Title: Spending Guidelines by Fund Source
UNC General Administration has a wide variety of sources of funds, each of which has its own spending characteristics. No set of guidelines can be written that addresses every possible expenditure decision which may arise. There are some basic rules, regulations, and precedents which are presented here which can help guide an employee in making wise spending decisions. These guidelines are provided to ensure that staff can carry out the agency's mission effectively, while ensuring that fiscally wise, politically sound, and legal spending practices are followed.
All Sources of Funds
Appearance and Reasonableness Tests
For all potential expenditures from all sources of funds, the “appearance test” should be used, i.e., how would this purchase look to external constituents if placed on the front page of a newspaper. Another test that is useful is to ask the question, “Is this expenditure necessary for a staff member to do his/her job or for the agency to carry on its normal business?” The utilization of these tests should help to guide staff members in their decision-making. At all times, staff are encouraged to avoid the appearance of poor management of funds as well as the reality of poor management of funds.
Exceptions and Interpretations
Every attempt has been made to make these guidelines comprehensive. There may be cases, however, which would fall outside the guidelines and yet be legal expenditures and in the best interests of the university. If a case occurs in which an individual believes an exception should be made to the guidelines, he/she should request from the Controller that an individual determination be made on a particular item. The Controller or designee, will work with the responsible division head or program manager to determine the latitude available on the request, the university business purpose of the request, and other options which may be available.
Project Custodian Responsibilities
The project custodian (individual responsible for the funds in a project) has the responsibility to ensure that proper documentation procedures are followed for projects that he/she controls and that only authorized expenditures are charged to a project. Furthermore, the project custodian is responsible for ensuring that any projects which he/she may control are reviewed at least monthly (i.e. Financial Record System, Finan$eer, or E~print) and any transactions which are incorrect or do not belong on a project are reported to the Controller’s Office. Finally, a project custodian is responsible for ensuring that he/she maintains a positive or zero cash balance on trust fund projects unless specifically exempted from this requirement in writing by the Controller (i.e. claim for reimbursement contract and grant account).
Payments to Employees
Regardless of funding source, payments to employees are limited to authorized reimbursements, or authorized salaries. Payments to employees for compensation for work must follow guidelines published by the Human Resources Division and must be initiated through the payroll system.
Personal reimbursements for items such as supplies, travel, or meals to an employee must be approved by an individual at a higher level of authority in the university’s organization. Personal reimbursements for items and supplies should be for emergencies only, not for the daily operational needs of the department and should be for less than $300. These purchases should normally be made with prior planning and through the small purchase, or requisition process. Any such approved reimbursement must be documented appropriately for the expenditure. For example, the purchase of supplies would require following purchasing guidelines.
Penalties and Charges Resulting from Cancellations of Travel Reservations
Penalties and charges resulting from the cancellation of travel reservations (including airline or hotel reservations and conference registrations) may be paid by a department if the employee’s travel has been approved in advance and the cancellation or change is made at the direction of and/or for the convenience of the department. If the cancellation or change is made for the personal benefit of the employee, it is the employee’s obligation to pay the penalties and charges. In the event of accidents, a major disaster, a serious illness or death within the employee’s immediate family, or other critical circumstances beyond the control of the employee, the department may pay the penalties and charges.
Travel Reimbursements and Expenditures
A complete set of travel reimbursement procedures may be found on UNC General Administration’s Policy and Procedures website.
Home internet connections are considered the equivalent of home telephones, i.e., personal expenses which are not reimbursable. In rare cases, a specific connection may be paid for by the university if it is required by the university and is for the convenience of the university. An example would be an internet connection needed for a research project which required a special hookup and monitoring outside of normal working hours. The simple use of a home computer and home internet service for business purposes is not considered justification for reimbursement.
Long Distance Telephone Calls
Long distance telephone calls are allowable from agency funds only for university business except in the event of an emergency or certain situations allowable during travel status.
Should emergency circumstances arise which necessitate an employee to make a personal long distance phone call not covered in the above, the employee should immediately notify his or her supervisor and make arrangements to reimburse the agency.
When authorized, moving expenses for new employees must be paid from discretionary or foundation funds. Moving expenses should be carefully documented and charged to object code 1530. Coding to object code 1530 is very important because the code drives the tax reporting for the moving expense payments.
Three vendor quotes are required for moving expenses under $5,000. Moving expenses costing over $5,000 or more must be handled on a purchase requisition or bid basis.
Expenditure Account Codes (Object Codes)
Expenditure account (object) codes are codes that must be used when processing financial transactions to identify various classes of expenditures, for example, salaries, travel, supplies, equipment, etc. The actual object codes will provide even more detailed breakdowns of the these groupings. This coding scheme gives the agency the ability to create reports that include, or are broken down by, the various classes of expenditures.
Information regarding expenditure object codes for coding expenditures may be found on UNC General Administration’s Policy and Procedures website.
Program (Purpose) Codes
Program (purpose) codes are codes that help to classify financial activity by its function, for example, instruction, institutional support, research, or public service. These codes are not needed to code a financial transaction but are built into the financial system for each project at the time the project is created. Because of the need to report financial activity by function, a project may not be classified into more than one function.
Program codes may impact the way funds can be spent. For example, expenditures for scholarships may only be made from accounts with the Student Financial Aid (230) program code. If an individual had a discretionary fund and wished to use it to fund a scholarship, a separate project would need to be created to expend from for the scholarship or the funds could be transferred to an already existing scholarship project.
Information regarding individual program (purpose) codes may be found on UNC General Administration’s Policy and Procedures website.