November 15, 2018
Expense Business Purpose and Approvals (Expenditures)
All university expenses must be considered reasonable in terms of price, purpose and necessity and must be in the best interest of the university. Therefore, each university reimbursement and payment request must be supported by a written business purpose, regardless of the item, type of service, amount or form of payment.
Written business purposes for any expenses charged to a sponsored project must clearly articulate the benefit to the project. For example, the business purpose should relate the expense to a particular research aim.
Additionally, names of the individuals who benefited from the transaction must be included on the payment request, regardless of source of funds, venue location (on or off campus), and form of payment used. In lieu of individual names for groups larger than ten, the approximate number of persons, and the group’s identity, along with the business purpose, will be accepted.
Regardless of the type of purchase, funding source, amount, or form of payment used, all reimbursement and payment requests must be approved by an authorized approver as specified below:
Individual – The individual who incurred the expense must initiate or approve his/her own reimbursement request
Manager – Request to reimburse an employee must have the approval of that employee’s immediate manager
Senior Business Officer (SBO) – Request to reimburse a non-employee must have the approval of department’s SBO. An SBO approval will be accepted in lieu of an approval from the individual who incurred the expense when at least one of the following conditions applies to the payee:
- Is on medical leave
- Is on long-term travel status (more than 60 consecutive days)
- Is a candidate for employment
- Has terminated his/her employment
Department financial approver (generally the SBO but could be delegate) – Must approve reimbursement and payment request
Vice president or dean – When stated in policy, expenditures which require VP/dean approval can only be approved by a VP/dean. A VP/dean is authorized to delegate their expense approval within their school/department to their most senior level administrator or financial direct report.
Additional approvals – Where indicated in policy
Co-approvals – Any payment and reimbursement request that contains an expense that directly benefits the authorized signer of the account, even if the expense was not incurred by the authorized signer, must have co-approval of the authorized signer’s manager.
Authorized approver responsibility
Authorized approvers are responsible for establishing and subsequently monitoring department-level procedures to ensure that expenses charged to their accounts are:
- allowed by the funding source being used;
- processed in a timely and accurate manner;
- supported by sufficient funds;
- reasonable, necessary and supported by a written business purpose;
- supported by receipts when applicable;
- initiated or approved by the person who incurred the expense;
- approved by the authorized approver if a non-employee incurred the expense;
- co-approved by the authorized approver’s supervisor, if the authorized approver benefited from the expense
- approved, when an exception to policy is warranted, by a dean or vice president (those with titles such as associate vice president, associate dean, etc., are not authorized to make an expenditure policy exception);
- approved, where noted expense requires additional scrutiny, by a dean, vice president, senior vice president, or President; approver has unilateral authority to request further approval from a dean, senior vice president, or President, if necessary in the opinion of the approver;
- in compliance with all expense-related university policies; and
- in compliance with all applicable sponsored project policies.
Reimbursement and payment request are subject to audit and approval by the applicable central administration (i.e., Payment Services or Payroll).
James M. Staten, Senior Vice President, Finance and Chief Financial Officer
University of Southern California