Is the Expense Allowable? Introduction

UNM Business Policy 4000 – Allowable and Unallowable Expenditures -

"This policy discusses allowable and unallowable expenditures for the procurement of supplies, materials, equipment, and contractual services, and the reimbursement of employees for business-related expenses. As a major public institution funded in part by state allocations and student tuition, the University of New Mexico is held to a high level of accountability for its business practices. All expenditures of University funds should clearly and directly support the University’s mission of teaching, research, patient care, and community service.

When potential expenditures are questionable, or not specifically addressed in this policy, advance confirmation should be sought by contacting the appropriate Financial Services accounting office (see Academic and administrative units may establish their own internal reimbursement policies that are more restrictive than this policy."

Policy 4000 lists and explains a variety of allowable and unallowable uses of University funds. It also states that other restrictions apply to the use of Contracts and Grants funds and Foundation funds.

Note: It is the responsibility of employees making purchases on behalf of UNM to become familiar with this policy.

What follows is a brief summary to assist you with some of the most common questions that arise.

University funds may not be used for the following types of expenditures:

Payment for the maintenance and upkeep of privately owned vehicles, such as insurance, fuel, tune-ups, lubricants, tires, licenses, and other repairs, even though these vehicles may be used for University business. The employee may, however, be eligible for mileage allowance reimbursement under the University's travel policy

The purchase of personal gifts, including but not limited to flowers and other gifts expressing sympathy, bereavement, or congratulations to faculty, staff, and students is prohibited, unless approved by other University published policy (for example, employee service awards).

University funds may not be used to purchase holiday decorations for University offices and buildings.

The purchase of office refreshments (including coffee makers, food and beverages) is prohibited, except when the refreshments are to be consumed primarily by guests of the University or at business meetings.

Entertainment of University employees (for example, meal expenses), other than pursuant to the University's travel policy, is prohibited. Exemptions are allowed when the function is a hospitality event that includes both University employees and invited guests of the University.

In accordance with Internal Revenue Service (IRS) regulations, all requests for reimbursement of hospitality expenditures or requests for payment of invoices must be accompanied by a list of the individuals attending the function. For functions attended by more than twenty (20) people or open to the public, a description of the function and definition of the guests invited is sufficient.

The purchase of alcoholic beverages is prohibited except when incurred in the performance of University business such as a hospitality event for guests of the University. When alcoholic beverages are served on campus, the function must be approved, in advance in writing by the President. Payment or reimbursement for the purchase of alcoholic beverages shall not be made from Instruction & General appropriated funds or Contract and Grant funds. When alcoholic beverages are served on campus, University restrictions on location and student participation must be complied with.

The purchase of insurance coverage which replicates University insurance (for example, risk management coverage of University equipment) is prohibited.

For policies on allowable and unallowable expenditures for: