Financial Policy Updates: New restrictions on purchasing food and apparel, using PCards, and hosting employee recognition events.

To support the university's financial health and budgetary goals, Business Affairs has updated the Expenditure Policy and Procedures (Financial Services Manual Policy 9.0) to reduce spending and administrative costs. The changes establish new guidelines for purchasing food and apparel, using PCards, and hosting employee recognition events.

The financial policy changes are effective immediately and apply to all units and locations, including all university extensions, satellite locations, and off-site campus units, both domestic and international.

You will find below an overview of the changes, which include the addition of two new policies and updates to several existing policies under the university's Expenditure Policy and Procedures. Your business offices are tasked with understanding the financial policy changes and will continue to provide guidance on how the changes impact practices and processes in your unit. 

Overview of the new and updated policies

Two new financial policies have been added, setting new guidelines for business meals and apparel purchases.

• Policy 9.13 Business Meals establishes reasonable expense and dollar amount guidelines and limits these meals to specific, business-related situations. It also caps tipping at 20%. 
• Policy 9.21 Apparel defines when it is allowable to purchase apparel for employees and students, describes inventory requirements, and clarifies the tax treatment.

Several policies have been updated with new guidelines for PCard use, requisitions and reimbursements, employee recognition events and team building expenditures.

• Policy 9.01 Determining Purchasing Method now states that the PCard is to be used only for purchases from external (non-university) vendors. This policy has been updated to include sections of the PCard Manual and Small Dollar Direct Purchases, and a new Determining Purchase Methods Table lists expenditure categories and provides guidance on which purchasing methods are allowed, restricted, or not allowed. 
• Policy 9.10 General Expenditure Policy (previously Requisitions/Reimbursements) was renamed and links to two useful tables with guidance on Allowable Expenditure Summary by Fund Source and shows an updated Unallowable Expenditures Table. This policy has been standardized and formatted to make locating information easier.
• Policy 9.11 Employee Recognition limits the frequency of employee recognition events to no more than one per year, removes farewell events for non-retirees, and limits the costs of meals, light refreshments and beverages.  
• Policy 9.10 and Policy 9.11 both state that morale-building team activities are only allowed as a component of employee recognition.

Convocation and Award Events Best Practices have been updated with helpful and clarifying links.

New expenditure object codes

Please refer to the Expenditure Object Codes list for these updates.

• Object Code 5175 Business Meals was created for meals, light refreshments, and non-alcoholic beverages, including tax and tip and related services, incurred in connection with meetings or events focused primarily on business relations or dissemination of information. This new code consolidates and replaces discontinued object codes 5170 Business Meetings and 5550 Business Entertainment for clarity. 
• Object Code 5315 Safety Gear was added to distinguish safety gear (apparel that maintains employee safety) from ordinary clothing and apparel that is for general use.  
• Object Code 5350 Awards was added for employee recognition, length of service and retirement awards that are not processed through payroll.

These changes to the financial policies are in line with the university's financial action plan. They reflect our fiduciary responsibility as a public institution to ensure that discretion is exercised when spending public funds.

We appreciate your continued commitment to the university's financial health.

Sincerely,

John Arnold
Senior Vice President, Chief Operating and Chief Financial Officer

Garth Perry
Vice President of Finance and Chief Budget Officer
The University of Arizona