Expenditures and Use of Funds
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 and Use of all Funds Administered by the University of Houston System
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 independent review and final approval by an administrative superior.
Certify: To approve an expenditure by signing the appropriate document, e-mail approval, or through electronic workflow. Such certification ensures that:
- The expenditure is made for the purpose for which funds were budgeted.
- The expenditure is properly authorized.
- The procurement process was followed, and the documents are prepared in accordance with all state, federal, UH System, and University guidelines.
- The funds required are available.
- 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 Approvers and 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 and 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, HEF funds, and other funds designated as state funds.
Source: Workflow path in the UHS Finance System; corresponds to a school, 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).
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 Department Approver of each division/department shall have authority to certify expenditure of university funds or to delegate such authority to an alternate 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 Vice President for Administration & Finance 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 ensure 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.
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 itemized 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 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, Discretionary 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 to the Accounting Services Coordinator in the Finance Office or submit the UHS Finance System Access Form (form processed through DocuSign only).
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 (form processed through DocuSign only). 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.
Restrictions on Expenditures
Expenditures are restricted based on the source of funding, which is determined by the fund code of the cost center used to pay the expenditure. For optimal budget management, it is prudent to utilize the most restricted funds first. The UHS Account List provides certain system-wide restrictions on use of certain account codes with certain fund codes. The following funds have particular restrictions on expenditures:
State Appropriated Funds: Funds appropriated by the State of Texas General Appropriations Act for various types of expenditures (generally fund code 1xxx). A list of expenditure restrictions with State Appropriated Funds may be found in the below locations as well as the UHS Account List.
- General Appropriations Act; specifies state funds appropriated each biennium and restrictions on those funds.
- Texas Comptroller’s eXpendit; summarizes non-travel expenditure rules.
- Texas Comptroller’s TexTravel; summarizes travel expenditure rules.
Higher Education Fund (HEF) Funds: Funds appropriated by the State of Texas for the purpose of acquiring, constructing, or improving tangible assets (generally fund codes 1008 and 7035). See the Guidelines for Expenditure for HEF in the UHV Purchasing Manual.
Designated Funds: Funds authorized by the Texas Education Code (TEC) from an additional tuition charge (designated tuition) more than statutory tuition that the University considers necessary for the effective operation of the institution (fund code 2064). Statutory tuition is a tuition charge authorized by the TEC in an amount determined by the Texas Legislature for resident and nonresident students. Department “M&O Funds” generally are Designated Funds. Designated funds are more restricted in use than other Local Funds and cannot be used for any entertainment expenses except for events that primarily involve students or prospective employees’ business meals. Specific restrictions by account can be found in the UHS Account List.
Designated Student Fee Funds: Funds from certain fees charged to students such as Library Fees and Extended Access & Support Fees (fund code 2063). Expenditures from 2063 cost centers are generally subject to the same restrictions as fund 2064 expenditures. However, if the funds are from a specific fee and it is clearly demonstrated that the expense is directly related to the purpose of the fee charged, the expense may be allowed.
Discretionary Funds: Funds generally from investment earnings that are therefore less restricted than other Local Funds (fund codes 2077, 3054). Used for expenditures not directly related to the University educational, research and public service mission. See UHV Policy B-9, Entertainment, Discretionary and Reimbursement of Other Business Related Expenses for information on allowable expenditures.
Auxiliary Funds: Funds from auxiliary enterprise operations (fund code 3xxx). Such operations furnish goods or services to students, faculty, staff, or others, and charge an amount directly related to, although not necessarily equal to, the cost of the goods or services. Expenditures from auxiliary funds are generally less restrictive than other Local Funds and should include the cost of goods or services provided.
Auxiliary Student Fee Funds: Funds from auxiliary student fees such as Student Service Fees and Student Center Fees (fund codes 3048, 3049, 3050). Expenditures are generally less restrictive than Designated Student Fee funds but must be related to the purpose of the specific fee charged.
Sales and Services Funds: Funds derived from the sale of goods or services (fund codes 2078, 2080, 3056). The cost of expenses to provide sales and services generally must be recorded in the same cost center as the revenues.
Restricted Funds: Funds from an external source other than a grant or contract whose use is limited as specified by the external source, generally a gift or endowment (fund code 4xxx). Restrictions vary based on the donor’s stipulations; refer to documentation of the donor’s intent for specific requirements.
Unit of Excellence Funds: Restricted gifts donated by staff or faculty for the purpose of showing support and appreciation for the staff, faculty, or operations of a particular department at the discretion of the Senior Administrative Official of that department (certain fund code 4041 cost centers). However, expenditures from such funds must be reasonable and necessary for carrying out the programs and activities of the University and have a clearly substantiated benefit and purpose. Since donations to the University are considered tax-deductible contributions, Unit of Excellence funds still must be used for the University’s tax-exempt educational purpose, which encompasses ordinary and necessary business expenses such as employee appreciation, professional achievement, or service recognition. Expenses in recognition of personal events, such as birthdays, weddings, births, anniversaries, illnesses, or a death in the family are generally prohibited. See UHV Policy B-9, Entertainment, Discretionary and Reimbursement of Other Business Related Expenses.
Sponsored Project/Grant Funds: Funds received from outside sources that require a deliverable as a result of the funding (fund code 5xxx). Restricted by the funding agency to be expended only in support of the funded project. All expenditures must have the additional approval of the UHV Research and Sponsored Programs Office; contact their office for guidance on allowed expenditures.
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:
- The day the University received the goods.
- The day the vendor completed performing its services; or
- The day the University received a correct invoice for the goods and services.
INTEREST --Per UH System Administrative Memorandum 03.A.01, Expenditure and Use 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:
- 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. Texas State Comptroller, Prompt Payment-Interest Rate
- If payment is made from State Appropriated Funds, accrued late interest of $0.01 or more must be paid.
- If payment is made by Local Funds, accrued late interest of $5.01 or more must be paid.
- 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 deposits to their financial institution.
Peer-to-Peer payment systems, such as PayPal, Venmo, Zelle, and Cash App are restricted methods of payment. Any payments made through any peer-to-peer providers via ProCard are considered to be an unauthorized purchase and the departments could be held liable for reimbursement. Reimbursement requests for any payments to vendors made through any peer-to-peer provider will not be reimbursed. If peer-to-peer payments are the ONLY payment method accepted by a vendor, a policy exception will need to be processed PRIOR to purchase with supporting documentation attached. The Sr. Director or Finance and Vice President of Administration and Finance or designee will review and either approve or deny the request for payment via peer-to-peer payments.
Per Texas 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.
Signature Obtained 05/31/2023
Robert K. Glenn, Ph.D.
Next Review Date: May 2028 (5 Years)
Origination: Finance Department