JMU - 4205 - Expenditures

Section Name: Expenditures

Section Number: 4205

Effective Date: August 1, 2008

.100 General
.200 Control Responsibilities: .210 Finance Office; .220 Departments/Offices
.300 Different Types of Expenditures: .310 Routine Expenditures; .320 Expenditures that are Improper Charges to Public Funds; .321 Examples of Improper Public Funds Expenditures; .330 Advance Payments; .331 Allowable Advance Payments; .332 Advance Payments for Written Contracts, Leases, or Agreements; .340 Services Provided by Individuals Not Employed by James Madison University; .350 Cellular Telephone Expenditures; .360 Agency Transaction Voucher (ATV); .370 Gift Cards; .380 International Wires; .390 Incentives; .391 Non-monetary Recognition Awards
.400 Receiving Reports: .410 General; .420 Inspection, Acceptance, and Rejection of Goods or Services; .430 Lost or Damaged Shipments; .440 Rejection of Goods
.500 Processing Procedures: .510 Department; .520 Accounts Payable; .530 Finance Support
.600 Forms Preparation and Submission: .610 Accounting Voucher; .611 Required; .612 Where to Obtain Blank Forms; .613 Number of Copies; .614 Where to Send Completed Forms; .615 Forms Preparation Instructions; .620 Receiving Report; .621 Required; .622 Where to Obtain Forms; .623 Number of Copies; .624 Where to Send completed Forms; .625 Form Preparation Instructions

.100 General

This section provides detailed guidelines to all activities of the University for payment of vendor invoices. It includes payments for materials, supplies, equipment, and services purchased from vendors or individuals regardless of the procurement method. This section does not apply to Payroll, Travel Reimbursements and Moving and Relocation expenditures.

All expenditures from University funds must be necessary, reasonable, and directly related to the goals and mission of the University. All persons authorizing expenditures should be mindful that such expenditures might be subjected to scrutiny by State authorities, sponsors, auditors, and other interested parties. To ensure prompt payment, departments and activities should appropriately explain and document all expenditures.

Departments must follow procurement guidelines to obtain goods and services. Refer to the Office of Procurement Web Page for general procurement requirements.

NOTE: An individual's failure to adhere to these procedures may result in the individual being held liable for any unauthorized expenditure made.

Proper approvals are necessary to assure all expenditure transactions are authorized and to assist in timely processing of documents. A person must be authorized to sign accounting documents. Departments may obtain signatory authority for individuals by completing a Signature Authorization form and submitting it to the Office of Finance.

University policies and procedures related to expenditures may be based on State or Federal rules or guidelines by the University administration in fulfillment of its responsibility for the prudent management of all resources.

The general policy of the University is to apply the Commonwealth's expenditure guidelines and limitations to all transactions irrespective of fund source. The Assistant Vice President for Finance has ultimate responsibility for expenditure transaction processing and may on occasion; seek additional approvals of the Senior Vice President for Administration and Finance and the President.

.200 Control Responsibilities

.210 Finance Office

Assure the propriety of vendor payments in accordance with commonwealth and University regulations.
Certify and process vendor invoices for payment within five workdays after receipt of vendor invoice, and proper documentation, including receiving report.
Researches problems that produce late payments and effects appropriate corrective action.
Maintains records to assure that funds are available in the department budget to cover expenditures.

.220 Departments/Offices

Maintains departmental records of budgetary actions, expenditure commitments, and expenditures to assure funds are available in the departmental budget before starting any procurement action.
Initiates proper procurement actions to obtain goods and services for the department.
Inspects and accepts goods or services purchased to ensure that the items received meet the standards and quantities specified in the order.
Ensures that the individual receiving and signing for materials is someone other than the person authorizing the purchase.
Forwards immediately, to the Accounts Payable Office all Original invoices (when received by the department), prepayment documentation, subscription renewal type transactions, and any other payment related documentation. NOTE: Attach the vendor invoice to an 8 1/2 x 11 size blank sheet of paper if the cash register slips or other vendor invoices are not standard letter size.

.300 Different Types of Expenditures

.310 Routine Expenditures

Routine expenditures are for purchases that occur on a daily routine basis, and support the operations of the University. Payments are initiated upon receipt of a vendor invoice and proper supporting documentation. Routine expenditures include purchases for office supplies and equipment, housekeeping supplies and materials, repair and maintenance materials, and printing services.

When making purchases, departments should instruct all vendors to send invoices to the Office of Accounts Payable, unless the department is a JMU designated satellite area. Currently, the Office of Finance has approved the following satellite areas: Library, Facilities Management, Facilities Planning and Construction, and WMRA. If a non-satellite department receives an invoice from a vendor, in error, they should immediately forward it to the Office of Accounts Payable.

.320 Expenditures that are Improper Charges to Public Funds

Each department is responsible for determining its needs and for obtaining goods and services in accordance with the Virginia Public Procurement Act and procedures established by the Office of Procurement Services. The expenditure must be in support of the mission of the department.

.321 Examples of Improper Public Funds Expenditures

The following lists contain examples of expenditures that are considered improper uses of public funds. These lists are intended to provide general guidance to departments in judging the appropriate use of public funds. However, any expenditure may be questioned, even those not included on the following lists.

Employee personal expenses such as:

Books for classes (unless they remain property of the University)
Snacks or refreshments
Baby sitting
Non-business related newspapers or magazine subscriptions
Personal articles that are lost or stolen
Tuxedos or other formal wear
Clothing (non-uniform or repairs to clothing damaged in the work place)
Refrigerators, coffee makers, and other appliances for employee use
University-sponsored event expenses incurred which do not clearly support the University mission such as:

Retirement parties or employee going away parties
Entertainment expenses
Holiday decorations
Alcoholic beverages
Charitable contributions
Gifts and flowers

COSTCO memberships for personal use if obtained in conjunction with the JMU department cardholder's membership, at a reduced rate. This is a conflict of interest.

.330 Advance Payments

Advance payments are defined as payments that are made before receipt of goods or services. After the department makes an advance payment, there is no absolute guarantee that the vendor will deliver the goods or perform the requested services, placing the University's assets at risk. Therefore, when considering making an advance payment, a department must conform to the following procedures.

A completed W–9 form must be on file before a payment is processed. Contact System Support @ 568-2941 to determine if the W–9 is on file. Departments must adhere to all receiving report requirements. Standard policy prohibits the approval of an invoice for payment without first obtaining an approved receiving report. For departmental purchases up to $4,999, only a vendor invoice will be needed to process a payment to a vendor. However, advance payments are allowed for expenditures normally prepaid as a standard practice or where such prepayments are considered cost beneficial. All prepayments must have an itemized original invoice and a copy of an order form, a registration form, or some other documentation to send to the vendor with the check. Documentation should be forwarded to the Office of Accounts Payable for review and to substantiate the decision to make advance payments. The following describes those payments, which under certain terms and conditions, may be prepaid. These lists are not all inclusive.

.331 Allowable Advance Payments

Allowable miscellaneous advance payments are subject to a maximum prepayment period of 90 days.

Organization Memberships: Includes employee or agency annual membership dues for professional organizations.
Publication Subscriptions: Includes initial and renewal annual subscriptions for technical and professional publications.
Convention and Educational Services: Limited to advance registration fees for convention, conferences, seminars, and employee workshops. Departments must be reasonably sure that travel will occur as planned. Excludes other travel expenditures except for public carriers.
Travel Public Carriers: Limited to prepayments for individual travel by aircraft (if other than JMU travel contracts), train and bus. Excludes rental vehicle expenditures.
Mail Order Purchases: Limited to mail order purchases where payments must be included with the order.
Human Subject Payments: Includes expenses for advance payments to individuals (human subjects) for experimental research, engineering projects, and medical projects.
U. S. Postal Service Purchases: Limited to postage purchased from the U. S. Postal Service. Excludes courier service and freight expenditures.
Hotel/Motel Deposits: Limited to one night deposit for direct bill payments on hotel/motel rooms for employees who travel on behalf of the University. Use of MasterCard travel card is encouraged to secure room confirmations. Actual advance payments using the travel charge card will not be reimbursed before the trip.
Film Acquisitions or Rentals: Limited to payments for the acquisition or rental of educational training and development films.
Advertising Expenses: Limited to prepayments for newspaper, magazine, journal, and periodical advertisements.

.332 Advance Payments for Written Contracts, Leases, or Agreements

Allowable advance payments pursuant to written contracts, leases, or agreements are subject to a maximum prepayment period of one year, where delivery, performance, or refund is assured based on written obligations. Vendors should be encouraged to invoice the agency on a monthly or quarterly basis in the absence of a sufficiently reduced annual pricing arrangement.

Legal Services: Includes fees to retain outside legal counsel for the University. The University must have written approval from the Attorney's General's Office BEFORE obtaining any legal services.
Media Services: Limited to payments for radio and television advertising. May also include expenses paid to advertising firms for these services.
Specialized Pharmaceutical Supplies and Rare Medical Drugs: Limited to payments for specialized manufactured pharmaceutical supplies and rare medical drugs. Excludes the purchase of ordinary supplies and drugs.
Mechanical, Electrical, and Equipment Repair and Maintenance Contracts: Limited to payments for services provided to repair and maintain mechanical and electrical systems and equipment. Excludes material and equipment purchases.
Computer Hardware and Software Maintenance Contracts: Limited to payments for services provided to repair and maintain computer hardware and software. Excludes computer hardware and software purchases.
Licensing Agreements: Limited to payments for the licensing fees associated with the use of computer software.
Specialized Equipment Purchases: Limited to payments for the purchase of specialized custom manufactured equipment. Excludes ordinary equipment purchases.
Real Property & Equipment Rentals: Limited to payments for the use of buildings, land, and equipment.
Insurance Premiums: Limited to premiums for insurance contracts.

.340 Services Provided by Individuals Not Employed by James Madison University

Occasionally the University finds it appropriate to use the services of individuals who are not university employees. A completed W–9 form must be on file before a payment is processed. Contact System Support @ 568–2941 to determined if the W–9 form is on file. These services include, but are not limited to, the following:

Consulting fees
Honoraria ("payments to professional persons for services for which fees are not legally or traditionally required")
Artistic performance
Human subjects ("payments to individuals participating in research activities")
Game referee or official
Physicians or medical centers
The Internal Revenue Service requires the University to track these payments for each calendar year. When a payment to one individual reaches $600 for a calendar year, the University must report the payment on a 1099 form.

.350 Cellular Telephone Expenditures

The appropriate Senior Vice President must authorize acquisition and use of cellular telephones before procurement. An approved written request justification and a copy of the approved requisition for purchase must be on file for each telephone. Recurring monthly billings must be received in the Telecommunications Office. Telephones are to use for conducting official business only, and should not be used for personal purposes.

.360 Agency Transaction Voucher (ATV)

This form is required to record all transactions among University departments related to sales, services, recovery of costs, and transfers of expenditures and revenues among University Departments. Departments should forward Agency Transaction Vouchers to Financial Reporting.

.370 Gift Cards

Gift Cards may only be obtained by employees who have the SPCC (Small Purchase Credit Card).

A cap of $500.00 must be placed on each gift card.
An employee may complete a �point of sale� purchase of a gift card with a declining balance for their department.
All purchases must be documented and receipts retained for purchases made using the gift card. (Departments are responsible for any documentation that would be required in an Audit).
These purchases must fall within the Accounts Payable and Procurement guidelines.

.380 International Wires

This section addresses international wires for payment to vendors for Accounts Payable disbursements. All wires related to International Studies Programs are facilitated through the International Accounting Office within Accounting Services.

Departments may initiate an international wire payment by completing the Accounting Voucher as described in subsection 610 and forwarding the completed voucher with all appropiate supporting documentation to the Finance Support – Banking Relations Office, MSC 5711. Questions may be directed to Sean Smoker at x86888 or by completing an online request.

.390 Incentives

To encourage participation in campus surveys and focus groups, an incentive with a value limit of $25 per item may be randomly awarded to a member of the group of participants. Gift cards may not be given as incentives, with the exception of JMU Dining Services and Bookstore. These incentive items are to be coded to 141300.

.391 Non–monetary Recognition Awards

A non-monetary recognition award that is of nominal value (less than $100) may be given infrequently by the department to their employees. Examples of these non-monetary recognition awards include: plaques, certificates, trophies, pencils, pens, desk items, cups and mugs.

.400 Receiving Reports

.410 General

Before a vendor is paid for materials delivered, it is important to verify that the item delivered meet the standards and quantities specified in the order.

The receiving report copy of the purchase order or the Receiving Report form must be completed for all items purchased $5,000 and greater and must be signed by a different individual than the person originating the purchase. The employee who receives the goods and verifies the quantity and condition must enter the date received and his/her full signature. Initials or a signature stamp is not acceptable. A copy of the bill of lading or packing slip is required for any purchase $5,000 or greater.

.420 Inspection, Acceptance, and Rejection of Goods or Services

Departments are responsible for inspecting and accepting goods or services purchased. Inspection is the close and critical examination of goods or services delivered or picked up to determine conformance with applicable requirements or specifications.

.430 Lost or Damaged Shipments

It is the department's responsibility to promptly inspect deliveries for shortages and shipping damages at the receiving location. Shortages or shipping damages must be noted to Accounts Payable so that payment is not made until the vendor has replaced the damaged goods for departmental purchases. Otherwise note on the receiving receipt/packing slip concealed damage must be reported to the carrier and vendor within seven days of receipt and before removal from the point of delivery. Departments must keep the carton for concealed damage claims.

.440 Rejection of Goods

Rejection of goods or services is the responsibility of the requisitioning department whenever the goods or services do not meet contract requirements. In case of a partial or total rejection, the department must take immediate action to notify the vendor as to the reasons for rejection and to request prompt replacement with a mutually agreeable replacement date.

When a rejection is made against a purchase order or contract, the department must notify the appropriate buyer in the Procurement Services department by telephone.

.500 Processing Procedures

.510 Department

Verifies that sufficient funds are available in the departmental budget before making any purchases or processing any procurement documents.
Prepares appropriate procurement documents for purchases via eVA unless excluded from this process (see exclusion list on Procurement's eVA page).
Receives goods and services from the vendor, completes a receiving report, if $5,000 or greater.
Receives vendor invoice or a faxed copy from Accounts Payable with eVA DO# listed on invoice. Sends receiving report (if required) to the Office of Accounts Payable within five working days of receipt. Attaches the vendor invoice to an 8 1/2 x 11 size blank sheet of paper if the cash register slips or other vendor invoices are not standard letter size.

Required information of each invoice:
- Vendor name and address
- Vendor Federal Identification Number of the vendor, or Social Security Number of the Individual being paid
- Vendor Invoice Number
- Vendor Invoice Date
- Description of goods or services
- Amount being paid
- Maintains records of all expenditures and verifies charges to departmental budget report. Contacts the Cash & Investments Office to reconcile differences.
For all invoices without an "eVA DO#" shown on it, completes an Accounting Voucher to initiate payment.

.520 Accounts Payable

Receives procurement documents for expenditures $5,000 or greater. Reviews for proper authorization signature, correct coding, and appropriateness of purchase.
Receives Receiving Report and Bill of Lading from Department if $5,000 or greater.
Receives invoice from Vendors, date stamps, and records in the Financial Information System.
Matches invoice with procurement document, receiving report, and any other supporting documentation available.
Forwards or Faxes the invoice to the department that originated the purchase.
Receives completed accounting voucher (see subsection .615 - Forms Preparation Instructions) for all invoices without an eVA DO # shown on them. Reviews completed accounting voucher and documentation for completeness and correctness. If incorrect or incomplete, returns documents to department.
The department would only contact Accounts Payable when an invoice should not be paid. If no response from the department, eVA invoices up to $4,999 will be paid within five (5) business days. Accounts Payable staff will use the coding and signature on the eVA DO as authorization to make payment.
Calculates payment due date and processes invoice for payment. In the absence of contractual terms and in accordance with the Commonwealth's Prompt Pay Act, payment shall be due thirty (30) days after receipt of proper invoice or material/service, whichever is later.
Inputs payment information into the Financial Information System, generates necessary reports to determine accuracy of postings, budget exceptions, accuracy of due dates, past due payments, etc.
Initiates the payment posting process and generates journal entries. Verifies information, executes CARS EDI Transmittals and generates the Interface Transmittal Listing. Reconciles and distributes reports. Saves files for check processing.
Provides assistance to University Campus for processing expenditures.

.530 Finance Support

Processes university disbursements (including international wires).
Transmits files to the Commonwealth Financial Reporting System (CARS) system at the Department of Accounts in Richmond. Verifies accuracy of reports in CARS.
Receives a manual copy of the Budget Exception Report, resolves exceptions not resolved by Accounts Payable.
On a monthly basis reconciles CARS expenditure reports to Financial Information System expenditure reports.

.600 Forms Preparation and Submission

.610 Accounting Voucher

.611 Required

This form is required to initiate payment to vendors for all invoices without an eVA DO# listed on it and for all payments to vendors via international wire.

.612 Where to Obtain Blank Forms

An electronic form is available online.

.613 Number of Copies

Complete two copies.

.614 Where to Send Completed Forms

Send the Original form with supporting documentation to the Office of Accounts Payable, retain one copy for departmental files. Senitive data (i.e. social security numbers, etc) must not remain on departmental documents.
NOTE: Accounting Vouchers for payment by international wires are sent directly to the Finance Support – Banking Relations Office, MSC 5711.

.615 Forms Preparation Instructions

Following are detailed instructions for the preparation of the Accounting Voucher. Enter the following information only; all other areas should be left blank.
Print a copy of an accounting voucher (with numbers to coincide with the instructions) to assist you with completing your voucher. For International Wire of Foreign Currency sample, click here. For sample of foreign wire of US Dollars, click here

#1 - Agency Name/Delivery Address: Enter the name and address of the department being charged.

#2 - Vendor Information: Enter the Vendor�s name, Address, City, State, and Zip Code. Enter the Federal Identification Number of the vendor, including the suffix or the Social Security Number of the individual being paid. Enter the Peoplesoft Vendor number, if known. For services provided by individuals not employed by James Madison University, a completed W-9 form must be on file before a payment is processed. Contact System Support @ x82941 to determine if the W-9 form is on file.

For International Wires, the Vendor Information section should be completed as follows:
Name - JMU
Address - PK to Finance Support
PeopleSoft Vendor # - 5432.5
remaining fields left blank.

#3 - Date Voucher Prepared: Enter the date the voucher was prepared.

#4 - Contact Person: Enter the name of the person to call if questions arise.

#5 - MSC: Enter the Mail Stop Code (MSC) for the department preparing the voucher.

#6 - Phone No.: Enter the telephone number of the person to call, if questions arise.

#7 - Vendor Invoice: Enter the vendor's invoice number. Only 1 invoice number may be paid on this form. If no invoice # is present, enter a "meaningful" short description which will appear on the check advice.

#8 - Invoice Date: Enter the date of the vendors invoice.

#9 - P. O. No.: Enter the number of the Purchase Order, if applicable, or the Travel Authorization Number, if applicable.

#9a - eVA exclusion #: Select the exclusion number from the "pulldown" box (by using the "arrow" to display your selections) that matches the allowable, excludable items/categories that do NOT need to be procured through the eVA Procurement System.

#9b - Non-eVA purchase explanation Provide an explanation of non-eVA purchase if no exclusion # is provided in #9a.

#10 - Approving Signature and Date Signed: Enter the signature of the individual responsible for the departmental budget being charged. This signature must be an approved one on the Signature Authorization Listing maintained by the Office of Finance. The signature attests that the goods and services were received in good condition. Enter the date the individual signed as "approving signature".

#11 - Description: Enter a complete description of each item or service provided.

For International Wires, the description field must include all of the following:
beneficiary bank name
beneficiary bank address
beneficiary bank branch and address/number (if applicable)
beneficiary account number
the exact name of the beneficiary account
the purpose of the wire
the amount to be wired
the type of currency the payment is to be made in
The SORT and/or SWIFT code(s) or IBAN must also be included in this space.

#12 - Quantity: Enter the quantity received.

#13 - Unit Price: Enter the price for each unit received.

#14 - Amount: Enter the amount. (Leave blank for international wires - Cash & Investments will complete after wire is finalized.)

#15 - Department ID #: Enter the Departmental ID Number.

#16 - Acct. #: Enter the expenditure account code that best describes the goods or services provided.

Total Amount: All total amounts are calculated. (Both places on the form)

.620 Receiving Report

.621 Required

This form is required ONLY for departmental purchases $5,000 or greater. A copy of a bill of lading or packing slip is also required for any purchase $5,000 or greater.

.622 Where to Obtain Forms

The form is available online.

.623 Number of Copies

Complete one form.

.624 Where to Send completed Forms

Send completed forms to the Office of Accounts Payable.

.625 Form Preparation Instructions

Date Prepared: Enter the date you prepared the form.

Vendor: Enter the Vendor's name.

P. O. No.: Enter the Purchase Order Number.

Requesting Department: Enter the name of the Department that requested the goods or services.

Attention: Enter the name of the departmental contact person.

Rec'd. at Dept By: Signature of the individual who received the goods or services.

Date Rec'd: Enter the date the goods or services were received.

Item Description: Enter a complete description of the goods or services received.

Quantity: Enter the number of items received, if applicable.

ETF Reference: Enter the ETF (Equipment Trust Fund) Reference number if receiving ETF equipment.

Shipment: Partial/Complete: Indicate if the shipment was partial or complete.