1. Overview of Local Funds Expenditure Policy May 2017

2. 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.

3. 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.

4. 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.

5. 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)

6. 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.

7. 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.

8. 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.

9. 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

10. 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

11. Sample of Lodging City New York City, NY Washington DC
Charlottesville, VA
GSA Lodging Rate (100%) $
$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

12. 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)

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. Questions?