at 48.5 cents per mile effective January 1, 2007 for the calendar year 2007.
- When departing for business travel from the employee’s home, reimbursement for mileage should be calculated as the shorter of the distance from home to the destination or SU to the destination. For example, an employee living in Austin near the airport, departing from home directly to the airport in Austin, should claim mileage from the home to the airport and not from SU to the airport.
- The employee should use judgment in selecting the use of personal vehicle or air travel so as to minimize expenses to the University. The University may limit reimbursement for personal mileage to the cost of airline tickets where excessive mileage reimbursement is requested.
- The employee must document the beginning and ending odometer readings of the vehicle on the Report of Business Expenses form as required by the IRS.
University Pool Vehicles and Vans
- The University maintains a fleet of pool vehicles and vans for business use, subject to availability. University’s fleet vehicles effective January 1, 2007 for the calendar year 2007.
- The pool car fee is a flat $42 for a 24-hour period, or $25 for 4 hours or less, with unlimited mileage. The pool car fee is a flat $42 for a 24-hour period, or $25 for 4 hours or less, with unlimited mileage. There will be a one-hour grace period beyond the 24-hour period, at which time additional hours will be charged at $10 per hour. The fee will be charged to the driver's departmental account by physical plant. The driver will be responsible for the purchase of gasoline using their Corporate Card or using a personal credit card or cash and being reimbursed. As with all other Corporate Card (and personal card) transactions and cash reimbursements, the cost of the gasoline will be charged directly to the driver's departmental account. The car should be returned with a full tank as a courtesy to the next driver.
- The 11-passenger vans’ cost is 60 cents per mile. Gasoline credit cards will be provided with the van for use by the employee.
- Employees must meet certain vehicle safety requirements in order to drive University vehicles. See procedures for safety requirements here.
Accounts Payable Check Runs
The Director of Accounting will determine the frequency of check runs during the week, and establish cut-off dates for submitting requests for payments to be included in the check runs. Requests for payments received after the published date will be held and paid on the next check cycle. See procedures for requesting disbursement of accounts payable check using the Check Requisition form here.
Check Disbursement Authorizations
- Accounts payable checks are automatically signed at the time of printing using a digital electronic signature. The Director of Accounting is responsible for maintaining appropriate security over the digital electronic signature and blank check stock.
- Check disbursements for amounts greater than or equal to $1,000, but less than $10,000, require the authorization of one of the following: Director of Accounting, Associate Vice President for Finance, Vice President for Fiscal Affairs, President.
- Check disbursements for amounts greater than or equal to $10,000 require two authorizations from the following: Director of Accounting, Associate Vice President for Finance, Vice President for Fiscal Affairs, President
- All checks submitted for authorization shall be accompanied by the system-generated check disbursement log, grouped by amount stratification as noted above. The authorizing personnel shall ensure that all checks are accounted for.
Accounts Payable Record Retention
- Purchasing/Accounts Payable will retain the following for all check disbursements, in accordance with the University’s Record Retention Policy: Check copy, original invoice, check requisition form (if applicable), purchase order (if applicable), purchase requisition form (if applicable), Report of Business Expenses form (if applicable), and any other substantiating documentation related to the transaction.
- Copies of all contracts and warranty agreements shall be forwarded to the office of the Vice President for Fiscal Affairs.