Home » Financial Policies » Policy 1202: Business Expense Management

Policy 1202: Business Expense Management

Subject Area: Procurement/Disbursement
Responsible Office: Financial Services
Sponsor: Chief Financial Officer
Originally Issued: August 1985
Revised: November 2006, February 2010, March 2011, March 2020, October 2020
Refer Questions To: Shared Services Help Desk, 773-702-5800


Purpose: To manage University resources wisely and meet governmental and third-party requirements related to University business expenses.

Policy: The University will account for or reimburse all Reasonable Business Expenses in accordance with this policy.

Note: This policy does not address cash advances for travel or other University-related business purposes. See Financial Policy 1214, Non-Salary Cash Advances.

Terminology

  1. Expense – University business purchases made using either a University issued credit card, or an individual’s personal funds with the expectation of reimbursement by the University.
  2. Reasonable Business Expense – An Expense that is ordinary, reflects a prudent decision to incur the Expense for a valid business purpose, and meets the requirements of this policy.

Principles

  1. Expense policy and practices must be consistently applied to all University business and travel activities.
  2. The University’s expense management policies and procedures are structured to satisfy IRS Accountable Plan Rules.
  3. University employees should neither profit nor suffer loss as a result of incurring Reasonable Business Expenses.

Scope of Policy

  1. This University policy applies to all faculty and staff.
  2. If Reasonable Business Expenses are charged to a sponsored program (e.g., grants or contracts), the terms of the grant or contract will also apply.
  3. Individual units (e.g., schools, departments, institutes, divisions) may establish written procedures to authorize incurrence of Expenses or impose documentation requirements that are more restrictive than the requirements outlined in this policy (e.g., a school may designate a maximum daily allowance for meals or limit reimbursement for air fare). If so, the unit is responsible for ensuring that all Expenses comply with the local procedures before approving the Expense(s) as a Reasonable Business Expense under this policy.
  4. All necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer will be reimbursed, consistent with applicable policies.
  5. Issues, disputes and matters of interpretation related to this policy and the accompanying procedures will be resolved by Financial Services.

Approvals, Reasonable Business Expenses, Documentation and Timely Reconciliation

Approvals

  1. Travel should be limited to necessary university business needs such as education, research, and critical administrative activities only. Travel for staff, below the job levels of Associate Dean, Associate Vice President, or equivalent for the President and Provost Office (“Senior Administrator”), requires the prior written approval of a unit-level Senior Administrator.
  2. Necessary travel should be booked at least 14 days in advance through the University’s preferred travel agency. Travel for staff, below the job levels of Associate Dean, Associate Vice President, or equivalent for the President and Provost Office (“Senior Administrator”), booked outside of the University’s preferred travel agency must receive prior written approval from a unit-level Senior Administrator.

Reasonable Business Expenses

  1. Financial Services maintains a list of “Reasonable Business Expense” categories, which includes associated documentation requirements for reimbursement and reconciliation purposes (e.g., transportation, lodging, meals, and other miscellaneous Expenses). The list, which may be updated from time to time, is available on the right-hand side of this page.
  2. Except with the approval of the Associate Vice President for Finance, any Expense that is not covered by an existing Reasonable Business Expense category or within another University Financial Policy will not be considered a Reasonable Business Expense for purposes of this policy. The Associate Vice President for Finance will not approve any exception for any expense included on the list of non-reimbursable expenses.
  3. Financial Services also maintains a list of expenses that are ineligible to be treated as Reasonable Business Expenses. The list, which may be updated from time to time, is available here.

 Documentation

  1. Individuals must provide all required documentation substantiating the amount, time, use and business purpose of the Expenses for which they are seeking reimbursement or are otherwise reconciling on their University issued credit card.
  2. Adequate documentation requirements are set forth under the applicable Reasonable Business Expense category section as described above and/or the Supporting Documentation Standards available here.

 Timely Reconciliation of University Credit Card Charges

  1. All expenses incurred using a University-issued credit card must be submitted via the GEMS System[1] within 30 days of incurring the expense, except in extenuating circumstances.
    1. Unreconciled GEMS Card expenses older than 90 days will result in suspension and possible termination of employee’s GEMS Card.
    2. Unreconciled GEMS Card expenses older than 120 days will be considered taxable income to the employee.
  2. The University recognizes that an employee may from time to time incur a personal expense on their University-issued GEMS card. Personal expenses incurred on the University GEMS card should be avoided and a complete reimbursement must be made by the employee to the University.

 

[1] GEMS is the University’s web-based expense management system designed to assist employees with the reimbursement of business expenses.  All employee expenses, regardless of whether they were out- of-pocket or GEMS card expenses, must be reconciled using the GEMS system, with the exception of small amounts reimbursed via Petty Cash and expenses related to a Travel Advance.