THE UNIVERSITY OF MEMPHIS OPERATING PROCEDURE
SUBJECT: Disbursement of Funds
PROCEDURE NO.: 2D:01:01J DATE: Jan. 1, 1995
SUPERSEDES PROCEDURE NO.: 2D:01:01J DATED: July 1, 1994
To secure the issuance of a check in payment for goods and services,
excluding salaries and wages, in the following situations, the proce-
dures set forth below should be followed.
A. Payment when a University Purchase Order was issued.
B. Payments when no Purchase Order was issued.
C. Payment for which no invoice is available or when the
payment must accompany the order
D. Reimbursement to individuals when no Petty Cash Fund exists
E. Disbursement Guidelines/Restrictions
F. Processing Payment
G. Other Information
PROCEDURES
A. Disbursement for Goods and Services for Which a Purchase Order
Was Issued
1. General Information
a. A computer-printed Receiving Report (please contact the
Purchasing Department for copies) will be produced for
each Purchase Order at the time the Purchase Order is
printed.
b. The Receiving Report will be sent by the Purchasing
Department to the department name designated as "ship
to" on the corresponding Purchase Order.
c. The Receiving Report will be completed by counting the
number of items received and entering the totals on the
appropriate line of the Receiving Report. Verify that
the Unit of Measure of the items received is the same as
that ordered.
d. The Receiving Report consists of an original only. For
more than one delivery of items, the department needs to
make copies of the Receiving Report. Each delivery will be
recorded on a separate copy of the Receiving Report
which will be sent to the Accounting Office.
e. The individual signing the Receiving Report is verify-
ing that the goods or services received are of the same
quality and quantity as those ordered. Upon receipt of
the signed Receiving Report, the Accounting Office is
authorized to make payment to the vendor when the in-
voice is received.
g. The Receiving Report will be submitted for purchases of
both goods and services.
2. Materials Received by Central Receiving
a. The computer-printed Receiving Report will be sent to
Central Receiving when the "ship to" designation
specifies this department. Central Receiving will sign
and date the Receiving Report at the time the goods are
received by them.
b. Central Receiving will deliver the goods to the ordering
department within one week of receipt of the items.
c. The department will complete the Receiving Report by
entering or verifying the quantity received; the
department will sign and date the completed copy of the
report.
d. Upon signing the Receiving Report the department is
certifying that the items received are equal in quality
and quantity to those ordered.
e. Central Receiving will leave the department copy of the
Receiving Report with the department.
f. The department will forward the signed copy of the
Receiving Report to the Accounting Office.
g. Invoices will NOT be routed to the department for
approval; the signed Receiving Report will be matched
with the invoice by the Accounting Office for payment.
h. Exception: On orders for goods that must be unpacked
by the vendor, Central Receiving will leave the
Receiving Report with the department. The department
will sign and date the Receiving Report after the
vendor has unpacked the items; the department will
send the signed copy to the Accounting Office.
3. Materials Received by the Department
a. The computer-printed Receiving Report will be sent to
the department designated as the "ship to" department
on the Purchase Order.
b. The department will complete the Receiving Report
certifying the quality and quantity of the items
received; sign and date the completed report.
c. The department will send the signed copy of the
Receiving Report to the Accounting Office.
d. Invoices will NOT be routed to the department for
approval. The signed Receiving Report will be matched
with the invoice for payment.
B. Disbursement for Goods and Services for Which No Purchase Order
Is Issued
1. University Operating Procedure No.: 2D:03:05A, Purchasing,
sets a dollar amount under which departments are authorized
to procure goods and services without a Purchase Order.
The department or activity budget must have adequate un-
obligated budgeted amounts.
2. Vendors should be clearly instructed to include the name of
the ordering department on their invoices.
3. Invoices for goods not purchased on a Purchase Order will
be sent to the department for approval. A rubber stamp
authorization (available from the Accounting Office) is
provided to each department. The individual signing the
invoice is verifying that the items received or services
performed are of the same quality and quantity as those
ordered and that payment is appropriate.
C. Orders Requiring Advance Payment
1. In certain instances it is necessary to make a remittance
in advance and an invoice is not available, such as dues or
publications.
2. A "Special Remittance and Order Form", The U of M Form 10 (see
appropriate office for copies of Form), should be completed
in lieu of a Purchase Requisition. The Form 10 should con-
tain an itemized list of the goods or services. If the
necessity for advance payment or the absence of an invoice
is not evident, an explanation should also be attached, such
as a copy of the subscription order form or dues schedule
from the organization.
3. The completed form should be submitted to the Accounting
Office.
D. Reimbursement to Individuals When No Established Petty Cash
Fund Exists
Under the guidelines set forth in University Operating Procedure
No.: 2D:01:01D, Petty Cash Funds, reimbursement for the purchase
of supplies can be made to individuals as follows.
1. Cash disbursement under $500 may be reimbursed by the
Bursar's Office using a "Request for Cash Reimbursement"
(please contact the Bursar's Office for copies). The "Re-
quest for Cash Reimbursement" must be filled out completely,
including the account number and authorizing signature.
Original receipts must be attached. The form may then be
taken to any cashier window on the first floor of the Admin-
istration Building for reimbursement.
2. Cash disbursements under $500 otherwise covered by University
Operating Procedure No.: 2D:01:01D may be reimbursed by the
Accounting Office with a check made to the individual. The
"Request for Cash Reimbursement" form is again used and
original receipts must be attached.
E. Disbursement Guidelines/Restrictions
1. No disbursement of University funds (unrestricted, re-
stricted, or agency) will be made for expenditures or
reimbursements prohibited by the "Tennessee Civil Rights
Act of 1990".
a. The "Tennessee Civil Rights Act of 1990," which was
Public Chapter No. 1053, includes the following among
its provisions.
(1) No state funds shall be expended in connection
with a meeting or other activity held at an
establishment or facility which does not afford
full membership rights and privileges to a person
because of sex, race, creed, color, religion,
ancestry, national origin or disability.
(2) No state official, employee or agent shall be
reimbursed for dues or other expenses incurred at
an establishment or facility which does not afford
full membership rights and privileges to a person
because of sex, race, creed, color, religion,
ancestry, national origin or disability.
2. Gifts for University employees will not be purchased from
any source of University funds; exceptions may be approved
only by the President.
3. Gifts of nominal value for non-University employees may be
purchased when justified, such as for speakers, donors, or
other public relations purposes. If a number of gifts are
being purchased, the individual value must be $25 or less;
if only one gift is being purchased, the value must be $100
or less. Exceptions may be approved only by the President.
4. Christmas cards, holiday greetings, and similar materials
may be purchased only from private, non-State funds; this
would usually permit purchase only from Restricted gift
accounts.
5. The purchase of flowers due to the death or serious medical
condition of an employee or immediate family member is
provided in University Operating Procedure No.: 2D:05:02A.
The purchase of flowers for other individuals from any
University source of funds will be made only by the
Development Office or the Intercollegiate Athletics Tiger
Clubs. Reasonable and appropriate floral arrangements may
be purchased as decorations at formal functions. All
invoices for the payment of flowers should include a nota-
tion on the purposes of the flowers.
6. Receptions and dinners for retiring or terminating employees
may be provided limited support. For receptions, institu-
tional funds may be used not to exceed $3 per guest
anticipated; for dinners, only the cost of meals for the
employee being honored and his/her personal guests may be
paid from institutional funds. A gift for the employee may
be purchased only from private, non-State funds; only if
the individual has been employed by the University for more
than five years; and the amount may not exceed $400.
7. Postage stamp purchases may be reimbursed by following the
procedure set forth in Section D. A receipt must be ob-
tained from the Postmaster.
8. No disbursement of University funds (unrestricted, re-
stricted or agency) will be made for alcoholic beverages.
9. Purchases for coffee pots, plants and decorative items for
the office are not normally considered University expense.
Requests for exceptions should be routed through your
Dean/Director or higher authority.
10. Expenses relative to the Certified Professional Secretary
program will not be paid from any University funds. This
includes processing fees, examination fees, study guides,
and similar costs.
11. University parking fees and permits for employees will not
be paid from any University funds. This applies to regular
or temporary faculty and staff, part-time and student staff,
and any other individuals employed by the University.
F. Processing Payment
1. The University will make payments for materials and
services from outside sources upon receipt of the vendor's
original itemized invoice properly approved as set forth in
this procedure. Payment will not be made on statements
except in instances of daily or frequent deliveries where
each amount appearing on the statement is supported by an
itemized delivery ticket attached thereto. All statements
received directly by departments should be sent to the
Accounting Office for follow-up on unpaid items.
2. Invoices will not be approved for payment prior to receipt
of the materials or services.
3. Vendors expect the University to make prompt payment for
its obligations. Upon receipt of materials or services,
departments should submit Receiving Reports or approved
invoices within two working days. In most cases trade
practices require payment for partial orders. Departments
should notify the Accounting Office if an invoice is being
held for any reason.
The "Prompt Pay Act of 1985" requires that the University
"...pay for each complete delivered item of property or
service...within forty-five days..." A penalty of 1 1/2%
per month is provided by the Act. Invoices or Receiving
Reports should be processed timely to avoid penalties. Any
problem with vendors which will delay payment should be
reported to the Purchasing Department promptly, preferably
in writing.
4. Invoices carrying cash discount terms should receive
special processing if necessary to permit payment within
the discount period.
5. Checks will normally be mailed directly by he Accounting
Office. Any special handling desired by the departments
should be clearly noted on the Receiving Report or the
approved invoice. The Accounting Office will enclose forms
with checks if requested by the initiating department.
Checks will be issued within three days after receipt of
the request. This schedule is based on normal operating
conditions and is subject to change in the event of large
volume or unexpected delays.
G. General Information
1. For more specific requirements to secure disbursements in
the following situations, refer to the University Operating
Procedure listed below.
a. Purchase of Meals . . . . . . . . . . . . . . 2D:01:01O
b. Death or Serious Illness of Employees and/or Members
of Their Immediate Families (Flowers). . . . 2D:05:02A
c. Agreements for Personal, Professional, and
Consultant Services. . . . . . . . . . . . . 2D:03:07B
d. General Travel Procedures . . . . . . . . . . 2D:01:01M
2. Department and activity heads submitting expenditures for
payments are responsible for compliance with this procedure.
Any item submitted for disbursement may be questioned or
referred to higher authorities by the Accounting Office.
Special procedures may also be established for unusual situ-
ations or activities generating a large volume of disburse-
ment transactions.