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  • Open Comment Period: April 27 - May 12, 2017

    Apr 27, 2017 8:30 am by OBFS Policy Administrator

    Open Comment Period: April 27 - May 12, 2017

    Welcome!

    In this Open Comment Period:

    Section 8 – Determine the Allowability of Business Meals and Refreshments (Business Meal Tips)

    Section 7.4 – Cash Purchases

    In this Open Comment Period we present updated policy and procedure information for procurement and payment related policies.

    Please take a few moments to review this policy and submit your feedback. Thank you!

     

    Section 8 – Determine the Allowability of Business Meals and Refreshments (Business Meal Tips)

    The following policy would apply for all categories of allowable business meals.

    "Tips up to a maximum of 20% of the total cost is reimbursable."

    Section 7.4 - Cash Purchases

    Policy Statement

    Cash purchases less than $500 may be made if:

    1. the unit head determines that the best interests of the unit and the university are served;
    2. a University of Illinois System contract is not available for the purchase; and,
    3. a Procurement Card (P-Card) is not available or cannot be used to make the purchase (unless the item is restricted or prohibited from being purchased with a P-Card).

    All reimbursement requests for cash purchases must include a justification and/or documentation demonstrating the three requirements listed above.

    Cash purchases must conform to the restrictions placed on purchases from university and state employees (See Section 7.2, Restricted Items and Purchases Requiring Special Approval). Cash purchases must also conform to the same prohibitions and restrictions established for P-Card use for certain commodities and services, such as alcoholic beverages, firearms and ammunition, furniture, animals and radioactive chemicals (See Section 7.6, P-Card).

    Cash purchases cannot be artificially divided to circumvent the dollar thresholds established in this policy.

    The University of Illinois qualifies as an exempt organization and, therefore, is exempt from paying sales and use tax in certain states. See Section 18.6, Sales and Use Tax, for additional information, including sales and use tax assessed by other states.

    Individuals making authorized cash purchases for approved university business purposes must present a copy of the State of IL Sales Tax Exempt Letter to merchants and request that sales tax not be charged. If an individual fails to obtain the proper sales tax exemption at the time of the purchase, the University of Illinois reserves the right to deduct the amount of sales tax paid when reimbursing individuals for cash purchases.

    Cash purchases that exceed the dollar threshold listed or do not comply with this policy may have the reimbursement request rejected and the individual will be responsible for the payment.

    Reason for the Policy

    This policy seeks to maximize the use of contracted University of Illinois vendors or a University of Illinois issued P-Card, to minimize payment processing requirements for a purchase, before considering a cash purchase.

    Applicability of the Policy

    This policy applies to all cash purchases.

    Procedure

    To request reimbursement to an employee for a cash purchase, a Travel and Expense Management (TEM) expense report using the Purpose “Employee Misc Expense Reimbursement” must be submitted for the purchase. These reimbursements are subject to the less than $500 limit and must be accompanied by supporting documentation (such as an original receipt and justification demonstrating that a P-Card or University of Illinois contract was not available for the purchase).

    Departmental Petty Cash Fund - Individuals using personal funds for purchases of $100 or less may be reimbursed from an authorized departmental petty cash fund. The reimbursement is subject to the policies and procedures in Section 10, Cash Handling.

    Additional Resources

    Strategic Procurement – Contracts & Awards
    Section 7.6 – The University Purchasing Card (P-Card) – Purchasing Guidelines

     

    To leave feedback, please use the "Add Comment" link below. On the next screen, choose the "Sign in with my NetID" option and log in with your University credentials. Comment moderation is enabled. Your comment will not appear until approved.

    You may also submit a comment without posting to the feedback board by contacting obfspolicies@uillinois.edu.

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    Comments

    mccallen@illinois.edu May 11, 2017 8:03 am

    I'm glad to see a tipping policy; I had instigated such a policy and deducted excess off as personal expense to employee on ER.  Should include statement that tip should never be calculated on sales tax.

    jpatzin@uic.edu May 9, 2017 11:20 am

    As written the policy may have the unintended effect of more people tipping at 20% since it is a number they will remember. Additionally, suggestion to cap tips paid from state sources at 15% or 18%.  All other fund sources allowable tipping for meals 15% - 20% with a maximum cap at 20% of allowable meal expenses.

    Since meal tipping is being addressed perhaps the timing is appropriate to address reasonable and customary tipping in other areas like travel. Suggestion to provide Tips Guidelines as part of the overall travel policy.

    An example would be;

    Tips Guidelines

    The following would be considered reasonable and appropriate:

    Skycap: $2 per bag

    Porters/bellperson, etc.: $2 per bag upon check-in/check-out

    Meals: 15% – 20% (if not included in the charge).

    Taxis: customary to tip approximately/up to 15%

    Car Service: Tip is included in the negotiated rate. If using a non-contracted service, 15-20% is appropriate

    drahn@illinois.edu May 8, 2017 4:01 pm

    I'm glad to see the reference to 'departmental petty cash fund' option for items less than $100  Could you add a statement in this brief mention of petty cash that purchases must comply with the restrictions and guidelines, including using tax exemption letter to avoid sales tax?  Just one more reminder of avoiding sales tax.  Thank you.

    psmorris@illinois.edu May 2, 2017 5:16 pm

    Most cash purchases made are done so due to immediate need or from off-campus locations.  It is going to be very difficult to comply with this. If no exceptions are made we will have many outraged employees, especially those doing field work. At what point does the amount and cost of processing "paper" justifications (by Units and University Payables) outweigh the savings we realize in maximizing conracted vendors?

    jayme@uic.edu May 2, 2017 10:45 am

    Regarding Section 7.4 - Cash Purchases, this sounds like a new policy and communication of its inception should come from campus and perhaps allow a grace period before full implementation. 

    For cash purchases made off campus and off hours, it may be difficult to check whether or not there are existing contracts in place. Also, should the unit head determination that cash purchase serves the best interest of the university be in writing? If the unit head is going to be involved in the process, more reason that communication of inception of this policy should come from campus. 

    Is "best interest of the university" defined as least cost to the university? More clarification or example is needed. Thank you. 

    dyar@illinois.edu May 1, 2017 3:23 pm

    The wording on the maximum 20% tip on business meals will definitely need to be clarified.  As it stands, it is unclear whether this applies to reimbursed expenses or T-card transactions, or both.  As another commenter noted, if a tip on a T-card transaction exceeds 20% (of whatever number it's based upon - subtotal before tax or after tax), what will happen to the overage?  The overage has already been received by the restaurant/server, so will the T-card holder be penalized.  Also, will this be a "to the penny" rule such that if I'm rounding off and the overage is minimal (say, less than 50-cents), would it still be subject to "penalty"?

    japarker@uic.edu Apr 27, 2017 4:45 pm

    Does the unit head's determination need to be in writing?  How is that documented?  

    How will one know whether a UI contract is available for the purchase?

    Thanks.

    cadillma@illinois.edu Apr 27, 2017 3:17 pm

    It states that tips in excess of 20% are not reimburseable.  What if a TCard is used? Will the person have to pay back the excess?  Policy should state what will happen if a Tcard is used.  Also, all meals are not tax exempt.  Will it be 20% of the meals plus tax or 20% of the subtotal before tax.  Personnally I tip 20% on the subtotal because I do not tip on sales tax.

    As for the cash reimbursements up to $500, I support this, however, we can communicate it to our faculty and staff until we turn blue in the face and we know that it will still happen that they have a purchase that exceeds $500.  If we cannot justify it but we don't want to penalize the faculty and staff is there going to be a one time exception process?  If so, this should be communicated in policy and documented and tracked by payables so that it only happens one time.

    It would be helpful if policy stated for best practices cash purchases should be preapproved by the unit business manager/department head prior to the expenditure.  Then we could attach that form to the expense report. Then we would be able to steer the purchase to a PCard or Contract purchase, if applicable.

    dlstrong@illinois.edu Apr 27, 2017 3:16 pm
    The phrasing about the p-card part is pretty confusing - you can use cash instead of a p-card unless you can't use the p-card for the purchase you're making with cash because you can't use a p-card for it...? What's the intended outcome there?