University Business Policies and Procedures Manual

4000
ALLOWABLE AND UNALLOWABLE EXPENDITURES
Effective Date: November 1, 1991
Revised:03/05/92, 12/06/93, 07/01/94, 10/26/94, 05/19/95, 10/15/95, 03/21/97, 05/08/98, 10/16/98, 12/08/99, 08/01/06
Subject to Change Without Notice

1. General

The following purchasing policies and procedures are established in accordance with The University of New Mexico Board of Regents' Policy Manual. These policies and procedures define allowable and unallowable University expenditures. These criteria apply to both the procurement of supplies, materials, equipment, and contractual services and to the reimbursement of employees for business related expenses. Compliance with these purchasing policies and procedures is expected to be accomplished within the context of general fiscal accountability. This policy is intended to establish maximum reimbursement levels. Colleges and departments may establish reasonable reimbursement policies that define lower limits. In all cases, managers are urged to use good judgment when incurring expenses. All managers of University funds shall ensure that any obligation for procurement of goods and services is supported by appropriate financial resources and approved by the person in the department who has authority over the account.

2. Scope of University Funds

It is the general policy of the University that all financial resources received by the University, irrespective of their sources, shall be expended under common policy and procedures. All funds made available to the University shall be expended through University accounting systems and in accordance with University Business Policies and Procedures. This includes funds obtained through the appropriation of tax revenues, gifts from individual donors, income earned for services rendered such as research and public service, or through transfers from affiliated organizations such as foundations. University employees may not directly control, expend funds, or be reimbursed from affiliated organization accounts for University business unless the funds are transferred to an appropriate University account. All funds must be deposited in a University account; no other bank accounts may be set up except those established by the University Associate Vice President for Financial Services with the approval of the Executive Vice President for Administration.

3. Procurement Flexibility

These purchasing policies and procedures provide flexibility to managers to enable them to perform their duties and to achieve the maximum benefit from the resources for which each manager is responsible. These policies and procedures are in place to ensure compliance with all state procurement laws and federal laws where applicable, and to ensure adequate accountability. As a publicly supported entity, it is recognized that certain guidelines must be established and followed to ensure accountability. Departments are responsible for providing documentation (such as receipts, invoices, and receiving reports) for all expenditures.

4. Unallowable Expenditures

For policies and procedures on allowable and unallowable expenditures for:

• travel, refer to "Travel Reimbursement Policies & Procedures" Policy 4030, UBP;
• recruitment and hiring of new employees, refer to "Employee Recruitment Expense Reimbursement" Policy 4040, UBP;
• payment of relocation expenses for new employees, refer to "Moving Expenses" Policy 4020, UBP; and
• federally funded contracts and grants, refer to "Accounting for Federally-Defined Allowable and Unallowable Costs" Policy 2410. UBP.

In addition, University funds may not be used for the following types of expenditures.

4.1. Fines and other penalties incurred by an employee in violation of public policy, including parking and traffic fines or failing to enforce a public policy may not be paid with University funds.

4.2. Expenditures of any type for personal benefit, other than salary and benefits to which employees are entitled under the University's personnel and faculty policies, are prohibited. If such expenditures should occur, the employee shall immediately reimburse the University in full for all such expenditures. Incidental personal use of University property, such as fax machines, copy machines, or cellular phones, etc. is allowed, however, the employee must reimburse the University in a timely manner.

Discounts which are not offered equally to all University employees are prohibited. Allowable discounts greater than 20 percent are taxable income and subject to withholding. 

4.3. University funds may not be used to pay for the maintenance and upkeep of privately owned vehicles, such as insurance, fuel, tune-ups, lubricants, tires, licenses, and other repairs, even though these vehicles may be used for University business. The employee may, however, be eligible for mileage allowance reimbursement under the University's travel policy ("Travel Reimbursement Policies & Procedures" Policy 4030, UBP).

4.4. Payments for memberships in community and business organizations are allowed only when the University employee serves as an official representative of the University. Memberships and dues to professional organizations are allowable expenditures only when they benefit the University and are approved by the academic dean or director having budgetary authority over the funds to be expended.

4.5. The purchase of personal gifts, including but not limited to flowers and other gifts expressing sympathy, bereavement, or congratulations to faculty, staff, and students is prohibited, unless approved by other University published policy (for example, employee service awards).

4.6. University funds may not be used to purchase holiday decorations for University offices and buildings.

4.7. Political and charitable contributions to individuals or organizations are prohibited.

4.8. The purchase of office refreshments (including coffee makers, food and beverages) is prohibited, except when the refreshments are to be consumed primarily by guests of the University or at business meetings.

4.9. No advances or loans to employees may be made, unless approved by other University published policy such as the University's travel policy or any deferred payment program specifically approved by the Board of Regents.

4.10. University funds may not be used to reimburse individuals for personal items stolen from University buildings.

4.11. Contracts with firms, including sole proprietorships, in which current University employees have a direct or indirect financial interest (other than as owner of less than one percent [1%] of the stock of a publicly traded corporation) are prohibited. The Personnel policy pertaining to employment of relatives will also apply to contracts with independent contractors.

4.12. Contracts with firms, including sole proprietorships, in which individuals who were University employees within the preceding twelve (12) months have a significant financial interest are prohibited unless:

• the contract did not result from an official act of the individual while an employee, as determined by the Executive Vice President for Administration, and
  
• the contract was granted under competitive bid and the bid did not take advantage of knowledge gained as an employee.

4.13. Entertainment of University employees (for example, meal expenses), other than pursuant to the University's travel policy, is prohibited. Exemptions are allowed when the function is a hospitality event that includes both University employees and invited guests of the University.

In accordance with Internal Revenue Service (IRS) regulations, all requests for reimbursement of hospitality expenditures or requests for payment of invoices must be accompanied by a list of the individuals attending the function. For functions attended by more than twenty (20) people or open to the public, a description of the function and definition of the guests invited is sufficient.

4.14. University funds may not be used to pay for tuition for university credit courses, books, school supplies, or other university fees, unless authorized by UNM Personnel Policies (tuition remission program) or other University published policy (for example, teaching, research, and graduate assistantships).

4.15. The purchase of alcoholic beverages is prohibited except when incurred in the performance of University business such as a hospitality event for guests of the University. When alcoholic beverages are served on campus, the function must be approved, in advance in writing by the President. Payment or reimbursement for the purchase of alcoholic beverages shall not be made from Instruction & General appropriated funds or Contract and Grant funds. When alcoholic beverages are served on campus, University restrictions on location and student participation must be complied with.

4.16. Payment for goods or services not received is prohibited. For procedures on prepayments refer to "Receiving and Paying for Off Campus Purchases" Policy 4370, Section 3.3., UBP.

4.17. The purchase of work clothes or the cleaning, alteration, or repair of personal clothing is prohibited, unless the expenses are necessary for the performance of the job and are required by the University or the expenses are authorized in the Union Contract.

4.18. The purchase of insurance coverage which replicates University insurance (for example, risk management coverage of University equipment) is prohibited.

4.19. Payment for any other good or service that does not represent a public purpose benefiting the University is prohibited.

4.20. The cost of transporting an impaired employee to their home is allowed only if all other options outlined in Section C-5 of the "UNM Protocol for Managing Suspected Employee Impairment at Work" fail. This protocol may be obtained from the Campus Office of Substance Abuse Prevention (COSAP).

5. Exceptions

Any exceptions to this policy which are not otherwise provided for must be approved, in advance, in writing by the Executive Vice President for Administration.

Comments may be sent to UBPPM@UNM.edu
http://www.unm.edu/~ubppm