Scripps College Payment and Purchasing Policy

Policy Number: 200.003.02
Revised: January 2006
Revised: 2013

Purpose

This policy outlines the definitions, authority, responsibility, procedures, and guidelines for the procurement of goods and services at Scripps College. This is a Scripps College-wide policy; however, individual departments may incorporate more rigorous guidelines. This policy has been established to control expenditures and strengthen internal control by involving senior management in the approval of various documents used to expend College funds.

Background

Scripps College does not have centralized purchasing; therefore, it recognizes the CUConnect web reporting control mechanism, which compares current expenses against the approved budget. It is the policy of Scripps College to obtain the best quality, price, and delivery of goods and services while adhering to all federal and state regulations regarding these purchases.

Policy

Accountability

Approvals: Accountability lies in the department, with each department establishing an approval process in accordance with the approval levels and limits listed below:

  • Budget supervisor of the account charged or their supervisor – up to $5,000
  • Vice President or Senior Staff responsible for the department charged – up to $25,000
  • Assistant Treasurer – up to $25,000
  • Treasurer, Controller, or President  – over $25,000

Documentation: Departments are responsible for preparing and submitting documents for payment to the Scripps Accounting Team at Financial Services with sufficient documentation and proper approval(s). Sufficient documentation includes, but is not limited to, original receipts, invoices, proof of payment, and/or proof of receipt. If the previously mentioned documents or the original documents are not included, a reason must be provided. The reason will be reviewed by Financial Services and evaluated against applicable federal and state regulations to determine whether other actions are necessary. Any form submitted with insufficient documentation with no reason for deficiency, an incorrect account number, or improper approval(s) will be returned for correction. Please note that Financial Services will return the document to the individual who approved the payment, rather than the document preparer.

Use of Personal Funds: It is not appropriate for any College employee to bear the burden of using personal funds to purchase goods or services on behalf of the College, or incur travel or entertainment expenses for College authorized business. A purchase card program is available at the College in order that employees may efficiently make business purchases without incurring any out-of-pocket expenses for transactions (see section V).

In the case of travel expenses, a travel advance may be requested one month prior to the travel date. For all other expenses, an employee may be reimbursed up to $250 if personal funds were used to purchase items used for educational purchases.

Ethics and Confidentiality: Scripps College seeks to meet its goals honestly and fairly, through superior performance, hard work, and intellectual skill. We believe that strong competition is the cornerstone of our economy and that unethical or illegal business practices have no part in this competition. Furthermore, the College is entrusted with many kinds of confidential, proprietary, and private information regarding its business dealings. It is imperative that those who have access to this type of information do not make any unauthorized disclosures of the information, either during or after employment. Please refer to the Scripps College Code of Conduct and Ethics here for further detail.

Applicability

I.          Methods of Payment

In order to process a payment, the following three methods are available:

  1. Request for Check (RFC) – used for payments to vendors or other Claremont Colleges, and reimbursements to individuals for travel expenses and miscellaneous purchases (i.e., supplies and entertainment).
  2. Travel Report – used in conjunction with reimbursements to employees following an approved business trip. Please refer to the Travel Policy for requirements on reimbursable travel expenses.
  3. Purchase Requisition – used for capital expenditures (see section VII) or when a purchase order is required by a vendor.

II.        Reimbursements to Individuals

Reimbursements to employees, other than for travel (see Travel Policy), must be approved by the immediate supervisor. This may mean that multiple signatures would be required if the employee’s supervisor is not the budget officer of the account(s) being charged. The Treasurer or Controller must approve all reimbursements to the President. Reimbursements to non-employees would follow the signature requirements listed under “Accountability.” Original receipts must accompany all requests for reimbursement.

Payments for any services provided to Scripps must be paid directly to the service provider by Scripps for tax reporting purposes; reimbursement requests for payment of services will not be processed by Financial Services.

Reimbursements to individuals for expenditures less than $25 must be made from petty cash (see section X); requests for reimbursement of less than $25 will not be processed by Financial Services. Excessive reimbursements to individuals will be referred to the Treasurer for review.

A reimbursement request must be submitted on a timely basis; normally not more than 60 days after expenses were paid or incurred. Failure to submit these expenses on a timely basis will result in the reimbursement becoming reportable as compensation on the payee’s W-2 in accordance with IRS publication 463.

III.       Check Disbursements

Financial Services pays vendor invoices, requisitions, expense reimbursements, and travel advances by check. Checks are normally processed one to two times weekly and mailed directly from Financial Services. Checks may also be available for pick-up in the Treasurer’s Office with advanced authorization and notation on the request documentation.

IV.       Meals and Entertainment

In general, unless otherwise apparent, a statement of the amount, time, place, business purpose and/or business relationship must be documented for reimbursement of expenses. Business relationship includes name, title, occupation, or other description regarding the recipient. All meals and entertainment expenses must be charged to object code 5230 on the RFC. Original receipts must be submitted for reimbursement.

V.        Purchase Cards

Purchases made on Scripps College purchase cards must be for business expenses only. No personal charges are to be made on the College purchase card. If this should happen accidentally, a personal check payable to Scripps College must be submitted with the statement of record. If out-of pocket expenses are incurred while conducting Scripps College business, reimbursement is available using the Out-Of-Pocket reporting system offered with the College purchase card. See Scripps College Purchase Card Policy for specific guidelines.

VI.       Contracts

Regardless of dollar amount, all contracts for the purchase of goods or services, or an agreement between Scripps College and a third party for any reason that “binds” the College to a set of terms and conditions, must be reviewed and approved by an officer of the College. Contracts include but are not limited to purchase orders, service agreements, leases, and letters of agreement, understanding, and intent, where there is College interest at stake or something of value is exchanged.

This policy excludes employment contracts, which are handled through Human Resources and/or the Dean of Faculty Office, and which already have defined terms and conditions.

All contracts must be signed prior to the commencement of the terms of the contract.

VII.      Capital Expenditures

Capital expenditures are assets with a useful life in excess of one year. They are recorded as assets or expenses in accordance with the College’s capitalization policy. Normally, assets with an original cost of less than $25,000 are treated as an expense. All approved capital expenditures must be reviewed and approved by the Assistant Treasurer/Director of Budgeting. It is therefore inappropriate to use College procurement cards or the reimbursement system for such expenditures as it circumvents the approval process. The Assistant Treasurer/Director of Budgeting reviews capital expenditures for appropriateness of account number and budget amount, conformity with the agreements on file, and to assist in preparation of monthly financial reports. The initials of the Assistant Treasurer/Director of Budgeting do not signify approval.

VIII.    Charges and Credits to Balance Sheet Accounts

Normally, cash disbursements of the College are charged to an expense account. The preservation of this principal is critical in order to protect the validity of the monthly financial reports. Charges to all balance sheet accounts, which include but are not limited to constriction in progress, prepaid expenses, petty cash, and advance accounts, must therefore be approved by an authorized person and have appropriate supporting documentation. Approval authorization limits are as follows:

  • Assistant Treasurer – up to $25,000
  • Treasurer, Controller, or President – over $25,000

Refunds of credits to student accounts receivable are prepared by the Student Accounts Manager and the Director of Financial Aid and approved by the Assistant Treasurer/Director of Budgeting, Controller, or Treasurer.

IX.       Journal Vouchers

Journal vouchers are used to record transfers between College accounts and to adjust or correct account balances. To the extent possible, they should be avoided. For purchases that affect multiple accounts, the charges should be reflected on the original RFC.

The College department must complete and submit a journal voucher form to Financial Services supported by sufficient documentation and proper approvals. Catering invoices should be sent to Financial Services where they will be accumulated, and one journal will be prepared each month to record the payments by the various departments. The approval limits are as follows:

  • Budget supervisor of the account charged or their supervisor – up to $5,000
  • Vice President or Senior Staff responsible for the department charged – up to $25,000
  • Assistant Treasurer – up to $25,000
  • Treasurer, Controller, or President  – over $25,000

Inter-department journal entries of $50 or less will not be booked. Intra-department entries will not normally be booked. Departments that are concerned with the historical accounting data may submit a master journal entry in July when the fiscal year books are being closed.

All journal vouchers must have the final approval of an officer of the corporation. Approval limits are as follows:

  • Assistant Controller – up to $10,000
  • Controller – up to $25,000
  • Treasurer or President – over $25,000

This policy excludes routine journal vouchers where a subsidiary ledger exists such as student billing, payroll, development, or where there is a custodial relationship such as the investment pool where the journal voucher is made to reflect current trading and income with reconciliations prepared on a periodic basis.

X.        Petty Cash

A petty cash fund is a small cash fund kept for minor or unexpected expenses. Due to the risk of theft and the labor cost of managing these funds, each Vice President will designate one petty cashier for his/her area. The person designated as the petty cashier is responsible for the disbursement and reporting of the petty cash. In the event of turnover in the petty cashier position, the petty cashier must close the funds and the department must establish a new fund and designate a new petty cashier. In an emergency, any petty cashier can provide funds for a legitimate College purpose. The charge to the department being accommodated can be made upon replacement of the fund. Payments to individuals for any type of service to the College must not be made from petty cash.