JAMES MADISON UNIVERSITY FOUNDATION
POLICIES AND PROCEDURES
DISBURSEMENT OF OPERATING FUNDS POLICY
POLICY # E-101
DATE: March 19, 1999
Approved: April 17, 1999; Revised June 23, 2003
POLICY: TO ENSURE THAT DISBURSEMENTS OF FUNDS ARE MADE ONLY UPON PROPER AUTHORIZATION BY MANAGEMENT, SUPPORTED BY PROPER DOCUMENTATION, FOR VALID BUSINESS PURPOSES THAT ARE REASONABLE AND NECESSARY, PROPERLY RECORDED, AND INCOMPLIANCE WITH GOVERNMENTAL REGULATIONS.
1. A description of the expenditure that includes the business purpose and the amount requested. [Travel, Entertainment, and Gift expenditures require additional description for IRS compliance. The Foundation does not use a per diem method for the reimbursement of meals & incidental expenses or lodging expenses. Paid receipts are required to support claims for reimbursement of business expenses that are reasonable and necessary to accomplish a business purpose.]
2. Travel expenses must include the dates of departure and return; the travel destination; the method of transportation used; and a statement regarding the business purpose.
3. Entertainment, which includes business meal expenses, must include the name(s) of the individual(s) entertained, where the entertainment took place, and a statement regarding the business purpose to be accomplished.
4. Gift expenses must include the name of the individual receiving the gift, a description of the gift, and a statement regarding the business purpose to be accomplished. (Gift expenditures are limited. See H-8.)
5. An original invoice or an original paid receipt is required to properly support disbursements.
6. Original support documents are usually not available when payment is made directly to the university cashier (JMU budget recoveries or budget funding, as an example). Therefore this type of disbursement request must be clearly described on the PV.
7. Payee's name and mailing address. (Include the tax identification number of individuals or non-corporate businesses when payment is for non-employee services.) Checks will be mailed to the payee's address, unless stated otherwise on the PV.
8. The name and number of the Foundation account to be charged.
9. Approval from two university administrators. The account guardian and his/her supervisor should indicate approval of the disbursement by signing and dating the PV (see item C-10 below). Account guardians are determined by assigning Foundation accounts to JMU Program Directors whose program corresponds with the account's restrictive purposes. Individuals should have approval from the account guardian and, as required for a particular disbursement, from the supervisor of the account guardian and the President of the Foundation before making financial commitments.
10. The requirement to have approval from two university administrators is automatically waived for disbursement requests of $75 or less. Only the account guardian needs to approve PVs of $75 or less. However, the supervisor of the account guardian has the right to require his/her approval. The supervisor should notify the account guardian and the Foundation when desiring to approve PV of $75 or less. Disbursement procedures requiring prior approval from the President of the Foundation are not waived by this $75 limit.
11. If completed PV forms are received in the Foundation's office by 5:00 p.m. Thursday, checks will normally be available for payment/mailing by the following Tuesday.
1. The name of the scholarship and number of the Foundation account to be charged. The name of the Foundation account is needed, if it is different from the scholarship's name.
2. The name of the student nominated for the scholarship.
3. An affirmative answer to the following question; "Does the student recipient comply with the above-named scholarship criteria?"
4. Instructions regarding the dollar amount and the time-period to apply the scholarship.
5. Date and signature of the account guardian indicating approval.
6. Completed SN forms are processed as received. The university bills the Foundation at mid-term of each semester for scholarships. Checks are sent to the university's student accounting office for credit to the student's account.
1. -compliance with IRS regulations;
2. -compliance with "Uniform Management of Institutional Funds" Act;
3. -reasonableness of the request based on prudent business practices and university objectives;
4. -proper and adequate documentation attached;
5. -account's name and number are correct;
6. -expenditure agrees with account's purpose;
7. -funds are available, and required signatures are present.
1. All disbursements must be for the benefit of the university and not for the private inurement of any individual.
2. University employees may receive reimbursement for expenditures made on behalf of a university program. Original supporting documentation that includes proof of payment must be submitted with the PV.
3. To compile the required information to support travel, entertainment, and gift expenditures, the Foundation's "business expense reimbursement" form must be attached to the PV.
4. When the university has reimbursed a portion of out-of-pocket expenditures (lodging and business meals, as an example), then the balance may be requested from the Foundation. The expenditure must be reasonable and customary to the business purpose the expenditure is attempting to accomplish. These requests require the following to be attached to the PV: copies of all documents submitted to the university, proof of the university's reimbursement, paid receipts supporting the expenditures, and an explanation why the university did not reimburse the amount (balance) requested from the foundation.
5. Requests for reimbursement must be received by the Foundation within one (1) month of the expenditure. Requests for reimbursement that were submitted first to the university must be received within (2) months of the expenditure.
6. The Foundation will not disburse operating funds for:
- Personal expenses (family, spouse, other individuals not employed by the university and not on official business of the university);
- Flowers, unless used as decorations for receptions or banquets;
- Fines for personal negligence;
- Gifts to other charities;
- Gifts to JMU employees, with one exception for "employee achievement awards" that are given for length of service (five years or more. See H-8B).\
- Gift Certificates;
- Personal meals (not on official business);
- Coffee, unless used as beverage for receptions or banquets;
- Political contributions;
- Business expenses supported by a per diem method (except mileage);
- Questionable items (those that may give the perception of misuse of charitable funds).
7. Bids are normally required for goods or services costing over $5000. Persons expecting to use Foundation funds to purchase goods or services costing over $5,000 must obtain prior approval from the Foundation office.
8. Disbursements for alcohol are made according to the procedures stated in the section, "Specific Guidelines for Disbursements", paragraph #H-10.
H. Specific Guidelines for Disbursements
1. Those requesting payments to individuals for performing services must follow these procedures:
2. Contact the Foundation to ensure proper tax status (employee vs. independent contractor) and to ensure ability to provide payment for that purpose.
3. An employer-employee relationship must be handled through the university's payroll system. Foundation funds may be used to reimburse the university budget charged with the payment. A copy of the completed JMU Personnel Action Request (PAR) form must be submitted with the PV.
4. Individuals currently employed by the university must receive "payments for services" as described in item b. above.
5. Independent contractors may receive payment directly from the Foundation. Include an IRS Form W-9 (Request for Taxpayer Identification Number and Certification) with the contractor's invoice as attachments to the PV.
6. Recoveries to the university budgets are payable to the JMU Cashier and to the university budget code to be credited.
a. The Foundation will reimburse for auto mileage while on official business of the university at the same mileage-rate paid by JMU.
b. Airline ticket purchases, whether purchased personally or prepaid by the Foundation, need to be substantiated by original invoice and by a validated boarding pass. For tickets that are prepaid, a validated boarding pass or its equivalent must be forwarded to the Foundation when the traveler returns home.
c. The Foundation will not pay for travel expenses of non-employees unless there is a bona fide business purpose.
d. The travel expenses for prospective employees that are reasonable and necessary are allowable.
8. Payments for inventory items purchased on behalf of the university require prior approval by the President of the Foundation. Approval must be obtained before an obligation is made otherwise the request for payment will be denied. Inventoried items must be accounted for as they are used. The purchase of inventory items having a market value less than $25 per item is not subject to prior approval or to inventory accounting.
9. Payments for merchandise bearing JMU trademarks are limited to merchandise produced by manufacturers that are officially licensed to produce JMU trademarks. Officially licensed manufacturers are licensed and registered by the Foundation's licensing agent, The Collegiate Licensing Company (CLC). A list of licensed manufacturers is maintained in the Foundation office.
10. Loans or advances are prohibited. The university provides for temporary travel advances and salary advance loans.
11. Reimbursement or payments for non-deductible employee business expenses (moving expenses as an example), which the IRS considers taxable wages, must be paid via the university payroll system. Foundation funds may reimburse the university budget charged with the payment. A copy of the completed JMU Personnel Action Request (PAR) form must be submitted with the PV.
12. Business gifts must be approved by the President of the Foundation prior to purchasing gifts having a market value greater than $25. Obtaining approval prior to purchasing is necessary to assure you can be reimbursed by the foundation. Business gifts must be items of tangible personal property. (See H-8a and H-8b below for additional guidelines for business gifts.
a. Prohibited Business Gift Expenditures:
- Gifts of cash or cash equivalent such as gift certificates are prohibited gift expenditures.
- Gifts to university employees such as flowers or merchandise are prohibited gift expenditures. See Part b. below.
- Gifts to self-employed individuals or employees of businesses outside the university who are doing work for the university are prohibited gift expenditures.
b. Allowable Gift Expenditures:
- Non-cash gifts made to individuals or businesses that do not have a business relationship with the university are allowable gift expenditures. A valid business purpose must be documented on the Foundation's "payment voucher" form. Approval must be given by the President of the Foundation before purchasing gifts having a value greater than $25.
- Gifts to JMU employees based on length of service of five (5) years or more are allowable gift expenditures. This type of gift is called "Employee Achievement Award". Approval must be given by the President of the Foundation before purchasing gifts having a value greater than $25. [The value of these gifts cannot exceed $400. To avoid taxation to the recipient, the gift (item of personal property) must be given to the employee as part of a meaningful presentation for length of service (five years or more) under circumstances that do not create a significant likelihood of disguised compensation, per IRS regulations for a nonqualified award.]
13. Business Meals
a. When a JMU employee is acting as an official representative of the university, meals incurred during non-overnight travel can be deemed a business meal. This situation requires that the employee act as an official representative when discussing business with representatives of the State, with employees of other agencies, with private consultants, with prospective employees, etc. The employee must show that the expenses are commercially, rather than socially, motivated.
b. The situation where two university employees simply discuss work during a meal does not qualify for reimbursement.
c. Reimbursement of expenses incurred by university employees during pre-employment recruitment efforts is allowable. When there is a bona fide business purpose to invite the spouses of both the university employee and the recruit, reimbursement of the spouses' meals is allowable.
14. Alcohol expenses, which are customary and reasonable considering the facts and circumstances of the particular business setting, are allowable when the procedures set-forth below are followed.
a. Alcohol consumed during an official business meal is allowable. A claim for reimbursement should be made following procedures for Business Meals, H-9.
b. Alcohol consumed during a business event on campus involving a large group (15 or more individuals) is allowable. Use of alcohol on campus must comply with university procedures. Alcohol must be provided and served by the university's Division of Dining Services. The PV must include the names of the individuals attending (or the name of the group and the number attended), the location of the event, and a statement regarding the business purpose to be accomplished. Dining Services must invoice the university program or division for the alcohol expense. The invoice with a completed PV should be submitted to the foundation for payment.
c. Alcohol consumed during a business event off-campus involving a large group (15 or more individuals) is allowable. The Foundation prefers that alcohol is provided and served by university's Dining Services. If they cannot, then a caterer having a valid alcohol license must provide and serve the alcohol. The PV must include the names of the individuals attending (or the name of the group and the number attended) and a statement regarding the business purpose to be accomplished. A copy of the outside caterer's valid alcohol license is required to validate the license. The caterer must invoice the university program or division for the alcohol expense.
d. Alcohol consumed during business entertainment provided by a university administrator in his/her home involving a large group (15 or more individuals) is allowable. The Foundation prefers that alcohol is provided and served by the university's Division of Dining Services. [An exception to using Dining Services is available when entertaining at home. The exception allows the administrator to purchase the alcohol and serve it at home. However, reimbursement to the administrator is limited to $100 since a licensed alcohol vendor is not serving the alcohol.] The PV must include the names of the individuals being entertained (or the name of the group and the number attended) and a statement regarding the business purpose to be accomplished. Original paid receipts must be submitted with the PV.