University of San Diego USD Accounts Payable Expenditure Procedures Overview July 21, 2017

Office of Accounts Payable Personnel in the Office of Accounts Payable: Frances Kuhn, Director, x2337 Susan McDaniel, AP Supervisor, x7922 Paz Tojino, AP Specialist, x7952 (A-F) Hanna Pitts, AP Specialist, x7961, (G-O) Edgar Moreno, AP Specialist, x7982, (P-Z) Office Location: Hughes 110

Procedural Highlights Emphasis on an IRS Accountable Plan Updated expenditure procedures updated September 2016.

IRS Accountable Plan BUSINESS PURPOSE must be substantiated Expenses must be accounted for within a reasonable period of time, which is 60 days

Business Purpose A Business Purpose is defined as one that supports or advances the goals, objectives and mission of the university; and adequately describes the expense as a necessary, reasonable and appropriate business expense for the university. The Business Purpose should answer five basic questions: WHO was involved? (Give the name(s) of the person(s) and their organization and/or department involved in the activity.) WHAT activity was performed? (Explain the activity or circumstance that gave rise to the expenditure.) WHY was the activity done and how did it benefit USD? (Describe the benefit to USD) WHEN did the activity occur? (Indicate the date or inclusive dates the activity took place. Specific dates are also part of the item descriptions, and dates included in the Business Purpose can be more general (the entire trip, for instance, instead of the date of each meal). WHERE did the activity take place? (Give the location of the activity: to/from destinations, restaurant name and city, or other appropriate information.)

Accountable Plan General Requirements Methods of Payment Forms & Reimbursement Methods Documentation Accountability & Approvals

Methods of Payment – One Card Used for travel and entertainment expenses including airfare, hotels, restaurants, car rentals, conference fees, food, etc. Supplies and other business expenses under $5,000 Personal payments/out-of-pocket expenses When an employee does not have a One Card, we suggest using the following forms of payment: Cash Employee’s personal credit card Check written using an employee’s personal checking/savings account Please note that employees should use the One Card whenever possible. Out-of-pocket expenses should be infrequent in nature. Employees should never pay a third party for services rendered – these payments must be processed through Accounts Payable via an invoice from the service provider.

Methods of Payment – Personal Reimbursement Personal Forms of Payment Overview Reimbursement after Trip or Event Actual Expense Method Per Diem Method The University allows the per diem method, but the Law School reimburses only for actual expenses incurred. Receipts must be provided to substantiate the actual expense. The per diem rate is used as a guideline for maximum allowances for meal expenses.

Reimbursement Methods Employees may use either Actual Expense Method or Per Diem Actual Expense Method This method is used for all One Card expense reconciliations Submitted after completion of travel Documentation must include actual receipts that provide details including business purpose USD will reimburse meals costs that are reasonable (compared to the IRS standard per diem allowance for the city in which the meal is conducted) Foreign currency must be clearly documented and converted using the foreign currency rates at www.oanda.com

Forms – Reimbursement & Payment Expense Report (employee form) For expenses exceeding $100 Approved by supervisor and budget administrator Petty Cash Voucher (employee form) For expenses less than $100 One Card Transaction Log (employee form) For the reconciliation of all One Card transactions Payment Request Form (non-employee form) Used under limited circumstances for certain suppliers Should be used for individuals – Honorariums, awards, etc. Must provide proper tax identification for payee

Forms – Expense Report Expense Report Employee/Payee Name Payment Type – select the appropriate payment AP should make Date of Expense Report - date of preparation General Description of Expense Report Funding – POETS information Approvals Form will auto calculate the amounts under Expense Report Total and Total Owed to Payee

Forms – Petty Cash Voucher Type of Request (Petty Cash Voucher) Date – preparation date Payee Name Business Purpose Funding – POETS Approvals Note: “Received by Signature” is to be signed at the Cashier’s Window.

Forms – One Card Transaction Log Cardholder Name Statement Date Detailed Expense Information Approvals

Forms – Payment Request Payment Request Form Payee Information (all information required) Requestor/Preparer information (all information required) Payment Processing and Distribution Instructions Required Tax Information Business Purpose (Payment Justification) Wire/ACH information (if applicable) Funding – POETS Approvals

Forms – Miscellaneous/Supplemental Business Purpose Form Use this form to prove the expenses were incurred, and that they were incurred in connection with a business purpose. Missing Receipt Declaration Excessive use of a Missing Receipt Declaration may revoke the privilege of providing a declaration in lieu of a receipt. Excessive use is defined as using this form more than twice per fiscal year. Please note that AP does not count MRD’s used when an itemized receipt is absolutely not available (i.e. parking lot ticket “receipts”) Mileage Form Handy form to use for calculating mileage – let the form do the work for you! Gift Form Required for all gifts given, regardless of amount.

Documentation Original Documentary Evidence Must Include Original itemized receipts that clearly state the items purchased Transaction date Name of the business establishment (name of merchant) Location Cost Form of payment used Business purpose Names of all persons involved

Accountability The employee, supervisor and budget administrator are held accountable that expenses reported on all AP forms were incurred in connection with a business purpose The employee, supervisor, and budget administrator are expected to sign all applicable AP forms.

Travel @ USD Must be authorized in advance by a supervisor Must involve the most economical methods Employees are strongly encouraged to use USD preferred travel vendors When in doubt…ask!

Travel @ USD, cont. Before your trip During your trip After your trip Processes, Procedures and Expenses During your trip Allowable Expenses, Guidelines, and Receipts Required After your trip Reconciliation using an Expense Report form or Petty Cash Voucher

Travel @ USD – before your trip You will need to make arrangements for and choices about: Airfare Lodging Meals Mileage Rental Car

Airfare Employees are encouraged to book directly through our University preferred travel service company: Global Point Travel Solutions Non-reimbursable or unallowable costs Business Class or First Class upgrades (Early Bird check-in must have a valid business reason) Outside travel agency fees > $35 Airline VIP memberships Flight insurance Cancellation fees for non-business reasons

Lodging Employees should attempt to use standard, accommodations at reasonably priced commercial class hotels and motels when making reservations The required documentation for lodging expenses is the original, itemized receipt that reflects payment for all charges incurred and a zero balance due

Meals (Travel) Meals are reimbursable based upon original itemized receipts only, up to the M&IE (meals & incidental expenses) per diem maximum for the city in which the meal is consumed. Please refer to the gsa.gov website for (meal) per diem rates, and remember that your first and last day of travel are calculated at 75% of the per diem amount you are eligible to receive If meals are included in the conference registration fee, the employee will not be reimbursed for any additional cost related to those meals Conference registration materials should be provided with the reimbursement requests for related meals

Personal Vehicles/Mileage Reimbursements Mileage Reimbursement is subject to standard IRS mileage rate When submitting expense reimbursement requests for mileage (Expense Reports, Payment Requests, Petty Cash) please include: Travel information (time, date, purpose and persons involved) Street address of your origin as USD (5998 Alcalá Park, San Diego, CA 92110) Include a Google/MapQuest estimation of mileage When calculating mileage reimbursements, USD will always be the point of origin. The IRS is very restrictive about mileage reimbursement between an employee's home and business-purpose destination. The only exception is when traveling to the airport on weekends. In that case the point of origin is the employee's home.

Rental Cars Must be the most economical for the number of business persons traveling Employees should use preferred car rental agencies (Avis, Budget, Enterprise or National) Sizes or classes of cars that are inappropriate for the number of business persons traveling will not be reimbursed Rental cars may be booked directly with agency or through USD’s preferred travel services company using a Travel & Entertainment (T&E) card Rental car personal use charges are non-reimbursable as well as any traffic fines or penalties incurred

Travel @ USD – during your trip If you are using the actual receipt method (either using the One Card or your personal credit card), remember to keep all of your itemized receipts! Make sure to document any important and relevant business purposes during your trip. If you have any meal charges on your hotel bill, make sure to request an itemized receipt.

Travel @ USD – after your trip If you used…. One Card Reconcile your expenses on the One Card Transaction Log Make sure you have all of your receipts, documentation, etc. Please include a copy of your One Card statement

Travel @ USD – after your trip, cont. If you used… Personal Payment If you used the Actual Expense Method… Make sure you have all of your receipts, documentation, etc. If expenses total less than $100, you are welcome to request Petty Cash If more than $100, please use an Expense Report Form (reimbursed via direct deposit)

Miscellaneous Items Non-travel meals Gifts Alcohol Between employees Non-employees Alcohol Travel Non-travel

Meals (non-travel) USD does not permit an employee to entertain another employee with university funds To incur a legitimate meal expense, a non-USD business associate must be present Official gatherings will be reimbursed only once every six months during a fiscal year

Gifts (to USD employees) Cash equivalents (i.e. gift cards) to employees may not exceed an aggregate $75 per employee per year and they will be included as income on a W-2. Tangible gifts (non-cash equivalents) to employees may not exceed an aggregate $75 per employee per year. Gift form required

Gifts (to non-employees) There is no minimum dollar value for gifts that are cash or cash equivalents (i.e. gift cards) and they will be included on a 1099 form. Tangible Gifts/non-cash equivalents need to qualify under the de minimus fringe benefit clause which is $75 per independent contractor and be infrequent in nature. If the tangible gift exceeds $75, the entire gift amount will be included on a 1099 form. Gift form required

Non-employee payments & Invoices Let’s now move onto non-employee payments and invoice processing

Payment Requests A Payment Request Form should be used for: Independent Contractors Prizes and awards (non-employees) Registration and Membership Dues – Charge to One Card when possible. Relocations expenses Subscriptions Etc.

Processing and Paying Invoices When Departments Receive Invoices Review and Verify the Invoice Verify that you have the original invoice Thoroughly review and verify the information contained within the invoice Annotate Invoice prior to submitting to AP with: Today’s date PO number (if applicable) The phrase Okay to Pay Dollar amount authorized to pay Complete POETS information Signature and printed name of authorizer

Supplier Invoices Required Invoice content Bill to USD Ship to USD Purchase Order Number Itemized Order Details Supplier Name Date of Invoice Remit Address of Supplier POETS (if applicable)

General Disclosure The AP expenditure procedures apply to all modes of payment used by the University including… Checks issued on all USD bank accounts ACH/Direct Deposit/Wires issued from all USD bank accounts Petty cash One Card

Director, Accounts Payable Office of the Controller Questions? Contact Information: Frances N. Kuhn, MBA Director, Accounts Payable Office of the Controller 5998 Alcalá Park, Hughes 204 San Diego, CA 92110-2492 Phone: (619) 260-2337 franceskuhn@sandiego.edu http://www.sandiego.edu/ap