Allowable Use of Funds Policy

The University at Buffalo (UB, university) is entrusted with funds from various sources. Employees who incur or approve expenses must exercise prudent judgment to ensure that the expenses are for legitimate university business and comply with the appropriate allowability criteria. Employees are responsible for ensuring the appropriate use of funds within the constraints of limited resources.

The Allowable Use of Funds Policy governs the payment of expenditures incurred or approved by employees on behalf of the university. All expenditures funded with State, University at Buffalo Foundation (UBF), and Research Foundation (RF) accounts must be appropriate, reasonable, allowable and allocable; they also must support the education, research, and public service missions of the university.

All university departments must implement a system of supervisory checks and balances to ensure expenditures always meet university interests. Expenditures paid from various funding sources are subject to specific requirements for use. Details regarding the use of State, UBF, RF Non-Sponsored, and RF Sponsored funds are found in the Allowable Use of Funds Chart. The appropriate funding source is determined by the type of expense, not by the employee’s source of payroll. Units may apply this policy more restrictively where budget and other factors are considered. Additional restrictions established at the operating unit level supersede this policy and Allowable Use of Funds Chart.

The terms and conditions of a sponsored award dictate the use of RF funds derived from that sponsored award. Each awarding mechanism (e.g., grant, contract, or cooperative agreement) is issued with guidance on the use of funding. Expenditures for sponsored activity must be allowable, reasonable, and allocable to the project.

Each sponsor provides unique terms and conditions for their award classes or sponsored programs. To ensure compliance with sponsor terms, faculty and staff must contact Sponsored Projects Services (SPS) when unsure about the terms that govern their sponsored awards. Expenditures deemed unallowable by the sponsor or an auditor will be treated under the Financial Responsibility for Sponsored Projects Policy.

Prior approval or justification may be required for the following expenditures:

• Equipment purchased during the last year of project funding
• Consumables purchased in the last 30 days of the award
• Purchases of general use supplies, equipment, or services
• Payroll cost transfer activity and retroactivity

Reimbursement requests for expenditures must be processed timely and may not be reimbursed beyond 120 days from the purchase date. Exception approval must be obtained to reimburse expenditures older than 120 days.

Expenditures in excess of the approved project budget require use of non-sponsored funds. In these instances, the RF Non-Sponsored guidelines apply.  

The maximum allowable amount for individual reimbursement is $2,500 for any single item or total aggregate cost (excluding travel). Requests in excess of this amount follow the procurement guidelines.    

When incurring expenses for the purchase of food and beverages categorized as Internal Business Meals on the Allowable Use of Funds Chart, reimbursement is limited to the per diem as determined by U.S. General Services Administration. Internal Business Meals in excess of per diem are considered an exception and require the appropriate policy exception approval.

Hosted Business Meals and Student Meals are not limited to the per diem amount, however, the expectation is that the amount will be appropriate and reasonable.

Meals provided for virtual events are subject to all requirements outlined in this policy and must be provided in the form of an actual meal, delivered to the individual’s physical location. Gift cards to purchase a meal are not allowable. Alcohol is not a permissible expense for virtual events where a meal is included.

A maximum gratuity charge of 20 percent of the pre-tax total is permitted. If per diem is applicable (Internal Business Meals), gratuity, delivery, and alcohol charges must be covered by the per diem maximum.  

Administrative, service, technology, and room rental fees charged by a venue must be itemized and are considered separate from the per diem rate. Best efforts should be made to negotiate down administrative fees or seek a venue where these fees are not charged.

Annually, the Vice President for Finance and Administration issues the Holiday Spending Reminder. All holiday celebrations must comply with the requirements detailed in the announcement.

State and RF non-sponsored funds may not be used to pay for alcoholic beverages. RF sponsored funds may be used for alcoholic beverages only if specifically approved by the sponsor.

Per person reimbursement for alcoholic beverages is restricted to the lesser of the cost of two alcoholic beverages or $20. An itemized receipt, that clearly identifies alcohol, must support alcohol reimbursements. When alcohol is provided at a hosted event, it must be served by a provider licensed to serve alcohol. Proof of use of a licensed provider is required at the time of approval; exceptions are not allowed and will not be processed when alcohol is served without a licensed provider.

Best efforts should be made to use the New York State (NYS) sales tax exemption certificates. Reimbursement for sales tax expenses will be considered on a case-by-case basis when the expense appears to be unavoidable. RF sponsored funds may not be used to cover sales tax. If sales tax is not waived, and a per diem rate is applicable, the sales tax must be covered by the per diem maximum.

University employees are responsible for the cost of their own parking at their official station. Refer to the Traveling for Business guidance for reimbursement of parking costs incurred when traveling to another campus for business purposes.

Three options to request reimbursement or payment of allowable expenses are available:

• Complete an expense reimbursement request via the appropriate form or system (State, RF, UBF), obtain the appropriate approvals, attach applicable documentation, and submit to the appropriate business office
• Complete an electronic requisition (eReq), attach the applicable documentation, and submit the transaction through the appropriate approval process
• Utilize a PCard for purchases made directly from a store or vendor
  • The State and RF PCard cannot be used for dining in restaurants

Documentation must accompany payment requests and include the following:

• Original (paper or digital) receipts or itemized invoice
  • Itemized receipts are required for any purchase that includes alcohol and for all UBF-funded reimbursements
  • Alcohol must be easily identifiable on the receipt (consider highlighting or circling)
  • Proof of licensed provider for alcohol served at hosted events
• Description of university business purpose
• Location of the event
• Names of the participants and their affiliation to UB
• Brochure, program, or agenda related to the event
• Name of the individual to be reimbursed, if appropriate
• Exception approval form, if applicable

Gift card expenses for human research subjects require the items listed above and Institutional Review Board (IRB) approval. Tax documentation (W-9) is required for all gift cards issued for $100 or more.

Special circumstances may allow for exceptions on a case-by-case basis. An exception request must be initiated at the departmental level. All policy exceptions require pre-approval from the Unit Business Officer (UBO) or the RF Operations Manager (OM) (for SPS and RF non-sponsored funds). Pre-approval must be requested with reasonable notice as established by each UBO or the OM. The approver of the exception must not have attended or have incurred, in any way, the subject expenditure. To the extent that the UBO or OM was in attendance or personally incurred the subject expenditure, the approval must be advanced to the next highest approval authority.  

All exceptions to the terms of sponsored activities require strong justification and prior approval from the sponsor. Requests must be made through SPS.

Exception requests must be documented using the Allowable Use of Funds - Exception Request Form.

Individuals making decisions concerning expenditures of university funds have a fiduciary responsibility to ensure compliance with federal, state, and local regulations while supporting the university’s mission of education, research, and public service. This policy provides strict rules around that decision making process.

This policy applies to all university faculty, staff, and student employees who make decisions regarding the use of funds for the purchase of food and beverages, human subject consideration, crowdsourcing services, clothing, registration fees, decor, appliances, and memberships.

Separate policies govern the allowable use of funds for specific purposes:

• Travel Policy, Travel Policy Charts, and Traveling for Business detail the allowable use of funds when in travel status
• Equipment purchases must be secured via the appropriate procurement guidelines and policies
• Gifts, Prizes, and Awards Policy outlines how the university recognizes members of the university community in support of our mission

Allocable

The amount of expense for goods or services which can be charged (or allocated) to a particular unit, activity, or function because the goods or services provide a commensurate benefit to that unit, activity, or function.

Allowable

An expense is allowable when it is permissible to charge it to a particular source of funds. Expenses may be deemed allowable by law or regulation; by external parties such as donors or sponsors; or by university policy.

Approver

An individual with the authority to approve a business expense or transaction.

Business Entertainment

The primary purpose of business entertainment is to further business relations; business entertainment is smaller in scale, includes a small number of people, and is fairly low cost; (e.g., business lunches or dinners; tickets to athletic, cultural, or other events).

Business Expense

Charges for goods or services, whether paid, committed, or accrued, that foster or support the ongoing mission of the university.

Business Meal

A meal attended by faculty, staff, or students, which may or may not include individuals from outside UB, at which a substantive and bona fide business discussion takes place.

Business Purpose

In support of the goals, objectives, and mission of the university.

Crowdsourcing

The practice of obtaining information or input into a task or project by enlisting the services of a large number of people.  

External Beneficiaries

Individuals who benefit from goods or services paid for with UB funds but do not have a defined affiliation with the university.  

Guest

Person invited to visit the university or take part in a function organized by the university; the guest visit must be related to a business purpose and support the mission of the university.

Hosted Event

Any event, hospitality, or social activity, held in person or virtually, organized or funded by UB.

Immediate Family

The spouse, children (son or daughter), and parents of a staff, faculty, or student employee.

Internal Beneficiaries

Individuals who benefit from a good or services paid for with UB funds while maintaining the status of faculty, staff, student, student employee, appointed volunteer, or honoraria.

Licensed Provider

Person holding a license to sell and serve alcohol, by the glass, for consumption on the premises.

Official Station

Official station is generally the address of the office to which the employee is assigned; an employee can have only one official station. The designation of official station is determined by the university in the best interest of the university and not for the convenience of the employee.

Reasonable

Those costs which a prudent person would have incurred under the circumstances prevailing at the time the decision to incur the cost was made; consider how the public would view the expense if reported in the media.

Research Foundation (RF) Funded Revenue (also called indirect costs)

Funds generated through the recovery of indirect (facilities and administrative (F&A)) costs charged on sponsored accounts, and distributed per the campus Financial Plan.

Responsible Executive

The vice president, vice provost, dean, or their designee with authority over and responsibility for the unit.

State Funds

Include State Operating, Income Fund Reimbursable (IFR), State University Tuition Reimbursable Account (SUTRA), and Dormitory Income Fund Reimbursable (DIFR) funds.

• Account for all expenditures that fall within the scope of their budgetary jurisdiction.

• Exercise reasonable judgment when making a decision to incur an expense on behalf of the university.
  
  • Refer to the Allowable Use of Funds Chart, when applicable.
• Use the appropriate tax exemption form when making a purchase.
• Complete the Allowable Use of Funds - Exception Request Form to obtain pre-approval for all exceptions to policy.

• Review and approve requests for the use of university funds in accordance with this policy.
• Verify that the expense is reasonable, allowable, and allocable; consider how the public would view the expense if reported by the media.
  • Expenditures benefitting  more than one account (including at least one RF Sponsored account), require that the cost be allocated to the accounts based on the proportional benefit to each account.

• Determine the appropriate funding source(s) for payments.
• Complete the appropriate paperwork and provide all required documentation; forward to the responsible executive or PI for approval.

• Communicate this policy to units and departments.
• Support strong unit financial stewardship through ongoing dialog regarding reasonableness and business purpose.
• Act as a consultant to unit employees seeking guidance on policy clarification or interpretation.
  
• Review, and approve as appropriate, all expenditure exceptions.

• Ensure proper documentation is included with each request.
• Investigate transactions that do not appear to be reasonable.
• Act as a consultant to university employees seeking guidance on the reasonableness of requests.
• Process transactions for payment.

• Conduct ongoing reviews of all university expenditures to maintain compliance with internal policies and external requirements.

Consult with your Unit Business Officer for initial clarification or interpretation questions.

Funding specific questions can be directed to the following subject matter experts: