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Controller's DivisionOUS Financial Administration Standard Operating Manual (FASOM) |
The content of this policy is current, although it has not yet been transitioned to the new Fiscal Policy format. This will be accomplished as time and resources permit.
Section 13.01 is an alphabetical grouping of criteria for use by personnel who make decisions pertaining to invoice payment. Entries under each lettered sub-section are not necessarily alphabetical. (Major groupings -- A's, B's and C's, etc. -- are alphabetical, but the entries under them may not be.)
Alumni associations may be subsidized only to the extent of providing office space and funds to maintain alumni records necessary for OUS requirements (OUS IMD 6.051(2)).
A fiduciary relationship exists between an institution and other organizations for which it manages agency funds. The Director of Business Affairs ensures that agency funds are disbursed to suppliers only when the invoice or other request for payment is signed by an authorized agency organization representative.
Institution funds may not be expended to purchase alcoholic beverages. Alcoholic beverages may be served at banquets and other special group activities conducted as part of a workshop if full cost
of such beverages is recovered through charges to the participants or sponsoring group. Income and costs must be accounted for in the appropriate fund. Use account code 62011 (Alcoholic Beverages).
The institution is responsible for compliance with all laws and Oregon Liquor Control Commission regulations, including obtaining a one-day license for serving beer and wine.
03/14/08 A policy on Non-travel Meals, Refreshments and Hospitality Expenses has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 56.100.
The Secretary of State, Division of Audits, performs auditing services for all state agencies, including state-aided institutions and agencies. Audit costs are paid from institution funds. Use account code 28003 (Audit Expense). Prior written approval from Division of Audits is required before auditing services may be performed by an outside auditing firm.
Expenses related to Athletic Department fund-raising are paid from auxiliary enterprise operating funds. Fund-raising costs include travel expenses and entertainment of donors, volunteer workers and other supporters of athletic programs.
An independent contractor may assign his rights to compensation for services rendered to OUS to a third party, e.g., a charitable organization. To comply with tax law, OUS will issue a check to the third party but records the compensation as income to the person rendering the service. The total amount paid to the individual in a calendar year will be reported by the institution to the federal government on a Form 1099.
OUS employees may also contribute to charitable organizations, but these contributions must be made through authorized payroll deductions. Two types of charitable contributions may be made through payroll deductions: contributions to Combined Fund represented organizations and contributions to institutional foundations (see FASOM 10.12C). Because these contributions are made through payroll deductions, OUS must withhold tax on the employee's gross pay.
State institutions are not required to pay business license fees.
Claims for work performed after contract completion date may not be processed until the date has been extended by a change order. An increase in contract amount must be approved by a change order before an invoice reflecting the increase can be paid.
Costs resulting from state cancellation of an order may be charged against state funds.
Selected self-supporting instructional program expenses do not require institutional executive office approval if their cost is recovered through participant fees. A participant fee may consist of
a single, basic fee or fees that are separately identified and collected.
Examples of such programs include those sponsored by the English Language Institute (ELI) and the Oregon Center For Advanced Technology Education (OCATE).
Examples of applicable program expenses include the following:
Wage certifications are required for new construction or repair contracts exceeding $25,000 (OAR 580-50-0032(5). The president of each institution shall determine the procedures to be used for award of repair and improvement contracts under $25,000 (OAR 580-050-0032(3). Award and approval by authorized institution personnel is required (OAR 580-050-0032).
Performance bonds are required for contracts involving a public improvement.
Directors of Business Affairs or their delegates may enter into contracts of varying amounts, depending on the goods or services being purchased. The president of each institution shall provide the Chancellor's office an up-to-date list of those authorized to sign contracts with amounts and types of contracts authorized.
OUS has no authority or obligation to make disbursements for voluntary contributions or donations.
Charge slips from VISA, MasterCard, American Express and similar credit organizations are acceptable as support for reimbursement claims if they are sufficiently detailed to permit a proper audit of the transaction (e.g., a charge slip is sufficiently detailed to support a claim for reimbursement of lodging expenses if it contains the same detail required by FASOM 11.06A[2]). The information must be entered on the charge slip by the lodging establishment.
When a vendor's invoice is legally assigned to a bank, payment is made directly to the assignee bank. OUS policy prohibits payment of invoices for merchandise and services on a stolen or lost credit card from an oil company.
Information technology procurement must be based on obtaining the most appropriate hardware, software and services at the most favorable cost using fair and competitive procurement practices. Gifts from vendors and products received for testing or evaluation must not influence purchase decisions. Department of Administrative Services' Information Resources Management Division's Administrative Rules 02-02 through 02-13 provide direction and guidelines regarding evaluation and acquisition of information technology.
When making disbursements to foreign countries, use the conversion rate in the Foreign Exchange column of the most recent "Wall Street Journal" to convert a foreign currency total to U.S. dollars. Enter the U.S. dollar amount on the invoice.
Institutions are responsible for ensuring that proper exchange rates are used.
Check each invoice and purchase order for discount terms and take the maximum discount offered. Take the discount only on the value of the items purchased, not on handling and transportation charges.
Sometimes vendor invoices are copies. Institution personnel authorized to approve payments should determine whether a copy replaces the original invoice in order to approve valid disbursements and avoid duplicate payments.
[a] Entertainment: Entertainment expenses are unallowable for federal indirect cost recoveries. Use account code 28610 (Entertainment) (Office of Management and Budget Circular
A-21, Section J. 15).
[b] Hosting Official Groups and Guests: Hosting expenses for official groups and guests are allowable when approved by authorized institution personnel. Use account code 28612
(Hosting Groups and Guests). (See FASOM 13.01G[2].)
03/14/08 A policy on Non-travel Meals, Refreshments and Hospitality Expenses has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 56.100.
Equipment should be rented or leased only in these instances:
[a] Data Processing Equipment: Lease or lease/purchase contracts and their supplements for data processing equipment, accessories and software must be approved in accordance with Chapter 5 of the OUS Contracting, Leasing and Licensing Manual.
[b] Other Products: Lease or lease/purchase contracts for equipment other than data processing and computer products must be approved in accordance with Chapter 8 of the OUS Contracting, Leasing and Licensing Manual.
[c] Transportation Equipment: Automobiles, boats, aircraft and other means of conveyance may be rented for use in conjunction with approved travel without a prior formal agreement. (See FASOM 11.03E.)
[d] Evaluation for Possible Purchase: Rental or lease of equipment to evaluate it for possible purchase is assumed to be incidental to purchase. The required purchase approvals apply.
[e] Property Taxes: Taxes on property held under a lease or lease/purchase contract are paid by the lessor (owner), not the lessee (institution).
Departments may wish to honor employees for outstanding achievements, length of service and retirement. It is, however, inappropriate to expend institutional funds for these purposes.
Departments may pursue other funding (e.g., Foundation) for such activities.
08/30/06 A policy on Employee Recognition Awards has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 57.200.
Employees are reimbursed for federal gasoline taxes paid when making gasoline purchases in emergency situations.
Some flower purchases are considered acceptable expenses. Flowers may be purchased for these uses:
Review all other charges carefully because they are not normally considered proper expenditures of institution funds.
Transaction Control Regulations are administered by the U.S. Department of the Treasury, Office of Foreign Assets Control. The regulations prohibit or restrict commercial and financial transactions involving certain foreign countries. These regulations prevent transactions contrary to the interests of the United States. Specific regulations are listed in the U.S. Code of Federal Regulations, Title 31, Part 505. For more detailed information and names of countries currently sanctioned, contact the Office of Foreign Assets Control, U.S. Department of the Treasury, Washington, D.C. 20220 (Ph. 202-622-2520).
Tips paid by OUS employees for services received while on travel assignments are personal expenses and cannot be reimbursed. An exception is made when reimbursement for actual meal expenses is approved prior to travel. In such cases, a gratuity of up to 15% of the meal expense may be reimbursed when supported by a receipt.
[a] Gratuity - Employee Discretion: This prohibition on reimbursing employees applies to all individual gratuities for personal services where paying the tip is optional and the amount of the tip is within the individual's discretion. For example, tips for services related to the employee's lodging or transportation or for meals covered by per diem basis may not be reimbursed.
[b] Gratuity - Service Charge: When there is a single bill for a team, organization or other group, and the restaurant adds in an amount for a "service charge,"
"gratuity," or "tip" that the employee must pay, the charge may be reimbursed. The employee should advise the restaurant to label the amount as a "service charge."
[c] Gratuity - Hosting Group Meals: A special situation arises when an OUS employee, as part of a work assignment, hosts a meal for one or more non-employee guests of the
institution or for a non-employee group. In this situation, tipping is customary, rather than discretionary, and the employee-host may be obliged to pay an appropriate gratuity, whether or not it is
included in the bill. If a gratuity is appropriate when hosting guests or a group, a tip of up to 15% of the cost of the meals may be reimbursed when included on an itemized receipt. Use account code
28612 (Hosting Groups and Guests) for the entire expense of the meals and the tip.
Note: There is no obligation to tip when the establishment adds a service charge to the bill. A tip in addition to the service charge is a personal expense that will not be
reimbursed.
03/14/08 A policy on Non-travel Meals, Refreshments and Hospitality Expenses has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 56.100.
Expenditures for luncheons, meals, snacks, beverages, etc., charged to institution FOAPALs must be approved by authorized institution personnel. An employee may, in the course of employment, serve
as host for non-employee guests of the institution or for a non-employee group, paying for expenses such as meals, refreshments or transportation. In these cases, reimbursement for the full amount of
reasonable expenditures may be authorized, subject to the limitations listed below. Reimbursements should be charged using account code 28612 (Hosting Groups and Guests).
[a] Alcoholic Beverages: Reimbursement from institution funds is not allowed (see FASOM 13.01A[3]).
[b] Gratuities: When a gratuity is usual and expected, such as for meals or taxi fares, reimbursement for a tip of up to 15% of the charge may be allowed when hosting groups or
guests (see FASOM 13.01G[1]c). Tips for alcoholic beverage service are not reimbursed.
[c] Receipts: Meals, tips and alcoholic beverages should be itemized separately on the receipt. A "tear tag" showing only the total charge is inadequate for
reimbursement. The employee should insist on an itemized receipt. If the employee is unable to obtain an itemized receipt, a written statement on or attached to the receipt that specifies expense
details and is signed by the employee is acceptable. In addition to the itemized receipt, documentation should include a list of attendees and the purpose of the event.
[d] Employee Meal: The full cost of an employee's meal may be reimbursed when hosting guests or a group, provided the meal is not in conjunction with overnight travel.
Authorized institution personnel may approve a higher rate of reimbursement than standard state rates (see FASOM 11.02E[1]).
03/14/08 A policy on Non-travel Meals, Refreshments and Hospitality Expenses has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 56.100.
State regulations require signed receipts when a request is made for reimbursement for cash payments to informants. Reimbursement without signed receipts is permitted when the following is done:
Interest is paid on overdue private vendor accounts when a claim is not paid within 45 days and the vendor presents a bill for the late payment charge. The 45-day period begins when the invoice is received. Interest may begin to accrue on the 46th day. Late payment charges are limited to 2/3 of 1% per month or 8% per year and cannot exceed the vendor's usual charge. Late payment charges are recorded with account code 28911 (Late Charge - Vendor Payments). (See ORS 293.462.)
Income that vendors acquire through interest on state agency obligations is tax exempt. ("Obligations" are notes or contracts that require deferred, interest-bearing payments, such as installment sales contracts.) Expressed contractual provisions for interest payment -- stated either as a dollar amount or percentage rate -- are required to qualify for the tax exemption.
Interest charged on such obligations should reflect this tax exemption, i.e., the interest rate should be substantially lower than the rate when interest is taxable.
A vendor who does not profit from interest payments has no incentive to offer a lower interest rate because the tax exemption has no value. In such a case, it may be beneficial to arrange for financing through a profit-making third party that will offer a lower interest rate, such as a bank or equipment investment firm. In some cases, legal counsel may be used to word contracts or make arrangements with vendors.
Generally, when an employee purchases materials or supplies and requests reimbursement, all purchases must be documented and records maintained for audit purposes.
In normal business practice, vendors issue credit memoranda for adjustments of which they have been advised. Normally the credit memo is applied against a subsequent purchase.
The Oregon Attorney General is the legal representative for OUS (OUS IMD 1.201 and ORS 180.060). Other legal services may be used when authorized by the Attorney General. Requests for legal services and arrangements with the Attorney General for securing other legal services are made through the OUS Office of Finance and Administration.
Invoices for legal services or for costs incurred in connection with court or legal actions (e.g., expert witnesses and court costs) are not paid unless approved by the Attorney General or his appointed assistant. Requests for payment must be referred to the Office of Finance and Administration for Assistant Attorney General approval.
The individual responsible for a book's safekeeping is charged for its loss. Charges cannot be made to institution funds for lost books.
Licenses, certificates or permits for some occupations are required by the state, county or city. Examples include the plumber's certificate of competency, journeyman electrician's license and apprentice electrician's permit. Such instruments are issued to individuals and confirm their qualification and authorization to work in their craft.
OUS employees are responsible for obtaining required occupational licenses, certificates or permits; for keeping them current; and for paying any fees or charges. It is not proper for a department
to pay for an employee's credentials or to reimburse the employee for obtaining them.
Departments may pay the cost of the following licenses when required by ORS 634.006 through 634.146 for employees to perform their duties:
Public applicator and public trainee licenses are valid only while working for the institution to apply pesticides on property owned or under the control of OUS. Private or other public property might be construed to be under the control of OUS when pesticides are applied as part of a research project. Pesticide consultant licenses may be used by employees for consulting duties related to their employment only; licenses may not be used for private consulting.
Membership fees or dues for governmental and professional organizations must be approved by authorized institution personnel.
Consider the following when approving payment of membership fees or dues (Payment for memberships that conflict with the following paragraphs -- except for paragraph [a]-- may be approved when supporting documentation demonstrates adequate benefit to the institution):
[a] No payment of membership fees or dues may be authorized for organizations that discriminate on the basis of race, religion, sex, national origin, age or handicap.
[b] Library invoices for minor membership fees primarily for the costs of association publications are allowable.
[c] Memberships should be institutional rather than individual, and no more than one full institutional membership should be purchased per association. When the association charges the full rate for an initial membership and lower rates for associate memberships, duplicate memberships may be paid from institution funds when approved in writing by authorized institution personnel. Institutional memberships should not remain with a staff member after termination.
[d] Dues for personal memberships are not paid from institution funds. Membership in an association devoted primarily to a profession such as law, accounting or medicine is usually personal. Individuals would probably belong regardless of their affiliation with the institution, and dues for such memberships are paid by the individual.
[e] Membership in an organization made up of public officials and administrators is generally institution-related and a benefit to the institution.
[f] Membership in an organization engaged in activities closely related to the individual's employment and made up of interested persons from government, private and commercial fields may be a benefit to the institution because of knowledge gained or publications received.
[g] Institutional membership in the local chamber of commerce is specifically authorized, but payments for memberships in civic organizations such as Rotary, Kiwanis and Lions are usually not allowable.
The mileage rate in negotiated contracts, such as for engineering or architectural services, should agree with the current approved rate. Claims for mileage at rates in excess of the current approved rate are allowable when included on invoices for repair services by outside organizations.
In certain circumstances, state funds may be used to pay for meals at an employee's official station. An example is a meal served at a convention, conference or training session in accordance
with FASOM 11.04. In general, meal charges may be paid from state funds when the following criteria apply:
>A planned, inter-departmental or inter-institutional meeting is called for a specific purpose, and
>The meal is included as part of the meeting's formal agenda.
In such situations, the meal's full cost is paid when it is outside the employee's control. When the employee can order from a menu and control the cost, reimbursement is limited to the
in-state rates for travelers listed in FASOM 11.02E.
03/14/08 A policy on Non-travel Meals, Refreshments and Hospitality Expenses has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 56.100.
Contractor requests for progress payments and accompanying architect or engineer certificates must be checked for proper signature prior to approval. Wage certifications must also accompany the first such request or any request involving work not previously covered by a wage certification. A complete list of sub-contractors should be provided with the first request of each contract as well.
A property assessment is the value placed on property for tax purposes. Treat property assessments like land acquisitions. Taxes on auxiliary enterprise property may be paid from excess XI-F(1) sinking funds or proceeds from XI-F(1) bonds. Taxes on property used for educational and general purposes may be paid from budget monies or XI-G funds allocated for land acquisition.
When business or occupation taxes or license, franchise or operating permit fees imposed on a utility company or city exceed 3% for gas utilities or 3.5% for electric or steam utilities, the utility company may, via billing, charge the excess percentage on a pro rata basis to customers, including state agencies. Institutions will pay from institution funds (OAR 860-22-040(1) and OAR 860-22-040(5)).
Refer invoices associated with land acquisition (e.g., title insurance and property purchase options) to the Controller.
Although the State of Oregon does not normally pay recording fees, it pays lease recording fees.
Filing fees associated with the vacating of streets are legitimate charges against state funds.
Expenditures for refreshments, including non-alcoholic beverages, served at OUS meetings may be charged to current fund accounts when approved by authorized institution personnel. Use account code
28611 (Refreshments - Inter-Departmental Meetings).
A "meeting" is an assembly of persons to relate information, instruct employees or conduct similar business. For information on food and beverage expenses for departmental or
institutional events or functions, see FASOM 13.01E[1] and FASOM 13.01E[3].
03/14/08 A policy on Non-travel Meals, Refreshments and Hospitality Expenses has been developed and added to the online Fiscal Policy Manual (FPM). See FPM policy number 56.100.
Persons engaged as research subjects are neither employees nor independent contractors, and payments to them should be processed as regular invoices using account code 25140 (Research Subjects).
Research subjects are not covered by SAIF. Agreements with research subjects should state clearly that SAIF coverage is not provided and that the subjects are ineligible for Worker's Compensation in the event of injury or illness.
Institutions may offer rewards to students for information leading to the arrest and conviction of individuals who tamper with fire equipment, turn in false alarms, destroy or misuse university property, and engage in similar conduct (J. McKeever, Assistant Attorney General, letter to J. Casby, 06/01/87).
When the department head involved considers a safety device a necessity, and the employee may not work without it, the expense may be paid from institution funds. If the device is not required as a condition of employment, the employee bears its cost. Safety devices and other equipment purchased by the state remain state property whether used by one or several employees.
ORS 293.321 has established a two-year limitation for presentation of claims.
A stipend is a subsistence allowance paid to a person engaged in a training or research program. Stipends may be paid in advance or arrears, depending upon terms of the agreement with the granting agency.
Normally, OUS has no responsibility for replacing a student's property that is lost or destroyed through no fault of an OUS employee. For information about possible insurance coverage, see FASOM 07.04E.
Refunds of tuition, fees, housing charges or deposits paid by a student are made to the student only. Such refunds may not be made to a third party even when evidence indicates that the third party may have provided the funds.
Exceptions may be granted by the Director of Business Affairs if circumstances warrant special treatment.
In the event of the payee's death, an institution may make a refund to the closest survivor upon receipt of Form CO-192, Affidavit to Obtain Payment Due Deceased Person (see FASOM 13.03D).
School district teachers provide student teacher supervision. The method of payment for such supervision is specified in a contract between the institution and the school district. Each contract is negotiated according to the policies and procedures outlined in Section 6 of the OUS Contract, Leasing and Licensing Manual.
State of Oregon agencies are exempt from paying federal taxes on purchases of gasoline, oil, etc. If an employee paid for a product and is seeking reimbursement, or if the product was purchased and possession taken in another state, taxes may be paid. Agencies are exempt from paying State, city or county taxes in some instances. OUS is subject to real and personal property taxes on property owned but not used for institutional purposes, such as miscellaneous rentals. State-owned property which located within an irrigation district is subject to taxation by the district.
See 13.01E[2], Equipment Lease or Rental, for information regarding personal property taxes on leased or rented equipment.
See OUS Fiscal Policy Manual section 90.100, Taxation.
Vendor invoices should not include freight charges for purchases made "F.O.B. destination" unless the purchase order indicates the vendor can add prepaid freight charges. The freight charge should be deducted from the payment if the invoice includes such a charge for which there is no prior agreement to pay.
Business-related, long-distance telephone charges may be paid from institution funds. An employee on travel status may be reimbursed for one long-distance call to a family member on the first day of travel and every second day thereafter. An employee on travel status may also be reimbursed for a long-distance call to a family member to advise the relative of a change in travel schedule or to convey a message through that relative to the employee's office or a to business associate when the office or associate cannot be reached directly during regular office hours. See FASOM 11.06A[10] for information on itemization and receipt requirements.
The fee for a visa petition to classify a non-immigrant as a temporary worker or trainee is an allowable expenditure. Payment cannot be made for any expenses the alien incurs while procuring a visa through the American Consulate.
When a private vendor repairs a State Vehicle, the vendor invoice for parts and repair must identify the vehicle. Either the vehicle license number or the Motor Pool's vehicular unit identification number may be used for identification.
Before payment is made on a contract exceeding $10,000 for repair, improvement or construction of a building or other public work, wage certificates are required in accordance with ORS 279.352 and ORS 279.354. The certificate must state the prevailing wage rates for workers in each trade or occupation employed on the project and certify that workers will be paid no less than those rates. Wage certificates are required for both contractors and subcontractors. Certificates must be signed by the contractor or subcontractor or his legal representative and they must be notarized.
Wage certifications are required in the following instances:
Note: This electronic document supersedes all previous versions
and is subject to change.
Contact: cdwebmaster@ous.edu
Last Updated: 03/14/08
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