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Sensitive Expenditure Procedure and Guidelines

Category Finance
Type Procedure
Approved by University Council, 13 October 2015
Date Procedure Took Effect 14 October 2015
Last Approved Revision 13 July 2016
Sponsor Chief Financial Officer
Responsible Officer Chief Financial Officer
Review Date 14 October 2017

Purpose

The purpose of these procedures is to provide guidance to staff on the application of the University’s Sensitive Expenditure Policy. They should be read in conjunction with that Policy.

Policy Content


1. Approval of Sensitive Expenditure

(a) Approval of sensitive expenditure should be given

  • only when the person approving the expenditure is satisfied that the principles in the Sensitive Expenditure Policy have been adequately met;
  • before the expenditure is incurred, wherever practical;
  • only when an approved budget and delegated authority exist;
  • by a person senior to the person who will benefit or who might be perceived to benefit from the sensitive expenditure.

(b) In the case of the Vice-Chancellor, final approval shall be given by the Chancellor, and in the case of the Chancellor final approval shall be given by the Pro-Chancellor. The expenditure of the Pro-Chancellor will be approved by the Chief Operating Officer who will consult with the Chancellor.

(c) If staff are unsure about the escalation of approvals they should contact the Compliance Analyst in Financial Services.

2. Claims and supporting documentation

(a) Claims and supporting documentation should be of the same type and standard outlined in the Financial Delegations Policy except that greater detail should be provided where the documentation does not fully explain why the sensitive expenditure was necessary. It is a requirement for sensitive expenditure that supporting documentation is original. Copies of original documents or credit card receipt slips or credit card statements are not acceptable evidence.

3. Use of University-owned Business units

(a) The Vice-Chancellor has directed that University-owned business units must be used wherever possible. This includes, but is not limited to, the University Union and UniPrint. Therefore any goods or services covered by the Sensitive Expenditure Policy will be subject to this directive.

4. Expenditure Covered by these Procedures

(a) The following areas of sensitive expenditure are covered by these procedures:

  1. Travel and accommodation expenditure
  2. Entertainment and hospitality expenditure
  3. Meals and alcohol
  4. Cafe meetings
  5. Recruitment dinners
  6. Sale of surplus assets to staff
  7. Loyalty reward scheme benefits
  8. Private use of University assets
  9. Clothing and grooming
  10. Care of dependants
  11. Farewells and retirements
  12. Staff recognition, team building, retreats and Christmas functions
  13. Miscellaneous staff support and welfare expenditure
  14. Donations
  15. Koha and Pacific Gifting
  16. Giving Gifts

5. Travel and accommodation expenditure

(a) The University’s policy and procedures for travel and accommodation expenditure can be found at:

  1. Travel and Travel Related Costs Policy
  2. Travel Planning Procedures

6. Entertainment and hospitality expenditure

(a) Entertainment is defined as business expenditure usually for the purposes of:

  1. building relationships;
  2. representation of the organisation;
  3. reciprocity of hospitality; or
  4. recognition of significant business achievement;
  5. celebration of events such as Christmas and retirement functions

(b) Hospitality can cover a range of expenditure from tea, coffee, and biscuits served at meetings to fully catered events.

(c) The principles of a justified business purpose, and moderate and conservative expenditure are particularly relevant.

7. Meals and alcohol

(a) Meals must have a clear business purpose and be moderately priced. As a guide they should not exceed $60 per head for dinner and $40 per head for lunch. Where possible the venue for meals should be in University owned and catered premises, such as the Staff Club.

(b) Expenditure on alcohol should be considered an infrequent event and normally only be purchased to accompany a meal. Alcohol sufficient to provide one standard drink per participant is acceptable. The alcohol provided should be mid-range and must not include spirits.

(c) The University should only pay for the meals and alcohol of partners where the presence of a partner is of benefit to the University, such as for cultural reasons.

(d) The cost of staff travel from and to home for a University function is not a business expense so will not be paid by the University.

8. Café meetings

(a) Café meetings between staff (or between staff and students) will not be funded by the University. If staff choose to meet in a café the expense is personal, not business related. Café meetings with external guests will be paid by the University where it is appropriate to do so. In such cases, it is a requirement that University-owned cafés are used wherever possible.

9. Recruitment dinners

(a) Dinners with staff and prospective candidates are acceptable for the recruitment of academic or executive positions. Staff attendance should normally be limited to four with any exceptions to be prior approved by the relevant Pro-Vice-Chancellor.

(b) Dinners with staff and prospective candidates for the recruitment of all other general staff positions are not acceptable except in exceptional circumstances, in which case the approval of one of the Vice-Chancellor, a Deputy Vice-Chancellor, a Pro-Vice-Chancellor or the Chief Operating Officer is required.

10. Sale of surplus assets to staff

(a) Assets that are replaced by the University remain the property of the University until such time as they are sold, or disposed of if they have no realisable value.

(b) The sale of assets will be on the open market wherever possible. The University will not sell assets to staff or others at a value that is less than can be realised by sale on the open market. If the market value of an asset is not able to be easily assessed, the Chief Operating Officer must be consulted for a value to be agreed. Written advice from the Chief Operating Officer will be provided to Financial Services attached to the asset disposal form. All motor vehicles must be disposed of via auction at Turners.

(c) Assets with no realisable value should be disposed of in the most appropriate manner, which may include gifting to staff, but only where an independent person provides written advice to the University that the asset being disposed of has no realisable value. The staff member disposing of the asset is responsible for obtaining the written advice and providing a copy to Financial Services attached to the asset disposal form.

11. Loyalty reward scheme benefits

(a) Loyalty reward schemes provide a benefit to the customer for continuing to use a particular supplier of goods or services. Generally, the rewards tend to be given to the named individual who orders or purchases the goods or services, regardless of who has paid for them.

(b) In such cases it is impractical to control the use of these rewards, but as far as is practicable, staff should use loyalty rewards for the benefit of the University or for business-related activity.

12. Private use of University assets

(a) Any physical item owned, leased, or borrowed by the University is considered an asset for the purpose of this section. This includes photocopiers, phones, digital devices, internet access, and stationery. As a general rule, staff should not use University assets for personal reasons unless approval is obtained from the manager of the department responsible for the asset and a reasonable charge is made that recovers at least the direct costs of that usage. However, it is recognised that it is sometimes impossible to avoid a personal element of use during business use of an asset. When this occurs it should be clear that the personal use was secondary to the use for business purposes and that no additional cost was incurred by the University as a result of the personal use. It is the responsibility of the staff member to provide this evidence if requested.

13. Clothing and grooming

(a) Other than uniforms and health and safety-related clothing, staff should not be clothed or groomed at the University’s expense when they are engaged in a normal business activity (whether in New Zealand or overseas), except when allowed for under an employment agreement.

14. Care of dependants

(a) Payments for the care of dependants, other than under employment agreements, are not permitted unless there is a clear business purpose, and prior approval is received from the Vice-Chancellor or the Director of Human Resources.

15. Farewell and retirement functions

(a) Expenditure on farewell and retirement functions for staff members will only be at the University’s expense if they are formal and organised by a University department and are moderate and conservative.

(b) The time of day, size and scale of the function should be commensurate with the staff member’s length of service and role. It is not expected that formal farewell functions paid by the University will be held for staff with less than five years of service.

(c) The first option for a venue for farewell and retirement functions should be on campus. If the function must be held off-campus due to unavailability of a suitable on campus venue, then the choice of venue must be appropriate and moderately priced.

(d) Approval must be gained before the event from the person holding delegated authority to expend the budget being charged. This approval can be granted even when the person holding the delegated authority could be a beneficiary, or a perceived beneficiary.

16. Staff recognition, team building, retreats and Christmas functions

(a) Approval must be gained before the event from the person holding delegated authority to expend the budget being charged. If the person holding the delegated authority could be a beneficiary, or a perceived beneficiary, of the expenditure then the one-up principle for sign-off must apply. When the person holding the delegated authority or the person granting one-up approval is an invited attendee, rather than the organiser or host they can still grant approval.

(b) Low value events, such as morning teas, afternoon teas, and staff/student events can be approved by a Head of Department or Service Division provided they aren’t frequent and they follow the principles set out in the Sensitive Expenditure Policy. This applies even when the Head of Department or Service Division are also in attendance at the event.

(c) If entertainment, hospitality, meals or alcohol are included in the cost of this activity, then the principles for those categories of expenditure, found elsewhere in these procedures, and in other approved University Policies and Procedures, should apply.

(d) The University has an organisation wide Graduation function and as such if departments wish to hold their own function these should be modest and reasonably priced.

17. Miscellaneous staff support and welfare expenditure

(a) There is a wide variety of expenditure that can fall into this category of sensitive expenditure, and can include club and professional memberships, motor vehicles use, private telephone reimbursements, and access to papers, magazines and periodicals.

(b) The following principles shall apply to this category of expenditure:

  1. Payments and rewards in lieu of, or additional to, a staff member’s usual periodic remuneration can be made where they are provided for in the staff member’s employment agreement.
  2. Where a payment or reward is not provided for in a staff member’s employment agreement, prior approval must be obtained from the Vice-Chancellor or the Director of Human Resources before a payment can be made or a reward provided.
  3. Both Financial Services and Human Resources must be contacted prior to seeking approval to ensure that the payment or reward is appropriate and consistent with similar circumstances and that any taxation implications are clearly understood and appropriately addressed.

18. Donations

(a) A donation is a payment (in money or by way of goods or services) made voluntarily and without expectation of receiving goods or services in return.

(b) All donations must be pre-approved by the Vice-Chancellor.

19. Koha and Pacific Gifting

(a) The University has separate policies that covers Koha and Pacific Gifting payments:

  1. Koha Payments Policy and Procedure
  2. Pacific Gifting Policy, Procedure and Guidelines

20. Giving Gifts

(a) The giving of gifts where the University makes a contribution in addition to funds raised through contributions from departmental staff is only acceptable in the following circumstances, unless prior approval is obtained from the Vice-Chancellor.

  1. Farewells and retirements for staff with more than five years of service to the University.
  2. The bereavement of a close family member of a staff member;
  3. On the occasion of a staff member’s serious illness or accident;
  4. Recognition and thanks for unpaid work given by non-staff members for the benefit of the University;
  5. A meeting, event or ceremony where the giving or exchanging of gifts is customary, other than Koha or Pacific Gifts which is covered elsewhere in these procedures and is subject to a separate policy.

(b) Any gifts up to and including $100 must be pre-approved by the head of the Division responsible for the cost.

(c) Gifts for purposes not included in section 20 (a) or for a value above $100 will require the approval of the Vice-Chancellor. This function has been delegated to the Chief Financial Officer to review in the first instance.

(d) Only one gift from the University should be purchased and arranged by the line manager of the individual receiving the gift.

(e) Under no circumstances can gifts given by the University be exchanged for cash by the recipient.

(f) Gifts for other events (including births, engagements, weddings, birthdays, Easter and Christmas) will not be paid for by the University.

21. Compliance

(a) Transactions are monitored regularly by Financial Services for compliance with the Sensitive Expenditure Policy and these procedures.

(b) Breaches of the Sensitive Expenditure Policy and associated procedures will be reported to the Vice-Chancellor and may result in disciplinary action.

(c) The Vice-Chancellor has the authority to disallow any expenditure considered to be unreasonable.

Related Policies, Procedures and Forms

Contact for Further Information

If you have any queries regarding the content of this policy or need further clarification, contact the Chief Financial Officer on cfo@otago.ac.nz