General Accounting Office General Accounting Office James Webb BOBCATbuyers Presentation November 17, 2010
Our Current E Environment i t An American-Statesman article on November 15, 2010, expressed concern that expected shortfalls i in state revenues will t t ill lead to additional significant budget cuts in significant budget cuts in Higher Education.
When is a payment allowed???? ll d???? • NOT always simple!!! • NOT always simple!!! • Difficult to provide a listing of all allowed purchases
Two Basic R Requirements i t • Valid Business Purpose p • Source of Funding That Permits the Payment Permits the Payment
Valid Business Purpose • What is a business purpose? • Texas State University System Rules and Regulations sheds light on a g g definition: • The payment “…assists the Components in the System in C t i th S t i carrying out their educational functions promotes education in functions, promotes education in the State of Texas, and provides an important public purpose.”
Valid Business Purpose • What is the primary purpose f for the activity or transaction? ? • How does the activity or t transaction relate to the ti l t t th university’s educational mission?
Valid Business Purpose • Texas State University Mission Statement: Statement: “Texas State University-San Marcos is a public, student-centered, doctoral-granting institution dedicated to excellence in serving the educational needs of the the educational needs of the diverse population of Texas and the world beyond ” the world beyond.
Valid Business Purpose • What is the primary purpose for the activity or transaction? for the activity or transaction? • How does the activity or transaction relate to the university’s educational mission? • Who benefits? • Who benefits?
Sources of Funding • Not all sources of funding are equal! • Four main sources of Four main sources of funding cover the operations of most university departments university departments
Sources of Funding • E&G (State) • General Revenue Appropriations G l R A i ti • HEAF Appropriations • Other State Appropriations • Statutory Tuition • Is generally used to pay salaries and benefits • Generally more restrictive than “M&O” accounts • Funds that start with “1”
Sources of Funding • Designated Method (M&O) • Designated Tuition • Some fees • Other Designated Fund • Revenue Generating Accounts Revenue Generating Accounts • Service Departments • Expenses generally permissible • Expenses generally permissible with valid business purpose • Funds that start with a “2” F d th t t t ith “2”
Sources of Funding • Auxiliary • Provide services to students, faculty, staff, and the public y, , p • Revenues derived from fees or business operations business operations • Are self-supporting • Expenses generally permissible E ll i ibl with valid business purpose p p • Funds that start with a “3”
Sources of Funding • Restricted (Discretionary & Grants) • Funding given by external entities with conditions that must be fulfilled when spending the funds h di th f d • Distributions from endowments • Reach for the Stars Contributions • In addition to a valid business purpose, must meet the conditions imposed by the donor p y • Funds that start with a “4” or “8”
UPPS 03.01.03 UPPS 03.01.03 Purchase of Alcohol, Awards, Flowers, Food or Refreshments Food, or Refreshments
Highlighted Sections Highlighted Sections •Section 01.05 outlines criteria that makes criteria that makes expenses allowable expenses allowable •Generally the same y criteria as on the face of the Form AP-1 f th F AP 1
Highlighted Sections Highlighted Sections •Section 01.07 outlines S ti 01 07 tli requirements for requirements for achievement awards •Only tangible items of personal property; no personal property; no cash, gifts cards, etc. g
Highlighted Sections Highlighted Sections Section 01.10 prohibits purchases for spouses, children and other children, and other family members family members
Highlighted Sections Highlighted Sections •Section 01.12 governs S ti 01 12 any exceptions to the any exceptions to the policy •Requires Cabinet Officer or President’s Officer or President s approval pp
Highlighted Sections Highlighted Sections • Section 06 covers the procedures to process a payment p y • Purchase requisition should be used be used • The payment document should include detailed should include detailed information to support the purchase purchase
Highlighted Sections Highlighted Sections •Amount •Amount •Time Place and Time, Place, and Description •Business Purpose •Business Relationship of those involved f th i l d
What to Do When You A Are Not Sure N t S • Contact Purchasing, Accounts Payable, or General Accounting Payable, or General Accounting before committing to or authorizing the purchase authorizing the purchase • Obtain your divisional Cabinet Officer’s approval prior to Officer s approval prior to processing your payment request
What to Do When You Are Not Sure A N t S • How to Contact the General H t C t t th G l Accounting Office: gao@txstate edu gao@txstate.edu 245-2747 www.txstate.edu/gao
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