University of Houston-Victoria
Policies

Expenditures and Use of Funds

Section: Fiscal Index: B-1

Purpose And Scope

To ensure prudent management of all funds entrusted to the University for carrying out its programs and activities, this policy outlines the principles governing university expenditures and transactions and prescribes guidelines for ensuring appropriate signature authority for all university expenditures. These guidelines are provided to assist all university departments in meeting their obligation of public accountability to the State of Texas, governmental agencies, and to other constituencies that have provided funds for the University's use.

This document is in compliance with UH System Administrative Memorandum 03.A.01, Expenditure of all Funds Administered by the University of Houston System.

Policy

All University expenditures shall be consistent with applicable state and federal laws and regulations; with any restrictions, rules, or regulations placed on the use of the funds by donors and granting or contracting agencies; and with prudent management practices. In addition, all expenditures must be reasonable and necessary for carrying out the programs and activities of the University within budget allocations. Expenditures must be approved by the Senior Administrative Official of the unit or designee, and must be documented in a way that clearly substantiates such reasonableness and necessity.

It is the responsibility of the Vice President for Administration and Finance to provide controls that ensure accountability for all university funds. The Senior Administrative Official of the unit is responsible for certifying all transactions within their budgetary allocations or delegating authority (not responsibility) to subordinates to certify such transactions. Such delegations are required to be in writing in the format prescribed in this document.

All requests for employee reimbursement of travel, entertainment, or other business related expenses are subject to the independent review and final approval by an administrative superior.

Definitions

Certify:

  1. To approve an expenditure by signing the appropriate document, e-mail approval, or through electronic workflow. Such certification ensures that:
    1. The expenditure is made for the purpose for which funds were budgeted.
    2. The expenditure is properly authorized.
    3. The procurement process was followed and the documents are prepared in accordance with all state, federal, UH System, and university guidelines.
    4. The funds required are available.
    5. The transaction complies with pertinent rules and regulations required by external funding sources and/or oversight entities.

Certifying Signatory: The University employee who is authorized to certify expenditures for a school, department, project, or division and whose signature, email approval or approval through electronic workflow must appear on any expenditure document initiated by that unit.

Department Approver:  The University employee who is authorized by the Senior Administrative Official for the school, division, or department as the Certifying Signatory for financial transactions that are processed through electronic workflow for a Source in the UHS Finance System or by signature or e-mail approval by the Certifying Signatory on a non-workflow document.  Documented on the list of Sources with Alternate Approvers.

Expenditure and Other Financial Documents: Generally, documents committing or eliciting payment from University funds, which require a Certifying Signatory’s signature, email approval or approval through electronic workflow.

Higher Authority Approver:  The University employee who is authorized as the Certifying Signatory for financial transactions if the transaction involves a reimbursement to the Department Approver. Must be a higher authority than the Department Approver; applies to documents that are processed through electronic workflow or by signature or e-mail approval of the Higher Authority Approver on a non-workflow document.  Documented on the list of Sources with Approvers and Alternate Approvers.

Local Funds: Generally, funds that are not appropriated to the university by the legislature; usually have less purchasing restrictions than state appropriated funds. Restrictions on grants may supersede normal university guidelines for local funds; agency funds (fund 9) generally have no purchasing restrictions.

Principal Investigator (PI): The faculty or administrator with responsibility for directing the technical aspects of a project, and/or carrying out research efforts within the scope authorized by the agency, and authorizing all expenditures of award funds within administrative constraints imposed by the agency, the state, and/or the University.

Processing Departments: The University administrative departments that review and approve documents, committing or expending the financial resources of the department: e.g., the Purchasing Department, the Finance Department, the Office of Financial Aid, the Student Billing Office, Human Resources, Contract Administration, etc.

Senior Administrative Officials: Personnel charged with the responsibility of ensuring that all transactions of budget allocations in their area are certified in compliance with University policy. Senior Administrative Officials include the President, Vice Presidents, Deans, School/Division/Department Administrators and Principal Investigators.

School/Division/Department Administrator: The chief officer within each school, division or department.

State Appropriated Funds: Funds appropriated by the Texas Legislature in the General Appropriations Act, whether held inside or outside the State Treasury. These funds include general revenue, special line items, HEAF funds, and other funds designated as state funds.

Source:  Workflow path in the UHS Finance System; corresponds to a school, division or department or a subdivision within a school, division or department as listed on the list of Sources with Approvers and Alternate Approvers.  Subdivisions of a school, division or department must be requested by the Senior Administrative Official of the school, division or department.

Sponsored Project/Grant Funds: Funds in cost centers over which the Research and Sponsored Programs Office has stewardship responsibility.

University Funds: All monetary resources available in institutional cost centers--from all funds, all sources except for funds held by the institution as fiscal agent for individuals or organizations (Agency Funds/ Fund Code 9xxx).

Procedures

Accountability

To provide controls that ensure accountability for all university funds, the following principles shall govern:

  • The Senior Administrative Official of a division or department is entrusted with the authority and has ultimate responsibility for ensuring that procurement, expenditure, cash handling, and other financial matters are managed in accordance with this, other institutional policies and procedures, and any pertinent rules and regulations required by external funding sources and/or oversight entities.
  • Only the Senior Administrative Official of each division/department shall have authority to certify expenditure of University funds or to delegate such authority to a designated Department Approver. Authority will be delegated to a very limited number of capable, responsible personnel within each unit. In the absence of a Department Approver, either the Higher Authority Approver or appropriate Vice President or the President may manually sign, email approve or electronically approve transactions.
  • Travel, entertainment, and other business-related employee reimbursable expenses must be certified by an administrative superior.  Such expenses payable to the Department Approver must be approved by the Higher Authority Approver either in electronic workflow or by signature or email approval. All reimbursements to the President will be reviewed and approved by the Chancellor or designee.
  • Expenditure documents, i.e. payroll reallocations, vouchers, expense reports and contractual agreements, must be submitted to the Research and Sponsored Programs Office for review and approval when sponsored project/grant funds are used.
  • The Department Approver must review transactions within their area for compliance with all applicable internal and external rules and regulations, and by signature, e-mail approval, or workflow approval must assume responsibility for that compliance.
  • Individual transactions greater than one million dollars with the exception of construction related and certain institutional transactions must also have the additional approval of the appropriate Vice-President for the cost center(s) involved in the transaction or the approval of the President.  Individual non-excluded transactions greater than one million dollars involving the President’s cost centers must have the additional approval of the Vice President for Administration and Finance. The Finance Department will maintain a list of excluded transactions and shall work with the University of Houston System to perform an annual review of non-excluded transactions on a sample basis to insure compliance with this requirement.
  • Certain specialized purchases require additional approval by the department with oversight responsibility for those items.
  • University processing departments responsible for procurement, payment, or other financial activities shall not approve or process any procurement or expenditure request that has not been certified by the properly authorized Certifying Signatory.

Documentation Standards

Before expenditures are incurred or reimbursement sought against any University funds, there must be evidence that procurement guidelines have been followed that ensure a valid commitment of university funds.

Any obligation incurred by a University of Houston-Victoria employee contrary to university guidelines becomes the personal obligation of the employee and not the University.

Requests for expenditures against University funds shall be fully documented and certified for payment in accordance with these guidelines and with other applicable institutional, UH System, state and/or other governmental agency guidelines prior to the authorization of any payment:

  • Every expenditure request must be certified by the signature, e-mail approval or approval in electronic workflow of the properly authorized Certifying Signatory for the type of commitment and the department from which that expenditure is requested. Expenditure commitments made through purchase requisitions are certified at that level.
  • All expenditures against sponsored project /grant funds require the signature, email approval or approval in electronic workflow of the Principal Investigator of the project/grant and the Director of Grants and Contracts in the Research and Sponsored Programs Office on applicable expenditure documents.
  • Generally, payment or reimbursement for purchases of materials and services requires at the minimum an invoice or receipt from the vendor. Date of receipt must be documented. Purchases made by purchase requisition also require a receiving report and a purchase order (PO) voucher. The receiving report must be approved by the individual actually receiving the material and/or the individual authorized to inspect material and certify receipt of materials.
  • Payments for previously approved contractual commitments shall be made against properly detailed invoices or progress payment requests, the terms to be consistent with the terms of the contract. All contracts shall be reviewed and executed in accordance with UHV Policy E-12, Contract Administration.
  • Specific documentation requirements for travel and entertainment expenses are addressed in UHV Policy F-1, Reimbursement of Travel, UHV Policy F-5, Travel Arrangements, and UHV Policy B-9, Entertainment and Reimbursement of Other Business Related Expenses.
  • Requests for expenditures not meeting the documentation standards required for that document and other institutional guidelines will be rejected by the processing department and returned to the originating department with the reason for rejection stated. Unless the problem is resolved in accordance with appropriate guidelines, the payment will not be approved.

Certified Signatory List

The Accounting Services Coordinator in the Finance Office maintains the list of Sources with Approvers and Alternate Approvers for the UHS Finance System.  This list documents the authorized Department Approver and Higher Authority Approver (and alternate(s)) for each Source for the University in the UHS Finance System. 

When any change occurs in the authorized Department Approver or alternate, the Senior Administrative Official shall submit a written authorization or the UHS Finance System Access Form to Accounting Services Coordinator in the Finance Office.

Delegation Of Authority

Approval authority is assigned to the Senior Administrative Official for cost centers which are directly under their supervision. This authority as Certifying Signatory may be delegated by the Senior Administrative Office to a designated Department Approver by submitting the proper written authorization or authorization of appropriate security access with the UHS Finance System Access Form. Although the Senior Administrative Official may delegate approval authority to a Department Approver, this does not relieve them of their responsibility for expenditures within cost centers under their control. For this reason, careful consideration must be given to the selection of capable, reliable employees when delegating approval authority for the authorization of transactions.

Prompt Payment

  1. Due Date- In accordance with the State of Texas Prompt Payment Act, Texas Government Code Chapter 2251, most vendor payments are due by the 30th calendar day after the latest of the following:
    1. The day the University received the goods;
    2. The day the vendor completed performing its services; or
    3. The day the University received a correct invoice for the goods and services.
  2. Interest – Per UH System Administrative Memorandum 03.A.01, Expenditures of all Funds Administered by the University of Houston System, if payment is not made to a vendor or the vendor’s financial institution by mail or electronic transmission by the applicable due date, then the University is liable to the vendor for interest in compliance with the following provisions:
    1. Interest accrues beginning on the day after the payment is due through the date payment is mailed or transmitted electronically to the vendor or vendor’s financial institution. The applicable interest rate at the time is specified by the State Comptroller’s Office.
    2. If payment is made from State Appropriated Funds, accrued late interest of $0.01 or more must be paid.
    3. If payment is made from Local Funds, accrued late interest of $5.01 or more must be paid.
    4. Payments from Sponsored Project/Grant Funds will not pay interest since late payment interest payments are not allowed from these funds.

Method Of Payment

Payments may be made by voucher or using a ProCard subject to the requirements of the ProCard Manual.

Per University of Houston System procedures, payments to vendors made by voucher generally must be made by direct deposit.  Therefore, vendors are required to set up direct deposit to their financial institution. 

Per State Government Code § 403.0551, Deductions for Repayment of Certain Debts or Tax Delinquencies, the University, as a state agency, is prohibited from making a payment if the payee has an indebtedness or tax delinquency to any state agency until such indebtedness has been satisfied.

References

  1. State of Texas Prompt Payment Act, Texas Government Code Chapter 2251
  2. UH System Administrative Memorandum 03.A.01, Expenditures of all Funds Administered by the University of Houston System
  3. UHV Policy B-9, Entertainment and Reimbursement of Other Business Related Expenses
  4. UHV Policy E-12, Contract Administration
  5. UHV Policy F-1, Reimbursement of Travel
  6. UHV Policy, F-5, Travel Arrangements
  7. Sources with Approvers and Alternate Approvers (Available on UHV Intranet)
  8. UHS Finance System Access Form
  9. ProCard Manual (Available on UHV Intranet)

Approved by:

Signature Obtained______________ 8/29/18______________
Robert K. Glenn, Ph.D.                        Date
President

Next Review Date: September, 2023
Originating Department: Finance Department