Overview of Local Funds Expenditure Policy May 2017

Background The Commonwealth of Virginia stipulates the use of state funds, identifying permissible expenses and thresholds for those expenses. Under restructuring, W&M and other Tier 3 institutions, have additional authority to spend state funds in certain circumstances, with approval by the Virginia Department of Accounts (DOA). DOA also recognizes that institutions of higher education have locally controlled, university funds that may be guided by separate university policy. Historically, W&M has opted to handle all expenditures in accordance with state expenditure requirements. University policy, currently under development, will allow for additional expenses to be covered by local university funds within policy limits.

The Business Case for a New Policy Business Needs – Academic and administrative units often have bona fide business needs that are not covered fully by state expenditure policy. Administrative Efficiencies – Current limitations often require business units to process payments through multiple entities, splitting payments across the university and an affiliated foundation. Excessive Use of Reimbursements – Expenses not allowed under current policy often require employees to “front the money” and get reimbursed by an affiliated foundation. Consolidation and Better Management of University Expenditures – Current practice makes it difficult to identify common expenses, vendors, and opportunities for more strategic contracting and sourcing.

What the New Policy Does NOT Change? Procurement requirements All items purchased for use by the University, regardless of fund source, must comply with the University’s Governing Rules for Procurement. SPCC requirements The small purchase charge card (SPCC) is a method of payment. Regardless of whether something is paid through the Accounts Payable Office or through an SPCC transaction, the expense must be allowable under state or local expenditure policies, as appropriate. Donor restrictions If the funds have a donor restriction associated with them, the funds must still be used in accordance with the donor’s wishes, consistent with university procurement policy.

What funds will be considered “local university funds”? With the new local funds expenditure policy, university-controlled funds that are not appropriated by the state or revenue derived from students fees. Examples include: BOV Private Funds – Unrestricted (1Zxxxx), Restricted Expendable Gifts (2Zxxxx) Local Funds (1Yxxxx) Local Auxiliaries (312xxx)

What about foundation funds? The local university funds policy applies only to funds managed by the University (Chart W). However, for units with funds at any of the university’s affiliated foundations, a local fund can be established (if one doesn’t already exist) to handle allowable expenses. Funds can be transferred from the foundation(s) to the local fund as a revenue source to offset the expense.

What about agency funds? Agency funds (81xxxx) are NOT intended to be used for university business. University activities not funded by state appropriated funds should be charged to local university accounts with offsetting revenue deposited into those accounts as needed.

Expense Type Description State Policy University Local Funds Car Rental GPS and Fuel Service Plan Not Allowable Allowable with bona fide business purpose Insurance Extreme circumstances with justification of why traveler could not use the mandatory contract Taxi Tip Maximum 15% Up to 15% Excess of 15%, not to exceed 20% Airline/Train Economy Class Mandatory Upgrade to business class for travel greater than 8 consecutive hours Cost of excess of Economy class for travel that is less than 8 hours with justification.

Expense Type Description State Policy University Local Funds Airline/Train Upgrade Seating Not Allowable Cost in excess of Economy class seat. First Class is prohibited. Baggage Fee Up to $60 $61 and above with justification Parking and Tolls Parking and road tolls Allowable with a bona fide business purpose

Expense Type Description State Policy NEW Local Funds Policy Lodging Conference Hotel Excess of Lodging Allowance for Hotel Up to 200% with Departmental Approval Excess of 200% with CFO pre-approval and cost benefit comparison Non-Conference Hotel Excess of Lodging Allowance for Hotel CHANGE: Up to 150% with Departmental Approval Excess of 150%, up to 200% with Dean or VP Approval Resort Fees Allowable

Sample of Lodging City New York City, NY Washington DC Charlottesville, VA GSA Lodging Rate (100%) $ 267.00 $242.00 $126.00 150% of GSA Lodging Rate $400.50 $363.00 $189.00 200% of GSA Lodging Rate $534.00 $484.00 $252.00 250% of GSA Lodging Rate $667.50 $605.00 $315.00

Expense Type Description State Policy University Local Funds Business Meals Not Covered by Per Diem, Includes Catered Events Business Meals (e.g., meals with candidates, potential donors, guest speakers, etc.) Up to 150% maximum of per diem amount Excess of 150% up to 200% of standard rate with Dean or VP Approval Expenses for candidates’ spouses Not Allowable Allowable under the same rules as Business Meal Exception. Alcoholic Beverages Alcoholic Beverages up to $20 per person, including tax and tip. (Not part of per diem cap)

Sample of Per Diem (Williamsburg) City Breakfast Lunch Dinner Standard Per Diem (100%) $15.00 $16.00 $28.00 150% of Per Diem $22.50 $24.00 $42.00 200% of Per Diem $30.00 $32.00 $56.00 Rates include tax and tip.

University Local Funds Description State University Local Funds Flowers/Plants Flowers/ Plants for public events   Flowers for public events with bona fide business purpose (e.g., Commencement, Charter Day, public performances). Public/ Common Area Not Allowable Office plants when located in a public/common area in order to improve the office or building appearance. Non-Employees Flowers/plants to non-employees up to $100 with a bona fide business purpose. Employee Immediate Family Flowers/plants or donations in lieu of flowers/plants up to $100 for the death of an employee’s immediate family member (i.e., parent, step-parent, spouse or child) Flowers/Plants Flowers/Plants for public events   Flowers for public events with bona fide business purpose (e.g., Commencement, Charter Day, public performances). Public/Common Area Not Allowable Office plants when located in a public/common area in order to improve the office or building appearance. Non-Employees Flowers/plants to non-employees up to $100 with a bona fide business purpose. Employee Immediate Family Flowers/plants or donations in lieu of flowers/plants up to $100 for the death of an employee’s immediate family member (i.e., parent, step-parent, spouse or child) Non-Cash Gifts and Recognition for Employees Employee Non-Cash Awards Employee recognition awards up to $50 in value per employee per year. Awards may include food, flowers, or gifts in recognition of exemplary service. Gift cards are NOT allowed. Non-Cash Gifts and Recognition for Volunteers or Other Non-Employees Awards or recognitions for volunteers or other individuals not employed by the College Allowable up to $50 per individual per year with a bona fide business purpose. Gift cards are NOT allowed. Non-Cash Student Recognition Awards Awards or recognitions for student contributions to the organization Allowable up to $100 per student with appropriate documentation. Gift cards are NOT allowed.

University Local Funds Description State University Local Funds Non-Cash Gifts and Recognition for Employees Employee Non-Cash Awards Not Allowable Employee recognition awards up to $50 in value per employee per year. Awards may include food, flowers, or gifts in recognition of exemplary service. Gift cards are NOT allowed. Non-Cash Gifts and Recognition for Volunteers or Other Non-Employees Awards or recognitions for volunteers or other individuals not employed by the College Allowable up to $50 per individual per year with a bona fide business purpose. Gift cards are NOT allowed. Non-Cash Student Recognition Awards Awards or recognitions for student contributions to the organization Allowable up to $100 per student with appropriate documentation. Gift cards are NOT allowed. Flowers/Plants Flowers/Plants for public events   Flowers for public events with bona fide business purpose (e.g., Commencement, Charter Day, public performances). Public/Common Area Not Allowable Office plants when located in a public/common area in order to improve the office or building appearance. Non-Employees Flowers/plants to non-employees up to $100 with a bona fide business purpose. Employee Immediate Family Flowers/plants or donations in lieu of flowers/plants up to $100 for the death of an employee’s immediate family member (i.e., parent, step-parent, spouse or child) Non-Cash Gifts and Recognition for Employees Employee Non-Cash Awards Employee recognition awards up to $50 in value per employee per year. Awards may include food, flowers, or gifts in recognition of exemplary service. Gift cards are NOT allowed. Non-Cash Gifts and Recognition for Volunteers or Other Non-Employees Awards or recognitions for volunteers or other individuals not employed by the College Allowable up to $50 per individual per year with a bona fide business purpose. Gift cards are NOT allowed. Non-Cash Student Recognition Awards Awards or recognitions for student contributions to the organization Allowable up to $100 per student with appropriate documentation. Gift cards are NOT allowed.

University Local Funds Description State University Local Funds Retirement and Staff Appreciation Events Retirement and Appreciation Events Not Allowable Retirement or employee appreciation events within standard per diem rates. Event Sponsorships Support for an event organized by an external third party that are essential to and support the mission of the university Allowed up to $5,000 Allowed with Approval by the Vice President for Strategic Initiatives and Public Affairs. Public Art Artwork for public spaces in University buildings   Allowed with Dean or VP approval. Office Beverages Coffee, Tea, Water or Other Beverages for Office Visitors and Guests Flowers/Plants Flowers/Plants for public events   Flowers for public events with bona fide business purpose (e.g., Commencement, Charter Day, public performances). Public/Common Area Not Allowable Office plants when located in a public/common area in order to improve the office or building appearance. Non-Employees Flowers/plants to non-employees up to $100 with a bona fide business purpose. Employee Immediate Family Flowers/plants or donations in lieu of flowers/plants up to $100 for the death of an employee’s immediate family member (i.e., parent, step-parent, spouse or child) Non-Cash Gifts and Recognition for Employees Employee Non-Cash Awards Employee recognition awards up to $50 in value per employee per year. Awards may include food, flowers, or gifts in recognition of exemplary service. Gift cards are NOT allowed. Non-Cash Gifts and Recognition for Volunteers or Other Non-Employees Awards or recognitions for volunteers or other individuals not employed by the College Allowable up to $50 per individual per year with a bona fide business purpose. Gift cards are NOT allowed. Non-Cash Student Recognition Awards Awards or recognitions for student contributions to the organization Allowable up to $100 per student with appropriate documentation. Gift cards are NOT allowed.

Implementation Timeline Roll out begins with the piloting of Chrome River (now May 2017), but no later than July 1, 2017 for all units. Training will begin in April and continue into May with additional tools, including an expenditure matrix and index look up search are being developed.

Questions?