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Allowable Expenses of University Funds

 

Rationale:  As stewards of the public trust, it is the fiduciary responsibility of every University supervisor and employee to ensure that university funds are prudently used to advance the mission of the institution and the academic needs of its students.  The University, as a tax supported institution, limits the disbursement of its resources to official University purposes.

 

Definitions:  The term “University purposes” signifies that the expenditure is essential for the furtherance of an officially authorized University program.  “Personal items” are those items which are more personal in nature, and do not further an officially authorized University program.

 

Allowable Expenses Policy:  Sound spending practices and controls are essential to maintaining the integrity of the University in the eyes of the public.  Spending practices and controls must include both employees who are charged with spending University funds, as well as those who supervise employees who spend University funds at all levels of the organization for all expenditures.  Spending practices are restricted by those listed below.

It is recognized that EMU is a very diverse University, and as such, different divisions, departments, groups have different needs to properly execute their missions.  As such, it is expected that all employees who are responsible for any University funds will spend them prudently, in the furtherance of the university mission.

 

This policy applies to all Eastern Michigan University employees.  As with all University expenses, these will be subject to audit by the University’s Internal Auditor.

 

Procedures:

Wherever possible, employees are encouraged to use the University Purchasing Card. If use of the P-Card is not possible (i.e. Vendor does not accept Credit Cards, Employee has been restricted from p-card usage, etc.) you can obtain reimbursement by completing one of the travel reimbursement forms.

2008 Employee Reimbursement/Travel Form
(for travel from 7/01/08 - 12/31/08)

 

2008 Employee Reimbursement/Travel Form
(for travel from 1/01/08 - 6/30/08)

2007 Employee Reimbursement/Travel Form

The Vice President of Business and Finance has overall responsibility for the procurement of supplies, materials and equipment.  Therefore, the Vice President of Business and Finance has the exclusive authority to make exceptions to these procedures.

 

Employee reimbursement checks will be available for distribution on the 10th and 25th of each month.  In the event the 10th or 25th of the month falls on a weekend or University Holiday, the last business day before the 10th or 25th will become the date of distribution.  Reimbursements received in Accounts Payable no less than 5 business days before the designated Employee Reimbursement date will be available on the scheduled distribution date. Those received less than 5 business days before the Employee Reimbursement date will be delayed until the following designated reimbursement date.

 

All ERT forms must be completed and signed by the employee and appropriate
Dean/Director/AVP/VP or President, whichever is applicable.

ERT must at a minimum contain all employee information, date of purchase, amount, explanation and all appropriate signatures.

 

All detailed original receipts must be attached to the completed ERT form.  Charge card receipts are not acceptable for reimbursements.  Eastern Michigan University is a tax exempt entity therefore, Michigan sales tax MAY not be reimbursed.  Please make sure you notify the vendor at time of purchase to inform them that EMU is tax exempt.  You may pick up a Blanket Certificate of Exemption in the Purchasing Dept. before you make your purchase to substantiate tax exempt status to the vendor.

 

For reimbursement related to Employee Travel, please refer to the Travel Reimbursement Procedures.

 

Limitations:

 

Alcoholic beverages
Allowed only with written “University Purpose”, SOC approved and reimbursement will be from the Foundation account.

 

Cash gifts, prizes and awards to employees
Cash gifts, prizes, and awards given to employees (including student employees) that are paid for with University funds constitute gross wages subject to federal, state and FICA taxes.  Cash gifts are identified as cash, cash equivalents, gift certificates, gift cards, or other intangible property such as vacations, lodging, tickets to theater or sporting events, stocks, bonds and other securities.

Non-cash gifts, prizes, and awards given to employees are subject to taxation unless these items of recognition qualify as one of the following:

• A ‘de minimis’ (minimal) fringe benefit.

 

NOTE:  Cash or Cash equivalent is never considered de minimis.
(Fair Market Value Guidelines: The IRS imposes a $25 limit on business gifts) ref: IRS Taxable Fringe Benefit Guide January 2007

• A length of service award, or
• A safety achievement award

 

Length of Service Award
A length of service award may qualify as a non-taxable benefit; provided:

• The employee has at least five years of service with the University.
• The employee has not received a length of service award within the past five years.
• The awards are presented as part of a meaningful ceremony.
• The cost of the awards cannot exceed $400 per year without being taxable.  The excess amount is to be reported to the Payroll Office for inclusion in the employee’s W2.

 

Safety Achievement Award
Safety achievement awards that recognize an employee’s accomplishments for maintaining or promoting defined safety standards may qualify for exclusion from taxes; provided:

• The award is limited to annually fewer than 10% of total employees,
• The award is not presented to managers, administrators, clerical and professional employees,
• The award is limited to $400 per employee per year.

 

Cash gifts, prizes and awards to non-employees
Gifts, awards, and prizes that are presented to non-employees are typically not subject to tax withholding.  The payment will be reported to the IRS on Form 1099-MISC if the aggregate amount of payments to that individual for the year exceeds $599.  A form W-9 must be filled out by the recipient and put on file with the Accounts Payable Office prior to the award.

 

All Cash Equivalent and Non Cash gifts/prizes/awards to employees or non employees must be reported to Accounts Payable on the Non Cash Notification form. This form must be accompanied by a copy of the purchase receipt regardless of method of payment.

 

Legality
University funds will be used for only those purposes that are legal in nature.

 

Personal items
Items for personal use are not appropriate use of University funds and are thus not allowable. 

 

If you have any questions please call Accounts Payable at 487-0022 or the University Purchasing Office at 487-1200.