Welcome to "The Daily Dilemma!"
We hope this new feature will be helpful and provide some guidance for the
ethical or financial 'daily dilemmas' you may face in your position. Many
of us have been asked to do something that we are not sure is the right thing
to do. We hope to provide some sample situations (all anonymous) that may
give you the insight you need to make a decision. Please remember that these
are suggestions, an d that if you have any doubts or any additional questions,
please feel free to contact our office. One of our services is to provide
consultation and advice.
A faculty member has endowed chair discretionary funds. He needed to hire a graduate student yesterday, and wants to pay the graduate student with personal funds, and get reimbursed when the student is put on payroll retroactively. The faculty member feels that since he has the discretionary funds, he should be able to use the money how he wants. Is this ok?
Signed,
Trying to Help
Dear Trying to Help,
Although these funds are “discretionary,” these funds are still the property of the UC Regents and fall under university policies and guidelines. As such, there are a number of issues surrounding payroll and hiring an employee, regardless of the funding source.
It is not ok to pay an employee with personal funds prior to the employee being hired in the Payroll Personnel System (PPS) for a number of reasons:
1) Upon hiring an employee for the university, certain forms are required to be completed prior to employment, such as the I-9, and the State Oath and Patent Agreement. The department and the university can be held liable if these forms are not completed.
2) Liability – What would happen if the employee is injured during the time he/she is not in the official payroll system? The employee would not be covered under the University’s Workers’ Compensation policy. The faculty member would then be liable for any injuries resulting to the employee or even potentially a 3rd party.
3) Benefits – If the graduate student is eligible for Graduate Student Fee Remission, this benefit would not be calculated correctly, resulting in the student having to pay all of their fees. In addition, if a graduate student is going to work over 50%, they will need to have an exception approved by the department.
4) Tax Reporting – The appropriate amount of taxes may not be withheld and/or reported.
5) Funding Source – What if the student has work study funds? His/her efforts would not be reported correctly under the federal work study program and could jeopardize the program for the entire campus.
If in fact, the professor needs to hire someone before the disbursement of money (such as a contract, grant, or other funds that won’t be disbursed right away), the professor can use the OR Form 203, “Request for Approval to Spend Funds” (RAS). In addition, certain gift funds may only be distributed once or twice a year, so depending on the time of year, the professor could be waiting a long time for reimbursement.
PHONE CALLS
Dear Daily Dilemma,
In reviewing the department’s phone bill, I noticed a couple of the employees have an excessive amount of toll calls. I mentioned the need to reimburse the university for their personal calls. That was 2 months ago, and they have not submitted a reimbursement. What can I do?
Signed,
Taking its Toll
Dear Taking its Toll,
The department telephones are a University resource, and fall under the Electronic Communications Policy, allowing for incidental use. However, long distance toll calls for personal business do not fall under incidental use, and the University should be reimbursed by employees for personal calls.
In this situation, there are a couple of options. One, you could remind the employees of their need to reimburse the university for their personal calls and encourage the staff to use a personal cell phone, or a long distance calling card if they need to continue making these types of calls. In addition, if the personal long distance calls continue, you could work with Communications Services to block out-going long distance calls from those phones.
If they continue to choose not to reimburse the university, then the amount needed to cover the costs could be considered compensation and reported on their W-2 at the end of the year.
Productivity should also be a concern if the employees are spending work time on the phone. Employees should utilize their break time or their lunch period for personal calls.
CATERING/FOOD
Dear Daily Dilemma,
My department is recognizing two employees for their length of service,
and the department chair would like to have light refreshments using department
funds. Can I use our petty cash fund to buy food at Costco?
Signed,
Hungry and Waiting
Dear Hungry and Waiting,
Your question involves several issues:
1) Having food at an office meeting
2) Using petty cash to purchase food
3) Purchasing food from Costco
Issue #1:
If food is provided at an office meeting, the meeting/food for the event
needs to be consistent with the UC Entertainment
policy. In this case, policy does allow light refreshments for recognition
of service. A Payment
Request for Business Meetings and Entertainment needs to be completed
and approved in accordance with the policy.
Issue #2:
It is never appropriate to use petty cash funds to purchase food. Petty
cash funds are meant to provide for the purchase of certain low value items
other than food. If an employee uses their own
funds to purchase food and is approved for reimburs ement, a Payment
Request for Business Meetings and Entertainment should be used. (Please
refer to the campus Petty
Cash Policy for additional information.)
Issue #3:
The Campus
Food Policy states that University Center (UCEN) Catering, Residential
Dining Special Events Catering, or the Faculty Club are the primary sources
for al l food provided on campus. However, if none of the campus caterers
are able to provide service for your event, the UCEN Catering Manager has
a list of approved vendors that you may select as an alternate provider.
These vendors have been approved becaus e they have the appropriate food
and health permits and have the correct amount of liability insurance according
to Business Services. Using a vendor not on the approved list subjects the
University to liability and puts the department and employees at r isk -
for among other things, accidental food poisoning!
The Campus Food Policy does allow the following:
"Individuals may provide light refreshments for meetings or have
potlucks for department gatherings only when basic sanitary practices and
campus and industry health standards are met. The Health and Safety Code
may be obtained from Environmental Health and Safety."
Although using Costco can sometimes result in a financial savings to a department,
there are other costs involved. Think about the time it takes for an employee
to go to Costco and return to work, approximately 30 minutes to one hour.
Everyone's time is valuable - is the department really saving money by
not using a campus caterer? Second, what if an employee is injured during
the trip to Costco, or gets into an accident? Just think about these additional
costs/risks when making the decision to use ou tside caterers or to buy the
food from a vendor such as Costco. Remember, if a department does choose
to buy from Costco, the employee is reimbursed via a Miscellaneous Form -5,
as described above in Issue #2.
CONFERENCES
Dear Daily Dilemma,
Our department plans to host a conference at a nearby hotel. We expect
the income from the conference registration fees to be approximately $15,000.
How and where should we record this income - as well as the expenses incurred
for setting up the conference?
Signed: Too Much Money
Dear Too Much Money,
Accounting Services & Controls recommends that for any conference expecting
revenue over $10,000, the department should set up a new income account if
they do not already have one. This can be done by contacting General Accounting
at x2372. If the department currently has an income account, they may use
that account to track the conference revenues and expenses, unless the conference
is expected to be very large; then the department may elect to set up another
income account. General Accounting can provide guidance and assistance in
this area.
The importance of establishing a new account is to ensure proper tracking
and recording the sources and uses of funds - the main principle of fund
accounting!
As a reminder, some other things to think about when hosting a conference:
1. Credit card payments for registration fees. If your department wishes
to accept payments using credit cards, you must receive prior approval from
the Chancellor. Please contact General Accounting at x8913. There is a
very formal process to getting the approval and General Accounting will
tell you how to get started.
2. Storing the money received. If you will be receiving cash and/or checks
for the conference, please refer to Business and Finance Bulletin BUS-49
regarding Cash. This policy includes guidelines for handling, receiving,
and storing cash in your department.
3. Preparing a budget. This is extremely important. A budget will help
you determine what your costs are going to be, how much to charge for the
registration fee, and can be a very valuable planning tool.
PARKING
Dear Daily Dilemma,
We had a visitor come to campus who is a large donor to our department programs.
While attending a meeting on campus, he received a parking citation for
not having a permit. What should we do?
Signed,
Parking Problem
Dear Parking Problem,
It is the sole responsibility of each individual choosing to park on campus
to obtain a parking permit. If a visitor chooses to park on campus without
obtaining a permit, this is considered a violation of the California Vehicle
Code, Section 21113 (a), w hich confers upon the University of California
authority to regulate parking on its campus.
The Citation Appeal process is explained on the back of each citation.
The Citation Appeal form may be found on the Parking Services Web site at:
http://www.tps.ucsb.edu.
Parking Services offers a program to departments allowing them to set up
an account for recharge of Complementary Parking permits for guests visiting
campus. Once the department sets up an account with the Parking Services
Events Coordinator, the departm ent is asked for a list of staff authorized
to order Complementary Permits by phone or E-mail. Once this process is
complete, the department representative may request Complimentary Permits
for visiting guests. A Courtesy Parking permit is recharged bac k to the
department at the cost of the daily parking rate. When a department designate
orders a Complimentary Permit for a guest and the permit is not redeemed,
the department will not be charged.
Once a guest arrives to campus, the visitor provides the Kiosk Attendant
with their name and the department they wish to visit. The Kiosk Attendant
will issue the appropriate Courtesy Parking permit with lot-specific area
designations. The attendant will provid a map with detailed directions
to their destination and information about where their permit is valid.
Visitors may also arrange to purchase permits that are valid for extended
stays. Please contact Traci Kellogg, Events and Outreach Coordinator for
assistance. Traci can be reached by phone at 805-893-5389, or by E-mail
at traci.kellogg@park.ucsb.edu.
PURCHASING
Dear Daily Dilemma,
I am the purchasing assistant in my department. One of the faculty members
has asked me to purchase a popular software program from the UCSB Software
Depot. The software is going to be for personal use and the faculty member
plans to pay back the depart ment. Is this ok?
Signed: Trying to Get the Best Deal
Dear Trying to Get the Best Deal,
There are several issues you want to think about before making the software
purchase.
1. Purchasing Policy #5330 (Currently Under Review) states: "University
credit, purchasing power, and facilities may not be used to purchase goods
or services for non-University purposes." By making personal purchases,
the University contract for the software prices is at risk.
2. If you make the purchase for the staff member, consider how are you going
to get the money back to reimburse the department? What if the person leaves?
3. Confirm with the staff member that this software will not be used for
ANY work-related purpose. If some work will be done using the software,
then this purchase would be ok and the staff member would not be required
to reimburse the department.
In all cases, you want to be able to explain the Purchasing policy. In
our experience, just saying "NO" creates more aggravation and frustration.
Many times there is a lack of knowledge that a specific policy exists and
the situation just needs to be ex plained.
TRAVEL
Dear Daily Dilemma,
I am the financial coordinator in an academic department. A graduate student
recently attended a conference within the US. Upon return, she submitted
her travel voucher worksheet requesting the full amount of allowed expenses
even though she spent significantly less as evidenced by her receipts. The
full reimbursement amount was supported by the Principal Investigator (P.I),
who is my supervisor. What should I do?
Signed: Worried About My Job
Dear Worried,
This is a dilemma! However you do have some options. The University Travel
Policy (Business and Finance Bulletin G-28) states that reimbursement should
be for actual costs only. This policy follows IRS regulations, limiting
reimbursements to actual expenditures.
When meeting with the P.I., be prepared to show him/her the policy and
explain why you are unable to reimburse the student for the full amount.
If you are concerned about talking with the P.I., consider talking to your
department MSO or department chair. You can also contact the Travel unit
in Accounting, or our office if you need more guidance in understanding and
interpreting the policy.
To preclude this type of situation in the future, here are some additional
options:
1. Explain to the traveler prior to the trip, the reimbursement policy and
the receipt documentation needed. If your department has an email distribution
list, perhaps send out the policy information to all faculty and staff.
2. Provide travelers with a "Traveler Worksheet" which gives the traveler
an area to record their daily meal expenditures and explains the meals and
incidental expenses rule. (The Travel Unit in Accounting has samples of
"Traveler Worksheets.")
3. If the traveler still claims the full amount, and certifies or signs
that the voucher is an accurate recording of expenses, then the responsibility
lies with the traveler and authorizing signature.
