Authority: History: Source of Authority: 05.158 Purchase of Personal Items for Employees for Official Business Purposes Vice Chancellor for Business Affairs Effective date February 7, 2000; Updated October 1, 2008; supersedes former Administration Policy No. PUR1.60, Purchase of Personal Items for Employees for Official Business Purposes Office of State Purchasing and University Business Practices Related Links: Responsible Office: Purchasing Services; Controller s Office I. Purpose Explains university policies and procedures governing the purchase of tangible personal property items for official business use by university employees. II. Scope A. Applies to all university departments and activities. Items governed by this policy are limited to tangible personal property items purchased by the university for official business use by employees. B. Exclusions to this policy: III. Policy 1. Items purchased explicitly for retail sales. 2. Gifts to an employee. If the university purchases a personal item to primarily benefit an employee rather than to serve an official business need, such item is considered a gift to an employee. University policy prohibits the purchasing of gifts for employees except in limited instances and with special approval and funding requirements. A. Purchases of Personal Items for Individual Employees 1. Criteria for Allowable Purchases a. The university may at times purchase tangible personal property items for use by an individual employee when the primary purpose is to serve a bona 05.158 Purchase of Personal Items for Employees for Official Business Purposes Page 1 of 5
fide business need rather than primarily to benefit an employee. Personal items are allowable under this policy if all the following criteria apply: b. The items are reasonable and generally recognized as necessary for carrying out programs and activities of the university. 1) An item may be considered reasonable if the nature and cost of the item reflects action that a prudent person would have taken under circumstances prevailing at the time the decision to incur the cost was made. 2) An item may be considered necessary if helpful and appropriate for the business being conducted. An item does not have to be indispensable to be considered necessary. c. Items are documented in a way that clearly substantiates such reasonableness and necessity. d. Items must be purchased in accordance with the following: 1) University purchasing policies 2) University funding regulations. 3) Applicable state and federal laws and regulations. e. Any restrictions or rules placed on the use of the funds by donors and granting or contracting agencies. 2. Types of Allowable Purchases for Individual Employees Individual purchases may be evaluated on a case-by-case basis for the intended business use by employees. Examples of allowable purchases and their respective funding restrictions are listed below. Examples include, but are not limited to, the following: a. Personal protective equipment, as required by the Occupational Safety and Health Act of North Carolina. 1) University departments are responsible for providing personal protective equipment (such as safety glasses, safety shoes, gloves, respiratory devices, etc.) to employees exposed to work hazards that could cause injury or impairment of any part of the body. 2) Funding for personal protective equipment: Normal funding guidelines apply. 05.158 Purchase of Personal Items for Employees for Official Business Purposes Page 2 of 5
b. Uniforms or other items that the department requires an employee to wear. (Items remain university property.) 1) Employees that perform their normal work duties at various locations on the university campus during a normal workday typically use such items to identify themselves as belonging to a specific university department or program. (Example: University Police provides uniforms, guns, belts, badges, etc. to university police officers.) Such items remain university property rather than the property of an individual employee. As such, departments must strictly control the issuance and return of these items. 2) Funding for uniform-related items: Normal funding guidelines apply. c. Items that promote (or identify) the university to an outside group, but typically become an employee s personal property. 1) When the primary purpose of the expenditure is to benefit the university activity or program, but the items typically become an employee's personal property after such use, such items may be purchased subject to funding restrictions below. (Example: Shirts customized with a UNCW logo may be provided for employees to wear while assisting in student orientation activities.) 2) Allowable funding sources for promotional-type items: i. Agency funds ii. Unrestricted endowment income, such as discretionary accounts established for the chancellor or vice chancellors. iii. Other unrestricted trust funds, such as unrestricted gifts, student fees, and income available for general program enhancement. iv. Gifts, grants, or contracts that specifically provide for the purchase of such items. Prior approval from the Office of Sponsored Programs is always required for funding from contracts and grant funds. v. Enterprise funds whose revenue is derived primarily from sources other than university departments (such as Food Services, Parking). 3) Unallowable funding sources for promotional-type items: i. General funds (state appropriations) 05.158 Purchase of Personal Items for Employees for Official Business Purposes Page 3 of 5
ii. Gifts, grants, or contracts that do not specifically provide for the purchase of such gifts iii. Federal indirect costs. iv. Enterprise funds, if the sales or service is directed primarily to university departments (such as Central Stores, Printing Services, Telecommunications). d. Required Documentation If an individual receives a benefit paid by the university, the IRS may consider it income to that individual if not documented and supported as a business-related expense. Therefore, expenses for the purchase of personal items must be clearly documented as business related. B. Personal Convenience Items for Use by a University Department. Purchases of personal convenience items (such as a coffee maker, microwave, refrigerator, fan, etc.) to be used by employees within a university department or activity: 1. May not be made from state appropriated funds. 2. Are allowed from trust funds, subject to specific trust fund restrictions or allowability. 3. Are prohibited from contract and grant funds except for research purposes. (Example: A refrigerator may be purchased from contract and grant funds only if the refrigerator is used to store samples, specimens, or other items used for research.) C. Conflict of Interest IV. Procedures 1. Employees may not use the purchasing power of the university and/or the state for personal gain. 2. Any transaction that may appear to be for an individual employee's personal gain (as determined by Purchasing Services or the controller) must have approval from the respective vice chancellor before the transaction can be completed. In addition, the purpose for the transaction must be clearly documented. 05.158 Purchase of Personal Items for Employees for Official Business Purposes Page 4 of 5
A. Purchase of Personal Items for Employees Determine if the planned purchase of personal items is allowable under the guidelines in this policy. 1. For questions concerning the allowable funding for the planned purchase, contact the controller. 2. For allowable personal items, follow normal university purchasing procedures. Prepare a purchase order, check request, etc. as appropriate. Attach sufficient documentation to clearly document that the primary purpose of the purchase is to serve a bona fide business purpose. B. Review of Purchases Purchasing Services (or the controller's office, if applicable) may review purchases of personal items made via a purchase order, check request, procurement card, petty cash, etc. for funding source, compliance with university procurement policies, and appropriateness under this policy. C. Non-Compliant Purchases 1. Purchasing Services (or the controller's office, if applicable) will not approve proposed purchases that do not comply with the guidelines in this policy. 2. When a department is non-compliant with purchasing policies, Purchasing will send a memorandum to the responsible department head and to the next higher authority. 3. An employee circumventing established purchasing guidelines is subject to disciplinary action and may be held personally liable for the amount of the transaction. 4. When purchases have been made from an improper funding source, the controller (or Purchasing Services, as appropriate) will contact the department to obtain the appropriate alternate funding source for payment of the charges. If unable to obtain an alternate funding source from the department in a timely manner, the controller will either identify a funding source and notify the department or will withhold payment, whichever is applicable. Purchasing Services will not process purchase orders until the proper funding source is identified. 05.158 Purchase of Personal Items for Employees for Official Business Purposes Page 5 of 5