Part III - UNM Finance: Practical Applications

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Standard Accounting Resource Manual (SARM)

MSC 0000 00
1 University of New Mexico
Albuquerque, NM 87131

Business Purpose

The University of New Mexico, as a major public institution funded in large part by state allocations and student tuition, is held to a high level of accountability for its business practices.    Numerous constituencies have an interest in how the university spends its money.  Accordingly, every reasonable effort must be made to ensure that funds are used in a responsible and appropriate manner.  The judgment of a prudent reasonable person shall rule in the stewardship of university funds.  In cases that are questionable or not specifically addressed in the UNM Administrative Policies and Procedures Manual, advance confirmation is recommended.

In order to be able to make a determination as to whether requests for payment or reimbursement are allowable under University Administrative Policies and Procedures, there must be adequate information included with the request to enable the reviewer to determine how the payment benefits the University. This required information is referred to as the “Business Purpose”.

 All types of requests for payment including Purchase Requisitions through LoboMart, payment requests via Chrome River Invoice and Expense, Petty Cash reimbursements, and the Chrome River PCard Expense Report require a business purpose. In addition, the University Administrative Policies and Procedures Manual specifies in numerous places that payments must have a purpose that benefits the University:

 Policy 4000 “Allowable and Unallowable Expenditures”, Section 4.19 states: “Payment for any other good or service that does not represent a public purpose benefiting the University is prohibited.”

  • Policy 4030 “Travel” Section 3 “Reimbursement” states in part: “To be eligible for travel expense reimbursement other than mileage, travelers must be on official University business…”, and “A detailed description of the purpose of the travel must be included.”
  • Policy 4320 “Purchasing Goods Off Campus” Section 1 “General” states in part: “Departments must provide a detailed description of the purpose of each item purchased.”

Re-stating what is being purchased, instead of describing WHY the payment is being requested and HOW it benefits the University, is not adequate.