Fiscal Responsibility

Op3.12-9 Fiscal Responsibility

What is my role as Department Head regarding fiscal responsibility?

  • The University has decentralized budget planning and decision making to give departments more control over their expenditures. The University’s Fiscal Responsibility Policy provides guidance to the Department Head in the proper and legal use of scarce University resources. The University recognizes the value in being reminded it is not our money we are spending, and we want to spend it in a way our students and taxpayers agree is in furtherance of our educational mission.
  • The University receives funding from diverse sources ranging from taxpayers and students to benefactors. Regardless of the source, the University has an obligation to demonstrate that it has been, and continues to be, a wise steward of these funds.
  • See the University’s Fiscal Responsibility policy (G.1.13)

How do I know if an expenditure is appropriate?

The general rule is specifically addressed by state regulations, 1C.S.R.10-3(2), and applies to all expenditures (regardless of whether paid by P-Card, payment request, travel expense reimbursement, etc.) It states that:

any expenditure for goods or services which are not apparently or cannot be substantially justified as directly related to the transaction of state business is unallowable.

Examples of non-allowed expenditures per policy:

  • Employee parties
  • Holiday cards and decorations
  • Memorial Flowers
  • Traffic Tickets
  • Personal food for office
  • Employee Gifts
  • Personal Club Memberships
  • Political and Charitable Contributions
  • Agency Team Uniforms
  • Lunch Meetings with no outside guest

Holiday Receptions/Open Houses:

Expenses related to holiday, or other open houses, including food and beverages should be balanced between expression of employee appreciation and the benefit to employee morale, with fiscal responsibility. In addition to the authorized President’s holiday reception, each Vice President should limit such expenses for his/her division to $3 per full-time employee within his/her supervision annually. Any additional expenses should be reimbursed by Foundation or other private funds.

An exception is made for purchase of retirement, service, political and other recognition award gifts which may be certified as regular claims if reasonable in relation to the circumstances of the award, and primarily represent a token or recognition and not a reward with a cash equivalent or substantial monetary value. Claims for the expense of receptions for employee recognition events should be at a nominal price per person. Holiday decorations are allowed for commonly accessed public areas (see Holiday Decorations Guidelines policy).

Examples of allowed expenditures and approvals required:

The above link provides examples of both disallowed and allowed expenditures. Some expenditures are only allowed with the approval of the Vice President, or the President (or his/her delegate.) Note: Exceptions to the Fiscal Responsibility Policy must be approved by the Vice President.

Is it acceptable to have a disallowed expenditure paid through Foundation funds?

At times, it is acceptable for expenditures to be paid through departmental unrestricted Foundation funds. Generally, no expense should be paid by Foundation funds that would not be payable by University Funds (regarding its direct business purpose.) However, any alcoholic beverages expenditures for a group business meeting or event at which a donor or outside guest is in attendance may, with advance approval, be paid by Foundation funds. However, the rule of thumb remains that the expense is only appropriate if the expenditure for goods or services is directly related to the transaction of state business.

What are examples of expenditures that are not appropriate for Foundation or University funding?

  • Routine purchase of candy and sodas for the office staff
  • Payment of lunches (under rare instances, may only be approved in advance by the President or Provost)
  • Food during training events - may only be purchased for training if greater than two hours in duration
  • Hotel spa / massage services
  • Bar bills (personal/non-business related expenses)
  • Payment of personal long distance phone charges

See these Financial Services guidelines on expenditures:

On a practical basis - what should I do?

When unclear, err on the conservative side. In the past, various audits have questioned a number of departmental expenditures incurred. For example, sodas and snacks for staff and faculty; flowers; groceries; personal phones, iPods; etc.

At the same time, it should be noted that certain expenditures for one department may be directly related to the conduct of business, but not allowable for another department. For example, groceries can be directly related to classroom requirements for the Hospitality Department; purchase of blue jeans, costumes and props may be justified for the Theater Department; purchase of large group meals may be justified for the Band Department while the students are in practice; and purchase of large amounts of pizza may be justified for the Multicultural Services grants such as the Kauffman events.

Ultimately, as Department Head, you are accountable for all funds expended in your department, and the following is recommended:

  • All department members should be aware of the University’s policy and the Department Head’s explanation of expenses that are directly related to the department’s business. Unless the expenditure is clearly or substantially directly related to the business of the University, it should not be approved as an expenditure.
  • Have faculty and staff discuss with you in advance if there is any question.
  • Before incurring the expenditure, check first with your Budget Officer or Financial Services if you are unsure of the justification of the expenditure.
  • Documentation - Make sure that the expenditure is properly documented in terms of who, what, why (business purpose), where and when. Memories fade, but written support for the expenditure is important if scrutinized in the future.

What if I have questions?