This Guide Memo serves as an introduction to Chapter 5. It covers general policies for the purchase of major and minor construction, equipment, supplies and services by Stanford. The policies in this chapter do not apply to the SLAC National Accelerator Laboratory (SLAC).
The Board of Trustees of the Leland Stanford Junior University, which has responsibility for all University funds, including those received under grants and contracts and those originating with other outside sources, has delegated authority for the acquisition and disposition of property and the expenditure of University monies to various University officers and officials (see Guide Memo 3.2.1: Authorizing Expenditures).
a. Department Administrators
Department administrators in Schools and Departments have the authority to approve the commitment and expenditure of funds for a given purpose and against specific accounts for which they have been officially delegated authority (see Guide Memo 3.2.1: Authorizing Expenditures). For the purposes of this Guide Memo, this action usually takes the form of a Purchase Requisition.
Procurement, part of Stanford's Financial Management Services organization, is authorized to execute contracts and place orders for goods and services, subject to the receipt of an approved Purchase Requisition (see [1.a.] above). With the exception of certain delegations, Procurement is the sole holder of this authority at the University.
c. Purchases by University Departments
Procurement has delegated authority to departments to approve the acquisition of goods or services when the total dollar value of the transaction is less than $25,000 per transaction and does not require a contract or is less than $5,000 on a Purchasing Card transaction. (See Guide Memo 5.3.3: Purchasing Cards.)
d. Unauthorized Purchases
No person not authorized in writing by Stanford may commit Stanford funds to purchase goods or services. If an unauthorized person attempts to commit University funds, Stanford may consider the acquisition effort null and void and decline to pay any invoice that might be issued. Stanford officers, including the Chief Financial Officer, the Chief Procurement Officer, and those to whom the Chief Procurement Officer has delegated authority, including operations managers, supervisors and buyers, may refuse to ratify such transactions. In such a case, the supplier may look to the individual placing the order for payment or reimbursement.
Purchases made without an approved Oracle purchase order number will be flagged and Procurement will contact the requestor for review. Further non-compliance will result in written notice to requester, approver, and the appropriate school or department financial manager. A third instance of non-compliance will result in written notice to the Head of the Administrative Department or the Senior Associate Dean of Finance and Academic Dean of the School, and may result in suspension of Oracle privileges and Purchasing Card use.
e. Personal Expenses
Personal expenses and purchases that are not made on behalf of the University or for use by the University are not permitted. These may be considered fraudulent transactions. Purchases must be for the use and benefit of Stanford University, regardless of intent to reimburse Stanford. If any Stanford user associated with the purchase commits purposeful fraudulent or other inappropriate behavior regarding the proper use of the requisitioning and purchasing process, it will be considered serious misconduct and will result in disciplinary action.
The University's policy is that acquisition of products or services will be by competition between potential suppliers, to the maximum practical extent subject to the requirements of quality, price and performance. Attestation of price reasonableness should be acquired prior to submitting any requisition for approval. This is the responsibility of the requestor. Therefore, individuals that request goods and services are responsible for attaining and documenting their efforts related to purchases requests. Requestors may elect to do one or more of the following to ensure and/or document price reasonableness:
a. Solicit competitive bids
b. Compare pricing across suppliers
c. Document justification for a single source or sole source (a single source is a supplier specifically selected amongst others, due to superior compatibility, quality, service, support, continuity, etc.; a sole source supplies a product or service for which there is no alternative supplier). The source justification should include the following information:
1) A specific description of the supplies or services required to meet the needs, and a statement of facts that show the unique qualifications of the services or items selected to satisfy those needs.
2) A description of efforts made to locate other sources of supply.
3) Documentation that the anticipated cost is fair and reasonable. This can be a comparison of prices when the item is generally available or, when the item is to be specially fabricated, an analysis of the manufacturer's cost.
4) Any other information supporting the use of other than full and open competition.
All procurement activities must conform to the University Code of Conduct (Guide Memo 1.1.1), Staff Policy on Conflict of Commitment and Interest (Guide Memo 1.5.2), and Faculty Policy on Conflict of Commitment and Interest (Research Policy Handbook 4.1). Any known or apparent violation of these policies, whether by an employee or a supplier, must be immediately reported as directed in these policies.
b. Personal Purchases
Procurement does not arrange personal purchases for Stanford faculty, staff or students. The Buyer can render assistance to such individuals only by informing callers of the names of known suppliers. The buyer will spend no time locating suppliers or securing quotations. Similarly, a department may not place an order for an individual employee or student and then have that person reimburse the department.
Stanford provides many goods and services on campus for less than an individual order placed off-campus would cost. A department needing a product or service provided by a Stanford source should order from a Stanford organization that provides it. If Procurement receives a requisition from a department for an item available at Stanford, the buyer may forward the requisition to the appropriate Stanford organization or require the department to place an order that can be processed without the assistance of a buyer.
Stanford University receives many government grants and contracts for academic research. In carrying out its sponsored projects, Stanford fulfills the agreement's conditions, some of which are stated in the sponsored project agreement, others in statutes, regulations and policy statements.
a. Terms and Conditions
A grant or contract often requires Stanford to include certain contractual clauses in purchase orders or subcontracts issued under the award. Procurement determines which contractual clauses are appropriate for inclusion in individual contracts.Purchase orders should be placed through the Procurement department to ensure compliance with Stanford's purchasing policies and legal requirements.
b. Prior Approval
If a government sponsored project agreement is a funding source, a government representative may be required to approve a proposed purchase of capital equipment or complex goods or services before the buyer places the order. See the Property Administration Manual for prior approval procedures.
(1) Offices Needing Documentation
The requesting department is responsible for maintaining records of approval documentation. When required, Purchasing or Accounts Payable may request copies of such documents.
If the purchase requires government approval of subcontract provisions, the buyer will obtain necessary approval and keep it in the Procurement Office files.
c. Pre-Acquisition Screening
The U.S. Government Office of Management and Budget Circular A-110 and other government regulations that cover the administration of agreements with federal government agencies require that Stanford screen the existing inventory of capital equipment for availability before ordering capital equipment to avoid purchasing "unnecessary or duplicative items."
(1) Screening Levels
The department making the purchase must screen for items of equipment costing between $5,000 and $24,999 at the departmental level before purchase, and items at $25,000 and above at the University level. Equipment costing less than $5,000 need not be screened.
(2) Loans and Transfers
Government policy encourages loans or transfers of equipment from other government projects.
(3) Where to Get Help
For information on screening procedures, see the Property Administration Manual.
Certain transactions require permits or licenses from the federal government. Stanford's customs broker and preferred vendor for outside logistics services provide consultation and assistance as necessary. Procurement will provide contact information for current vendors on request. The permits or licenses most frequently required to transact business are:
a. Agriculture Permits
The Department of Agriculture issues permits for import of certain organisms and biological vectors. The requesting department is responsible for obtaining a permit for each shipment or group of related shipments. The form required by the USDA is VS 16-3.
b. Import or Export Licenses
The Department of Commerce or the U.S. Department of State issues licenses for either export or the importation of equipment or technical data. The requesting department is responsible for obtaining and/or signing the required license.
c. Duty Free Entry of Scientific Equipment
The U.S. Department of Commerce may exempt payment of import duties for scientific equipment. Each department requesting such exemption is responsible for filling out the appropriate paperwork. The form required is ITA-338P.
d. Radioactive Materials
A requisition for radioactive materials must contain a Controlled Radiation Authorization (CRA) number (obtainable from Health Physics) before Purchasing processes the order.
The United States Department of Transportation and the Federal Aviation Administration enforce strict and detailed regulations to assure the safety of aircraft and other modes of transportation for hazardous materials or "Dangerous Goods." Dangerous Goods include, but are not limited to those that are flammable, combustible, corrosive, reactive, oxidizing, toxic, radioactive, infectious, elevated in temperature, highly magnetic, or compressed gasses. Aerosol cans and Dry Ice are also regulated. Violations may result in monetary penalties.
The person(s) packing the material and/or signing the shipping papers must be trained and certified in the shipping of Dangerous Goods. The training and certification must be repeated within every two year period.
b. Where to Get Help
The Environmental, Health and Safety Department offers training and has a certified shipper on staff. EH&S personnel are available and ready to help prepare any Dangerous Good for shipment. For web-based information, see Shipping of Hazardous Materials.
This Guide Memo describes the organization of the Procurement Department and its relationships with other administrative departments, both within and external to Stanford.
The Procurement Department is part of the Financial Management Services organization and reports to the Senior Associate Vice President for Finance. Component groups are described below.
a. Strategic Purchasing Services
Strategic Purchasing is responsible for acquisition of a wide variety of products and services. Procurement buyers' responsibilities include maintaining lists of prospective and approved vendors, soliciting bids or proposals, negotiating price and terms and conditions of purchase, selecting suppliers and issuing purchase orders.
Contract Specialists are responsible for negotiating, writing and executing written contracts. Contract specialists negotiate and write consulting agreements, sponsored project subcontracts, repair and construction agreements, architectural, engineering and other services agreements and service order agreements.
b. Strategic Payment Services
Strategic Payment Services is responsible for ensuring payment procedures have been followed and suppliers of products or services are paid. Strategic Payment Services also establishes policy regarding sales and use taxes and ensures their collection and remittance.
c. Procurement Systems
The University has implemented Oracle Financials systems to manage its financial transactions. All acquisition transactions, including purchase requisitions, reimbursement requests, purchase orders, invoices, and payments must be entered in the Oracle Financials system. This system is referred to simply as "Oracle Financials" elsewhere in this and other Guide Memos.
a. Internal Audit
Internal Audit conducts periodic reviews of the Procurement organization and facilitates external audits, as required. Staff of both offices work together to implement Internal Audit's recommendations. Procurement may participate in audits of other departments if the audit involves one of Procurement's functions.
b. Office of Sponsored Research (OSR)
OSR has primary responsibility for negotiation and administration of contracts and grants between Stanford and outside sponsoring agencies, including the federal government. OSR's responsibilities include signing, on behalf of the University, various certifications required by federal or state agencies, including the Certification of Compliance form from suppliers or vendors. Procurement and OSR confer on award document provisions that affect either the contracting process, subcontracting under private or federal prime contracts, or University compliance with federal regulations, such as Public Law 95-507 or other socio-economic provisions.
c. Property Management Office (PMO)
The Property Management Office is responsible for developing, implementing and maintaining the equipment inventory system. PMO reviews capital equipment acquisitions and surplus property sales requests for conformance with University property procedures.
Surplus Property Sales sells surplus equipment and material to Stanford departments, employees, students and the general public. See Guide Memo 5.2.4: Surplus Property Sales, for more information.
d. Land, Buildings and Real Estate (LBRE).
Multiple LBRE departments provide a range of services, including:
(1) Department of Project Management (DPM)
DPM is responsible for major construction project management and project administration within LBRE. Procurement is responsible for the commercial aspects of contract negotiation, contract execution and contract administration for DPM.
(2) Buildings and Grounds Maintenance (BGM)
The Contracts Group negotiates Service Order Agreements for BGM, which enables the Buildings Operations Group to deal directly with contractors for repairs, maintenance, and minor construction for Stanford structures, systems, and grounds. For contracted facilities renewal and planned maintenance, Zone Management coordinates with Procurement to bid, negotiate, and award maintenance, design, studies, and construction contracts on a per project basis.
(3) Other LBRE Departments
In addition to DPM and BGM, other LBRE departments, including Sustainability and Energy Management (SEM), Land Use and Environmental Planning (LUEP), and University Architect/Campus Planning and Design (UA/CPD) have responsibility for undertaking and/or providing studies, projects and services related to campus utilities and transportation, land use and environmental issues, as well as building and landscape design.
g. Risk Management
Risk Management assists departments with claims over $1,000 for damaged or lost goods.
To facilitate negotiation with vendors on price agreements, Procurement encourages schools and administrative areas to provide the Director of Strategic Purchasing Services with a long-range forecast of anticipated acquisitions during annual budget formulation.
b. Order Management
The University department initiating an order is responsible for the following:
c. Permits and Licenses
The department is primarily responsible for signing or obtaining necessary permits or licenses in support of the acquisition of products, i.e., import licenses, U.S. Department of Agriculture permits for importation of a biohazard, etc. (see Guide Memo 5.1.1: Procurement Policies).
(1) Packing and Shipping Off-Campus
The department is responsible for packing items for shipment. The person(s) packing and/or signing the shipping papers for any "Dangerous Goods" including Dry Ice, must be trained and certified. The training and certification must be repeated every two years. For further information and assistance, see Shipping of Hazardous Materials.
(2) Loss or Damage Claims
The department is responsible for asserting any claim for damaged or lost goods. (Procurement and Risk Management may be available to assist; see Guide Memo 2.4.4: Property and Liability Insurance, and Guide Memo 5.3.1: Requisition Processing.
a. Office of Naval Research (ONR)
The Office of Naval Research has cognizance for administration of most Department of Defense and NASA contracts at Stanford. Procurement works closely with ONR for any necessary approvals on government subcontracts. ONR conducts a periodic review of Stanford's Procurement system and Procurement works with ONR to implement recommendations made.
b. Defense Contract Audit Agency (DCAA)
The Defense Contract Audit Agency conducts periodic audits of Stanford's Procurement system. As with ONR's annual audits, Procurement works with DCAA to implement any recommendations.
c. Small Business Administration (SBA)
The SBA has responsibility for reviewing Stanford's activities under government regulations for doing business with small business and other targeted concerns (see Guide Memo 5.5.1: External Affirmative Action). SBA visits Stanford periodically and examines supplier selection and subcontract award practices, particularly under government contracts for which Stanford has submitted subcontracting plans.
This Guide Memo describes arrangements by which the University advances loans that are repaid over time to schools and departments to finance capital projects, programs or purchase equipment.
a. "University financing" is an internal mechanism whereby the University makes an unsecured loan ("Internal Loan") to a school or department to finance capital projects, programs or purchase equipment and recovers the loan principal, plus interest, over the useful life of the asset by system generated journal entries from a PTA (Project/Task/Award) or PTAs identified by the department. The authorization to borrow is documented in a Funding Agreement for projects that are approved by the Board of Trustees (BOT) and in a Form 1 for other projects. While the asset is owned by the University, the school/department retains all ownership responsibilities, including recording the equipment purchase into the Sunflower Assets System as soon as it is received and in service.
b. "Amortization" also referred to as debt service, is the repayment of principal and/or interest over the term of an Internal Loan. For service centers, the principal component of debt amortization payments on a project is treated as a proxy for asset depreciation expense charges and is included in the service centers' rates as such. Interest is charged and principal balances are amortized based on the prior period's ending principal balance.
c. "Religious Use" means any use including services, meetings and any other activity conducted by or for a religious group or organization in a University facility.
d. "Private Use" generally means the use of tax-exempt-financed property in a trade or business by any person or entity other than the borrower, a 501(c)(3) affiliate of the borrower, or a state or local government entity, and use by the borrower [or any other 501 (c)(3) organization] in an "unrelated trade or business." The use does not have to result in unrelated business income to be considered private use. Private use examples may include but are not limited to: lease of university property to non-university entities; non-compliant management or service contracts (e.g., food servicecontracts); non-compliant corporate sponsored research agreements; naming rights arrangements with a private user.
e. "Substantial Completion" occurs when an asset is "placed-in-service." An asset is placed in service when one of the following conditions is met (in order of availability and importance):
(1) issuance of a Temporary Certificate of Occupancy (TCO)
(2) signed-off Permit,
(3) certification by a Project Manager
Schools and departments may obtain Internal Loans for academic capital projects, capital equipment purchases, service center capital projects and capital equipment purchases, auxiliary projects and capital equipment purchases, bridge financing the receipt of gift pledges and receivables, and other University programs such as the Faculty Staff Housing Program.
Once an Internal Loan is approved, the Treasurer's Office and Capital Accounting determine whether the project is eligible for taxable, tax-exempt, or a mix of taxable and tax_exempt debt. If the Funding Agreement or Form 1 indicates that a capital project is designated for academic purposes and tax-exempt debt is allocated to the project, it is implied that there will not be a change in use throughout the life of the project. Penalties may be incurred if religious and/or private use take place in facilities financed with tax-exempt debt. The Treasurer's Office, the Tax Director or the Capital Accounting Bond/Tax Compliance Analyst in the Controllers' Office should be notified if religious and/or private use in a tax-exempt financed facility is contemplated at any time. Questions regarding Private Use or Religious Use can be directed to the Capital Accounting Bond/Tax Compliance Analyst.
a. University Approvals
The Chief Financial Officer (CFO) or his/her designee is advised on debt allocations by a group consisting of representatives from the Provost's Office, Land, Buildings and Real Estate (LBRE), and the Controller's Office. Certain allocations of debt may be subject to completion of a debt affordability analysis conducted by the Treasurer's Office and approval by the CFO. Financing of all capital projects requires an authorized Form 1 or, approval from the Board of Trustees (BOT) and an executed Funding Agreement. Form 1 approval procedures are outlined on the LBRE/Department of Capital Planning website. Guide Memo 8.3.1: Capital Projects, provides guidance on capital projects.
The BOT must review and approve increases in budgeted project costs for BOT level projects, including new building construction, projects with a total cost of $10 million and above, use of 5,000 or more new square feet within the academic growth boundary, changes in land use, and projects with major exterior design changes.
Bridge financing of gift pledges for capital projects requires prior approval from the Provost and the CFO and must be documented in a Funding Agreement. The Funding Agreement addresses financial responsibility during and after construction. See Section 4.f for information on the repayment of Internal Loans, which bridge finance the receipt of gifts.
The Capital Accounting department in the Controller's Office is responsible for processing approval for all capital projects and capital equipment loans.
b. Capital Equipment Approvals
Schools may require approval from the School Dean's Office before committing to finance a capital equipment purchase.
The BOT approves University debt issuances and delegates responsibility to the CFO to issue debt in the capital markets and to advance Internal Loans to schools and departments. The organization responsible for servicing Internal Loans (Paying Organization) and funding sources must be identified at the time of approval and documented in a Form 1 or in a Funding Agreement. The Paying Organization will be responsible for monthly amortization payments (interest and principal) on an Internal Loan over the remaining useful life of the asset being financed. The Treasurer's Office is responsible for the repayment of external debt.
a. Budgeted Interest Rate (BIR)
The University accumulates, by project, in a single fund (Single Interest Fund) all interest expense and bond issuance costs ("Interest") from notes and bonds issued to finance capital projects and programs that support the academic mission of the University. The BIR is the weighted average rate of all Interest related expenditures, including administrative costs, over the projected outstanding debt of the University available for project/program loans during the same accounting period (generally the University's fiscal year). The BIR is charged to the outstanding unamortized Internal Loan principal balance. Notes and bonds or other debt issued to finance activities unrelated to the academic not for profit mission of the University, or issued to finance a specific asset are excluded from the BIR calculation.
b. Taxable Debt Premium
If, as a result of management decisions, the project funding structure requires taxable debt when tax-exempt debt would have otherwise been permitted, a 1% interest "Premium" will be assessed. The Premium will be calculated on the Internal Loan principal balance outstanding, it cannot be capitalized and will be charged directly to an operating account until the taxable debt is fully amortized. The Premium is subject to change throughout the internal amortization period. The 1% Premium will be published along with the BIR.
c. Prepayment Penalty
The borrower may incur a prepayment penalty ("Penalty") if debt requested for the project is reduced after the Form 1 or Funding Agreement has been executed. The Premium will be equivalent to (1) interest expense on the corresponding bond obligation until such time as proceeds have been redeployed, or (2) premiums and fees incurred to repurchase the corresponding bond obligation in the open market.
d. Exceptions to the BIR
The BIR is not charged to projects for which construction is in progress (CIP). During CIP and until Substantial Completion, interest on Internal Loans is added to the loan principal balance outstanding and capitalized. During CIP, the interest rate charge is the effective monthly weighted average interest rate computed by Capital Accounting. The intent is to make the capitalized interest expense included in the cost of construction, an accurate component of the total cost of the building, which is then used to calculate depreciation expense for financial reporting.
e. BIR Calculation
Each year in December, or as needed for the general funds forecast, the Treasurer's Office in collaboration with the Capital Accounting group develop a BIR forecast for next fiscal year's budget.
During the course of the fiscal year, the Capital Accounting group compares the effective BIR with the approved BIR. The CFO determines if the variance between effective and approved BIR requires an interim adjustment. In the event of a mid-year reset, the prior months' interest expense will not be restated.
f. Amortization of Internal Loans
In the month following Substantial Completion of a capital project, installation of capital equipment, or the draw down of an Internal Loan for a program, the Capital Accounting group assesses the BIR on Internal Loans principal balances outstanding and collects principal amortization. Amortization proceeds are deposited in the recycling pool and used for certain Internal Loans.
If 36 months have elapsed since the project's Substantial Completion and it is determined that pledges will not be received, the Internal Loan principal balance is immediately due and payable.
Debt service payments start one month following Substantial Completion. For example, if a project is completed during May, the debt service payment will start in June. The project will be charged capitalized interest in May based on April's ending balance. In June, the project will begin amortizing based on May's ending balance. For purchased equipment (not included in a capital project), the debt service payment starts in the month following the payment for that equipment.
The BIR is used to calculate the interest portion of the debt service payments. The BIR may change during a fiscal year. Prior months' interest expense will not be restated. The University reserves the right to make retroactive adjustments to the BIR if required.
There are two amortization schedules: level payment and fixed principal.
Amortization of Internal Loans is based on the lesser of the estimated useful life of the asset category orthe actual useful life of the asset (e.g., asset disposal or sale). The following are amortization lives (amortization periods) listed by asset category:
|Computer Equipment||3 years|
|Data Handling Equipment||5 years|
|Scientific/Technical Equipment||5 years|
|Standard Telecommunications Equipment||5 years|
|IT (Information Technology) Systems||7 years|
|General Purpose Equipment||10 years|
|Complex Telecommunications Equipment||10 years|
|Modular Furniture||10 years|
|Shop Machinery and Tools||10 years|
|Dedicated Special Purpose Building Space||15 years|
|Electrical and Utility Control System||15 years|
|Storm Drains||15 years|
|Building Renovations, including component Replacements||20 years|
|Steam and Chilled Water Utility Distribution Systems||22 years|
|Domestic Water and Sanitary Sewer Pipelines||30 years|
|New Building Constructions||30 years|
|Parking Structures and Lots||30 years|
|Steam and Chilled Water Utility Production Equipment||30 years|
|Electric and Signal Ducts||40 years|
|Major Structures (dams and reservoirs)||40 years|
Capital Improvements to a Leased space; lesser of the initial lease term or the asset's estimated useful life.
These amortization periods reflect specific assets' expected useful life and are generally consistent with the University's depreciable lives used for financial statements reporting. For indirect cost recovery and financial statement reporting, academic buildings and land improvements are depreciated by components, but for the amortization of Internal Loans, composite lives are used.
For assets not shown, or if asset life does not fall within the guidelines, please contact Capital Accounting.
a. PTA (Project/Task/Award)
The department contacts Capital Accounting to obtain the financing PTA to which the purchase is initially charged.
b. Purchasing Standard Requisition (STD)
The department completes a Purchase Requisition.
Internal Loan principal balances are amortized in equal installments, plus interest, on the remaining balance. Interest on the loan is charged in the month following the invoice for the purchase is paid. Amortization of principal starts the first month after the equipment is purchased. Debt service payments, including both principal and interest, are automatically charged monthly to the PTA(s) designated by the department (in the requisition).
Interest and principal charges can be viewed on expenditure statement(s) for the applicable PTA(s).
e. Loan Closeout
Charges to a departmental PTA(s) stop when an Internal Loan is paid off.
This Guide Memo describes policies that apply to equipment and real estate leases. Capital and operating lease liabilities utilize the University's debt capacity. All uses of debt must comply with the University's debt policy and require prior approval. The only parties authorized to execute documents that commit Stanford to a lease obligation are: the Director of Procurement and the CFO for equipment leases; the Vice President for Land, Buildings & Real Estate; the Managing Director, Real Estate; and, the Provost for real estate leases. For relevant policies, see section 1 in Administrative Guide Memo 5.1.1: Procurement Policies. Approvals, requisition processes and reporting requirements are included.
Leases are contracts under which a lessee has committed to pay stipulated cash payments for the use of an asset (either equipment or real estate) for a specific period of time. For the purposes of this Memo, a lease is considered the commitment to pay for the use of an asset for longer than one year, with total contracted cash payments over the term of the lease of $5,000 or greater.
Capital and operating leases are considered long-term financial obligations of the University. Therefore, all new leases and lease renewals, either equipment or real estate, are considered a use of the University's debt capacity.
Commitments not meeting these qualifications should be considered rentals that are not subject to this policy.
c. Capital Lease
An equipment lease is capitalized if the total anticipated contracted cash payments over the term of the lease, excluding any transportation costs, are greater than or equal to $200,000, on a per contract basis, and at least one of the following criteria is met:
Capital leases are reported as an asset and a liability on Stanford's financial statements and interest and depreciation are expensed.
d. Operating Lease
When an operating lease does not meet the definition of a capital lease in 1.c above, the operating lease payments are expensed as incurred.
a. Approvals and Thresholds
Equipment leases with total anticipated contracted cash payments over the term of the lease of $200,000 and above must be approved by the CFO. Equipment leases with total contracted cash payments over the term of the lease under $200,000 can be approved by managers with requisite expenditure authority in relationship to total contracted cash payments.
b. Approval Forms
The Equipment Lease Approval form can be downloaded from the Gateway to Financial Activities website.
c. Board of Trustees Approval
Equipment leases with total anticipated contracted cash payments of $5,000,000 and above require approval by the Board of Trustees.
Following budget approval, departments must submit an online requisition for the total contracted cash payments over the term of the lease to Procurement in Oracle Financials using the Standard Lease category.
e. Lease Terms
Procurement is responsible for negotiating equipment lease terms. Equipment leases must be signed and executed by the Director of Procurement or the CFO.
f. Reporting Requirements
Departmental Property Administrators are responsible for establishing and maintaining property records for leased equipment in the Sunflower Asset Management System. Leased equipment must be tagged and tracked according to the policies of the Property Management Office.
By September 30 each year, departments must provide the Controller's Office with a certificate and a schedule of all equipment lease obligations to assist with the preparation of the University's financial statements and the property tax-exemption application. Reporting forms for equipment lease obligations can be downloaded from the Gateway to Financial Activities website.
g. Return of Equipment
Unless the department wishes to buy the equipment, a memo to Procurement is sufficient to return the item at the end of the lease. Procurement will notify the lessor.
h. Equipment Purchase at the End of the Agreement
To buy equipment at the end of a lease, the department must submit a new online requisition, using the Standard Capital Equipment category and referencing the original lease purchase order number.
i. Receiving Equipment
The department must inspect, verify and document the condition of leased equipment when received. Online receiving in Oracle Financials is required for leased equipment. A record for each asset must be entered into the Sunflower Asset Management System within 30 days of receipt.
Stanford's high deductible insurance coverage makes it unlikely that the University's insurance carrier would pay for any loss or damage. Therefore, lessor's insurance for equipment should cover all aspects of damage and injury. For more information, contact the Assistant Vice President of Risk Management.
k. Change of Terms
Departments must observe the start and stop dates of the lease. Using the equipment outside the terms of the agreement has significant contractual implications and may subject Stanford to additional rental charges, early termination charges, and other liabilities. The lessor's insurance may be valid only during the stated period. To terminate an equipment lease early, the department must contact the assigned buyer in Procurement.
l. Renewals and Extensions
Departments must submit an online requisition to Procurement to extend the duration or renew the term of a lease.
a. Approval Process and Thresholds
All real estate leases must be included as a capital request in the Capital Planning Process. The Capital Planning Process is managed by the Vice President for Land, Buildings & Real Estate and occurs in conjunction with the annual budgeting process for the University. Departments are required to submit their capital plans and requests for debt to the Vice President for Land, Buildings & Real Estate for approval.
Real estate lease searches and/or negotiations initiated outside the Capital Planning Process must be approved by the Vice President for Land, Buildings & Real Estate.
Any real estate leases, not included in the Trustee-approved Capital Budget, require separate approval from (1) the Vice President for Land, Buildings & Real Estate if the total anticipated contracted cash payments over the term of the lease are under $1,000,000, or (2) the Provost if the total anticipated contracted cash payments are $1,000,000 or above.
b. Approval Forms
Real estate lease approval forms can be downloaded from the Land, Buildings & Real Estate website.
c. Board of Trustees Approval
Real estate leases with total contracted cash payments of $5,000,000 and above require approval by the Board of Trustees.
Following approval and prior to negotiating lease terms, departments must submit an off-campus lease requisition form to the Vice President for Land, Buildings & Real Estate. The form can be downloaded from the Land, Buildings & Real Estate website. The Vice President will direct the request to the Managing Director, Real Estate for target locations within the Stanford Research Park or the Welch Road corridor. The Vice President will advise in the search, or direct the requestor to an approved real estate advisor for other target locations.
e. Lease Terms
The Vice President for Land, Buildings & Real Estate and/or the Managing Director, Real Estate will assist departments in negotiating lease terms. Real estate leases must be executed by the Vice President for Land, Buildings & Real Estate or the Managing Director, Real Estate.
The Office of the General Counsel must review and approve material exceptions to standard terms.
Upon execution of the lease, departments must request a Purchase Order or BU number from Procurement for the total contracted cash payments over the term of the lease, to ensure proper recording of the transaction and to enable payments.
f. Reporting Requirements
Departments must provide the Controller's Office and Land, Buildings & Real Estate by September 30 each year, a certificate and a schedule of all real estate lease obligations to assist with the preparation of the University's financial statements and the property tax-exemption application. Reporting forms for real estate lease obligations can be downloaded from the Gateway to Financial Activities website.
Lessor's insurance for real estate leases should cover damage to the building and premises and injury occurring in the building's common areas. For more information, contact the Assistant Vice President of Risk Management.
h. Change of Terms
Departments must observe the start and stop dates of the lease. Occupying the real estate property outside the terms of the agreement has significant contractual implications and may subject Stanford to additional rental charges, early termination charges, and other liabilities. The lessor's insurance may be valid only during the stated period. To terminate a real estate lease early, the department must contact the Vice President for Land, Buildings & Real Estate.
i. Renewals and Extensions
Departments must follow the approval process to extend the duration of the original contract, exercise options included in the original contract, or renew a real estate lease.
This Memo describes the policies that apply to equipment loans. Only Procurement and the CFO are authorized to execute documents that commit Stanford to a loan obligation.
a. Loans of Equipment
A loan occurs when Stanford receives free use of equipment. For example, a manufacturer may lend Stanford experimental or prototype equipment that needs testing under regular operating conditions. Even though no payment is involved, other liabilities, such as insurance coverage and repair costs, need to be covered by a loan agreement negotiated, signed and executed by Procurement.
b. Sponsor-Furnished Property
Sponsor-furnished property is a loan of property from a sponsor and managed under the terms and conditions of an existing sponsored award or bailment agreement. The Property Management Office, in conjunction with Office of Sponsored Research, is responsible for ensuring the terms and conditions of the award are followed. Find more information about Sponsor-furnished property at Acquisition chapter, Section 2.4 Loans, Transfers and Leases, in the Property Management Manual.
For policy regarding equipment leases, consult Administrative Guide Memo 5.2.2: Equipment and Real Estate Leases.
a. Initiating the Loan
Following departmental approval, departments must submit an online requisition to Procurement in Oracle Financials using the Standard Capital Equipment category. Forward any agreement forms or other documentation to Procurement.
b. Equipment Purchase at the End of the Agreement
To buy equipment at the end of a loan, the department must submit a new online requisition using the Standard Capital Equipment category and referencing the original purchase order number.
The department must inspect, verify and document the condition of loaned equipment when received. Online receiving in Oracle Financials is required for loaned equipment as it is for purchased equipment.
Departmental Property Administrators are responsible for establishing and maintaining property records for loaned equipment in the Sunflower asset management system. Within 30 days of receipt, loaned equipment must be tagged and tracked according to the polices in the Property Management Manual.
Stanford's goal is for the lender's insurance to cover all aspects of damage and injury related to an equipment loan. Contact the Assistant Vice President of Risk Management or the Director of Procurement if there is any question of Stanford assuming any liability for the loan or that appropriate coverage is provided.
If the lender is not providing insurance, note this on the requisition.
Departments must observe the start and stop dates of the loan. Using the item outside the terms of the agreement has significant contractual implications and may subject Stanford to rental charges, early termination charges, and other liabilities. The lender's insurance may be valid only during the stated period.
Unless the department wishes to buy the equipment, a memo or email to the assigned buyer in Procurement is sufficient to return the item at the end of loan. Procurement will notify the lender.
To terminate an equipment loan early, the department must contact the assigned buyer in Procurement. An online requisition to Procurement is required to extend the duration or renew the term of a loan.
This Guide Memo covers sale of surplus University property.
a. Surplus Property Sales Office
The mission of the Surplus Property Sales office (SPS) is to sell University property for the best possible price while ensuring responsible handling of excess assets and contributing to campus-wide sustainability initiatives. The Board of Trustees has authorized only SPS to perform this function (Resolution Number 3 September 13, 1983). Therefore, the only entity authorized to sell tangible personal property (hereafter referred to as "property") to non-Stanford entities is SPS.
For the purpose of this document "property" is defined as capital and non-capital movable assets including, but not limited to, equipment and accessories, furniture, vehicles, or supplies.
Specialized sales may include significant involvement by departments, including the identification of a potential buyer. In such cases, the sale must be pre-approved and processed by SPS. The check from the buyer is to be made payable to Stanford University Surplus Sales, and include sales tax, where applicable. All payments must be deposited by Surplus Property Sales.
b. University Departments
Departments may not give, sell or donate property to individuals, including Stanford employees and students, or to non-Stanford entities, including non-profits. If a department arranges a buyer to purchase property, the sale amount must be approved by SPS. All sale transactions must go through SPS. Departments may transfer property to other departments, either for no charge or for credit to departmental accounts. The property must be used for University business purposes. The ReUse website is available to facilitate viewing and posting items available for interdepartmental transfer. The transferring and receiving departments must notify the Department Property Administrator (DPA) and Property Service Representative (PSR) of a transfer to ensure asset records reflect the change. Refer to the Property Management Manual for transfer procedures.
a. Transfer Between University Departments
Because title to the item remains in the University, there is no sales tax incurred.
b. External Sales
Sales tax will be applied, as required, to all external transactions.
a. Disposition Requests
The Department Property Administrator (DPA) initiates an excess request upon notification of excess property. Surplus Sales will determine optimum disposition method for the assets, including potential sale. For specific information refer to Section 4.2, Disposition and Transfers in the Property Management Office (PMO) Property Management Manual.
b. Sales Terms and Conditions
Established terms and conditions apply to all sale transactions. Full description of these is available in Section 4.3, Surplus Property Sales, in the Property Management Manual.
c. Sales Commission
As a self-funded department, SPS retains a percentage of all sales based on the SPS Fee Structure, for purposes of offsetting operating expenses. The SPS Fee Structure is reviewed and approved annually as part of the University's budget process. Refer to Section 4.3, Surplus Property Sales, in the Property Management Manual for additional details.
d. Sales Expense
Any expenses related to the sale of an item will be deducted from the proceeds of the sale or charged to the department if no sale occurs. Sales expenses may include, but are not limited to: appraisal, advertising, brokerage, or auction fees; diagnostic, registration, smog and repair costs; moving, handling, transportation, and disposal expenses.
The proceeds from sales of any University-owned property belong to the University. Sales revenues are distributed in accordance with the approved SPS fee structure.
Buyers are responsible for timely packaging, removal and transport of the items they buy.
g. Sale Records
The buyer may not take possession until payment has been received by SPS. Records of all sale transactions are retained by SPS per University Policy as stated in Guide Memo 3.1.5: Retention of Financial Records.
h. Equipment Inventory Update
Property records are updated by PMO as appropriate, to reflect the final disposition transaction.
i. Non-Marketable Property
Items that are broken, inoperable or otherwise deemed unsellable will be disposed or recycled per University policies via the prescribed excess process by Surplus Sales. For equipment items there is no additional cost to departments for this service. For furniture items, such items may be disposed of by departments at their cost with prior approval from PMO.
j. Right of Refusal
Surplus Sales may refuse items that are deemed to be in non-marketable condition. Delivery will be diverted to PSSI for disposal at the originating department's expense.
a. Property owned or funded by Federal or other Sponsors
Authorization from the Sponsor may be required prior to disposal or sale. The DPA must work closely with the Property Management Office in handling such transactions. Contact your Property Service Representative (PSR) for further instructions.
b. Donated Equipment
Internal Revenue Service requirements may restrict or prohibit sale of donated equipment. See Guide Memo 4.2.3: Records of Donated Equipment, for more information.
c. Hazardous Equipment
d. Software and Sensitive Data
Before delivery to SPS, departments must take steps to permanently remove University proprietary information from any computer or computer peripheral device. See Secure Computing for a complete description of University policy regarding data sanitization. Special care should be taken with licensed application software to ensure that the terms of the licensing agreement regarding sale or transfer have been observed.
This Guide Memo provides an overview of the procurement process. University departments are encouraged to contact Procurement early in the acquisition process. Procurement buyers and Contracts Specialists can help develop technical specifications and provide product descriptions, estimates of cost or price and lists of suppliers.
The University has implemented the Oracle Financials systems to record its financial transactions. All acquisition transactions, including purchase requisitions, reimbursement requests, purchase orders, invoices, and payments must be entered in the Oracle Financials system. Administrative staff typically use the Oracle iProcurement system for requisition entry and lookup, and the ReportMart system for general financial reporting needs. This system is referred to simply as "Oracle Financials" elsewhere in this and other Guide Memos.
a. Preparing Transactions
Online transactions must be prepared by a person with a SUNet ID and appropriate authority to access the online systems. Stanford faculty, staff, and students acting in an administrative capacity all have access to the online acquisition systems.
Every requisition is electronically stored and routed on the computer system to a designated person who is an authorized approver for the account to be charged for the acquisition of products or services.
c. Transaction Processing
Business transactions are processed through Oracle Financials electronically, which includes forwarding or returning purchase requisitions to personnel with signature authority, obtaining authorized approvals electronically, sending appropriate notifications to users, transmission of orders and related documents to suppliers, and payment for products and services.
d. Personal Expenses
Personal expenses and purchases that are not made on behalf of the University or for use by the University are not permitted. These may be considered fraudulent transactions. Purchases must be for the use and benefit of Stanford University, regardless of intent to reimburse Stanford. If any Stanford user associated with the purchase commits purposeful fraudulent or other inappropriate behavior regarding the proper use of the requisitioning and purchasing process, it will be considered serious misconduct and will result in disciplinary action.
e. Getting Started
To help employees gain familiarity with the system, classes are offered periodically. Online tutorials are also available.
In addition to departmental approval, schools may require Dean's Office approval for purchases. A requisition will also be automatically routed to other offices if their approval is needed.
Attachments for requisitions are normally electronically attached to the Oracle iProcurement requisition.
a. Information Source
Departments may obtain information about vendors through lookup in the Oracle iProcurement system, or by contacting Procurement directly.
b. Soliciting Suppliers
After an online requisition of $25,000 or above is made available to Procurement, the assigned buyer works with the requesting department in considering potential suppliers. If written bids, quotations or proposals are appropriate; the buyer prepares and communicates solicitations to prospective suppliers. The buyer and the department select the supplier based on Stanford's policies.
c. External Affirmative Action
The University is committed to doing business with small businesses and other targeted concerns when they can supply products or services that meet the University's needs; see Guide Memo 5.5.1: External Affirmative Action.
Procurement is authorized to assign a contract number to formal contracts. Unless otherwise authorized by the Board of Trustees or delegated authority from the Chief Purchasing Officer, no other University department may assign contract or purchase order numbers in acquisition of products or services.
A written contract may be appropriate in the following circumstances:
When the product, service or terms of acquisition must be changed for the acquisition to meet the University's needs, the department is responsible for initiating an online requisition to authorize the change. Requisitions for change or modification should be promptly processed by University departments. A failure to do so may result in no delivery of the product or service or nonpayment of the supplier.
a. Delivery Points
(1) General Shipments
Most campus shipments are delivered directly to the ordering department by the supplier or shipper. If there are questions or special requirements concerning a delivery, a Procurement buyer can advise on the appropriate manner, place and terms of delivery to be included in an order.
(2) Radioactive Shipments
Radioactive materials may not be delivered directly to any department. All shipments of radioactive material go to the Health Physics Inspection Station at 820 Quarry Road for examination by Health Physics and verification of a CRA (Controlled Radiation Authorization) number. After examination by Health Physics, delivery is made or the materials may be picked up by the requesting department. Refer to Guide Memo 5.1.1: Procurement Policies.
(3) Biohazard Shipments
Bio hazardous material may be delivered directly to University departments; however, each department is responsible for ensuring that a department representative is available to receive the shipment and for ensuring that safe handling of such products occurs upon delivery. Refer to Guide Memo 5.1.1: Procurement Policies.
b. Certification of Receipt or Acceptance
Receipt of goods or services is entered into the online systems. Receiving transactions are used by Accounts Payable to determine eligibility of a particular invoice for payment. Special circumstances may occasionally require more complex procedures. Requestors should work with the cognizant buyer and Accounts Payable representative to accommodate any special needs.
Procurement can expedite orders when notified by a department or supplier that an order needs special attention, i.e., a delivery failed to come in as expected, etc.
The University department is primarily responsible for administering shipping claims. If Procurement was involved in the transaction, the buyer can, upon request, assist departments in handling damage claims, return or repair of defective items, and/or return of the item delivered when the wrong product was shipped. For losses or damage over $1,000, the Risk Management Office may be contacted for assistance.
e. U.S. Customs
The buyer assists departments in complying with U.S. Customs, filling out, signing and submitting applications for duty-free entry of scientific instruments, and permits for importation of organisms and biological vectors.
Note: Procurement uses the services of Stanford's exclusive customs broker and preferred vendor for logistics services, and encourages University departments to do the same. Contact Procurement for more information.
This Guide Memo contains policies on Blanket Purchase Orders.
If a department frequently needs supplies or services from the same supplier, Procurement may establish a blanket purchase order. Blanket purchase orders are established for varying periods, and allow the department to order directly from the supplier. The blanket purchase order contains ordering and billing instructions, a price agreement, and a description of the goods or services that can be ordered.
a. Audit Trail
The ordering department is responsible for maintaining a complete audit trail of transactions under a blanket purchase order. This includes administering and documenting the authority for issuing orders and maintaining records of transactions.
Individual releases under Blanket Purchase Orders are not entered online in Oracle Financials. The ordering department is responsible for tracking releases independently of online systems. All releases must carry the Blanket Purchase Order Number, and any invoices presented must also carry the Blanket Purchase Order Number.
The Procurement Department may determine that the interests of productive business dictate a consolidation of business activity. If many departments use one supplier, then Procurement may establish a University-wide Purchase Agreement with that vendor.
University departments should enter a requisition, for each transaction released against a University-Wide Purchase Agreement.
b. Temporary Service
Agency Agreements are established on a University-wide basis every two years. For information about approved agencies, call Procurement. To obtain temporary service help from an agency on the approved list, the department enters an appropriate requisition online. The Agency in turn references the approved Purchase Order Number on its invoice. The invoice and a copy of the temporary employee's time sheet (previously approved and signed by the department representative at the end of the employee's work) are sent to Accounts Payable for payment.
This Guide Memo contains policies on use of Purchasing Cards to purchase goods or services made directly by departments. Purchasing Cards are a tool for individuals making purchases on behalf of the University for which Stanford is financially liable. There are two types of Purchasing Cards: an individual Purchasing Card and a Department Purchasing Card. The individual Purchasing Card is issued to a specific person. The Department Purchasing Card is issued to a department and assigned to a custodian. The policies are the same for both types of Purchasing Cards, unless specifically noted.
a. Delegation of Authority
The Chief Purchasing Officer delegates to University departments signature authorization for ordering supplies and services (except for transactions noted in 2.b) directly from vendors with a Purchasing Card when the total cost of the purchase is less than $4,999.99 subject to the limitations contained in this Guide Memo.
[Note: The item cost includes tax, shipping, handling and installation, if applicable. Together the item and all taxes, etc. cannot exceed $4,999.99.]
A department may delegate such authority to those persons authorized to approve departmental expenditures in accordance with Guide Memo 3.2.1: Authorizing Expenditures, or to a selected subsection of that group.
b. Department Responsibility
This delegation of authority comes with the responsibility for departments to observe all University policies and procedures related to purchases, and to observe all government laws and regulations (state and federal) that apply to the commercial transactions placed via the Purchasing Card.
All Stanford transactions, including those using this procedure, are subject to review by the Controller's Office as well as internal and external auditors for compliance with sound business practices, institutional policies and procedures, and any applicable laws and regulations.
The Financial Support Center (FSC) at (650) 723- 2772 is available to consult with departments on the application process, training, and use of the Purchasing Card. For more information, see the Purchasing Card website.
a. Basic Criteria
Stanford faculty, staff and student employees are eligible to obtain a Purchasing Card or Departmental Purchasing Card provided they:
b. Uses Not Allowed
Because of tax reporting, inventory, and regulatory requirements, and to simplify reconciliation, the Purchasing Card cannot be used in the following circumstances:
a. Cardholder Responsibilities
Purchasing Card cardholders act as purchasing agents of Stanford University and are issued a Card associated with their department. Cardholders should not lend or share their Card. They must keep their Card secure and the Card number confidential. A detailed description of all cardholder responsibilities is available at Fingate Buying and Paying.
b. Verifier Responsibilities
Purchasing Card verifiers have the responsibility to review each transaction in the PCard module, including a complete and accurate business purpose, an appropriate account to be charged, completion of all required verification fields, and route to an appropriate approver(s) as soon as practicable within 60 days of the transaction.
Purchases of $75 or more require transmission of an electronic image of receipt with the PCard module transaction. Retention of receipts after successful transmission of electronic image is at the discretion of the department.
Failure to complete verification and approvals within 60 days of transactions may result in card suspension and/or expenditures reported as taxable income to the card user or the cardholder. Cardholders may verify their own transactions but must route transactions to an approver who has authority over the account charged, does not report directly or indirectly to the cardholder, and is not the beneficiary of the transaction. A detailed description of all verifier responsibilities is available at Fingate Buying and Paying.
c. Custodian Responsibilities
Departmental Purchasing Cards are issued to a department and assigned to a custodian. The custodian must be identified on the card application. Custodians control the distribution of the Card to designated individuals, track the use and location of the Card, and must ensure the Card is kept secure. A custodian may not be the approver and must route all transactions to someone with financial authority over the account charged, who does not report to the individual who made the purchase or on whose behalf the purchase was made (beneficiary). A detailed description of all custodian responsibilities is available at Fingate Buying and Paying.
Charges incurred on a Department Purchasing Card are not disputable with JPMorgan. Consequently, the Department is ultimately liable for any fraudulent and erroneous charges not resolved directly with the merchant.
d. Approver Responsibilities
Purchasing Card approvers have the responsibility to examine trans-actions to ensure that charges are appropriate and comply with university policies and purchasing card policies. In addition to reviewing transaction details in the PCard module, approvers must review the electronic image of receipts for purchases of $75 or more, and investigate cases where receipts are not available. Transactions should be approved in a timely manner; failure to complete approvals within 60 days of transaction may result in card suspension and/or expenditures being reported as taxable income to the card user or cardholder. An approver may not be the verifier, and cannot report to the individual who made the purchase or be the beneficiary of the purchase/ transaction.
Note: Approvers should not be an attendee at a business meal for which they are approving. A detailed description of approver responsibilities is available at How to: Review, Approve, or Reject PCard Verifications.
e. School and Department Management Responsibilities
Managers have the responsibility of approving who can be a cardholder, verifier, and/or custodian. Furthermore, managers are responsible for disseminating local business rules and monitoring Purchasing Card transactions to ensure compliance with the Purchasing Card Program policies and any local business rules. Additional information regarding School and Department management responsibilities and tools for monitoring Purchasing Card transactions is available at Fingate Buying and Paying.
f. Strategic Purchasing & Payment Services Responsibilities
To supplement (but not replace) the University officer's basic review responsibility, Strategic Purchasing & Payment Services reviews Purchasing Card and Department Purchasing Card transactions on a sample basis. If Strategic Purchasing & Payment Services finds incorrect or improper charges, they direct the person responsible for the expenditures to correct the error. If necessary, Strategic Purchasing & Payment Services may correct the department's error and will provide the department with a copy of the accounting entry. If excessive or repeated errors occur, additional training may be required or the card revoked.
This Guide Memo describes policies on making purchases from the Stanford Bookstore or directly from publishers.
a. Stanford Bookstore
Departments order books and supplies from the Bookstore using a PurchasingCard ("P-card") or standard purchase order.
b. Books not Stocked in Bookstore
When books are not available in stock, the Bookstore will order from a book wholesaler or publisher. Books will be shipped directly from the wholesaler or publisher to the department.
c. Purchasing with Grant or Contract Funds
When grant or contract funds are used for Bookstore purchases, the department requesting the purchase is responsible for ensuring that the purchases are authorized by the funding source. In some cases, low-cost items such as calculators are viewed in grants or contracts as general purpose equipment and may not be purchased without advance approval by the funding source. Contact the Office of Sponsored Research for more information.
Direct orders for books should be placed via a standard requisition in iProcurement.
Periodical subscriptions and membership dues should be paid via a Non-PO Payment Request in the Expense Requests system.
a. Requesting Reimbursement
Reimbursement of an individual's personal expenditure for books, subscriptions or membership dues with subscriptions can be made through petty cash if the items are within current petty cash dollar limits. All other reimbursement requests must be made via an Expense Report in the Expense Requests system.
b. Receipt Required
The individual is responsible for providing an original receipt showing proof of payment with the request for reimbursement. A copy of the personal check after processing by the bank can serve as a receipt if none is provided by the supplier.
This Guide Memo describes Stanford's policies on payments to vendors for materials or services ordered.
Accounts Payable pays invoices in accordance with payment terms negotiated or secured by Procurement. Departments must ensure that all purchase commitments (those appropriately executed through iProcurement) are made only with approved, Oracle-generated purchase orders.
Accounts Payable may, at its discretion, verify receipt or acceptance of products or services before paying any invoice.
a. Purchase Orders
Marking the item as received in Oracle Financials indicates to Accounts Payable that the invoice may be paid.
(1) Items Requiring Certification of Receipt or Acceptance
Accounts Payable does not pay the invoice until evaluation has been completed and the item has been accepted (see Guide Memo 5.3.1: Requisition Processing).
Note: The department should not mark the item as received in Oracle Financials until it is accepted.
(2) Capital Equipment and High Value Noncapital Purchases
For capital equipment and noncapital purchases of $5,000 or more, Accounts Payable requires approval through Oracle Financials before paying the invoice.
(3) Low Value Noncapital Purchases
For noncapital purchases over $5,000, Payment Services requires department approval. This approval can be made with a signature on the invoice, by receiving in Oracle Financials, or by email response to Accounts Payable's hold notification.
b. Blanket Purchase Orders
Accounts Payable will start the payment process for the transaction upon receiving an invoice listing the blanket order number.
(2) Void Transactions
Accounts Payable will not pay any invoice that exceeds the not-to-exceed total of the blanket purchase order.
c. Price Differences Between Invoice and Purchase Order
For a number of reasons, the invoiced amount may differ from the dollar amount approved on the purchase order or service contract. If the invoice amount exceeds the amount on the purchase document, the Accounts Payable processor is authorized to pay the invoice amount without a written change order only on a standard purchase order where the difference is not more than 10% of the purchase order amount and the total difference does not exceed $250.
d. Periodic Payment Orders
A Periodic Payment Order authorizes Accounts Payable to make a fixed payment at fixed intervals for a specific period of time. This method is useful for equipment rental or maintenance, where the charge remains constant unless something unusual occurs.
A Periodic Payment Schedule is established by Procurement in consultation with the requesting department and supplier. Under a periodic payment order the requesting department's responsibilities include:
a. Prompt Payment Required
Federal and state regulations require Stanford to pay all freight bills within 7 days of receipt. Accordingly, departments must send the freight bill to Accounts Payable as soon as received.
Procurement attempts to negotiate standard terms of Free on Board ("FOB") Destination. That means the title and risk of loss of the item are passed to Stanford upon delivery of an item at Stanford or any other specified destination. If those terms are not acceptable to the vendor, Procurement negotiates to have the vendor prepay transportation charges and add them as a separate charge on the invoice. However, if shipping charges are not known and not included on the issued purchase order, the vendor may prepay freight and separately invoice for shipping costs.
(1) Payment for Freight Delivery Under a Purchase Order
If any department receives a freight invoice for a product obtained under an issued purchase order, a department representative should forward it promptly to Accounts Payable for payment, ensuring that the purchase order number is clearly noted on the invoice.
This Guide Memo describes or references procedures for authorizing payment for services to the University by individuals who are not University employees. SLAC National Accelerator Laboratory (SLAC) currently applies the applicable policies contained herein. SLAC departments should consult the SLAC Office of the Chief Financial Officer website for SLAC procedures which differ from those set forth below. For information about faculty honoraria, please see Chapter 5 of the Faculty Handbook.
Whether an individual is an employee or an independent contractor is determined by the facts in each case.
For information about how the University determines whether an individual is an employee or an independent contractor, see Guide Memo 2.2.3: University Payroll, Section 1.
Stanford reports all payments to applicable tax authorities as required by law. Tax reportable payments are reported annually to the:
a. General Rules
Note: Payments for services rendered may not be processed through petty cash.
b. Use of Purchasing Requisitions
A Purchasing Requisition is used to set up contracts with vendors of services to the University. For more information see Guide Memo 5.3.1: Requisition Processing.
(1) Timing of Request
The purchase requisition should be processed before the services are performed.
(2) Required Information
If the individual's compensation for work performed at the University is paid by a temporary help agency, the person is employed by the agency, and is not put on the University payroll. The University pays the agency, which is then responsible for tax deductions, Social Security payments, and Worker's Compensation insurance.
a. Approved Agencies
Procurement seeks competitive bids every two years from temporary help agencies, and enters into contracts with selected agencies, which are placed on an approved list. Only agencies on the approved list should be used.
For detailed information, see Inviting and Paying Foreign Visitors.
a. Visa Requirements
All offers of reimbursements, travel payments or honoraria to foreign visitors are contingent on the visitor entering the United States on a visa that allows the visitor to receive payments (see Guide Memo 2.4.1: Visas for and Employment of Foreign Nationals.
Visitors with J-1 visa status may be paid honoraria but visitors with non-Stanford sponsored visas must have written permission from their sponsoring officer for payment. Visitors with B-1, B-2, WB or WT status may be paid honoraria if:
(2) Travel Expenses
Visitors from countries that have agreements with the U.S. to waive visitor visas (WB and WT) and visitors with J-1, H-1, B-1 or B-2, or A-1/A-2 visa status may be reimbursed for business travel expenses. Visitors with B-2 visas or WT status must conform to the restrictions listed in (1) above.
b. Tax Information
(1) All Visitors
For non-payroll payments to foreign visitors holding valid visas, the department must submit a Declaration of Tax Status (Stanford Form LA-6), and copies of passport, visa and I-94 card with the Oracle Financials reimbursement request. See Requesting Payment section of Inviting and Paying Foreign Visitors.
Note: all confidential documents and data, including that listed above, should be submitted via the secure Supplier Request Portal.
(2) Visitors from Treaty Countries
If the visitor's country of residence has a treaty with the U.S. ,the following forms may also be required, depending on what type of payment is proposed:
The Travel section of the Gateway to Financial Activities website contains links to printable versions of most of these forms.
Note: Form 8233 and all banking or otherwise confidential data should be submitted via the secure Supplier Request Portal.
c. Tax Identification Number
An Individual Tax Identification Number (ITIN) or Social Security Number (SSN) is necessary if the payment is for an honorarium and the visitor is claiming a tax treaty by submitting the appropriate exemption form (see Section 5.b.(2) above).
Note: Tax Identification Numbers, Social Security Numbers and all baning or otherwise confidential data should be submitted via the secure Supplier Request Portal.
If there is no Social Security Number (SSN) or Individual Tax Identification Number (ITIN), 30% taxes will be withheld from honoraria payments. If there is no tax treaty, 30% taxes will be withheld from honoraria payments (see Section 5.b.(2) above).
a. California Withholding at Source
Payments to an individual who is not a California resident are subject to California withholding at source tax. California law requires that Stanford (the "source" of the payment) withhold 7 percent from payments for non-employee personal services made to an individual who is not a California resident, if the aggregate total of such payments to that individual during a calendar year is greater than $1,500 and services were performed in California.
b. California Residency Status
In general, non-employee, non-corporate individuals without a California address, DMV driver's license, or other sufficient evidence of California residency, who will perform their services over a period of fewer than nine consecutive months, will be presumed to be non-California residents unless they submit a Certificate of California Residence (see below).
c. Certificate of California Residence
If an individual claims exemption from California withholding at source on the grounds that he or she is a California resident, no California withholding will be taken from payments that are made after the following procedure has been completed:
Form 590 is valid for one year; a new form must be completed for a subsequent year.
d. Mandatory Communication
The host department administrator must advise any out-of-state visitor in writing and in advance of the requirements in this section.
Supplemental Research Support is payment for research support made by a department to an individual who is not a Stanford employee. Such payments must meet the following criteria:
b. Tax Status
Supplemental research support is treated in all respects as a fellowship for tax purposes. Fellowships paid to non-degree seeking individuals are taxable.
Supplemental research support payments to visiting scholars are authorized through the Payroll Office (725-5351).
Note: Supplemental research support to a Stanford faculty or staff member must be processed as supplemental salary. See Quick Steps: Request Recurring Payment.
This Guide Memo outlines policy on advancing funds for University activities.
a. Purpose of Expense Advances
Under certain circumstances it may be appropriate to request a cash advance to pay for travel (e.g., airfare or pre-paid lodging) for students or staff members who travel infrequently on University business, or to pay human subjects. All advances for travel must include supporting documentation such as an air ticket receipt showing proof of payment. Any other advance request not implicitly listed above, is considered an exception and requires advance approval by the Director of Strategic Payment Services in Procurement (or designee). The University does not allow expense advances for personal reasons or registration fees. See Guide Memo 5.4.2: Travel Expenses, section 10.
As a preferred alternative to an expense advance, the University has a travel card program described in section 2 of Guide Memo 5.4.2: Travel Expenses.
b. Authorizing and Issuing Funds
Expense advances are authorized by departments, and are issued to the individual who will be incurring expenses. Responsibility for the University funds remains with the individual until an accounting is made of expenditures through an expense report in the Expense Requests system.
c. Amount of Expense Advances
The amount advanced may not exceed the estimated cash required for the activity.
d. Commitment of Funds
Funds authorized for an expense advance are committed against the account specified by the department. However, the account is charged after expenses are recorded.
e. Expense Reports
An Expense Requests expense report covering the full amount of the advance must be submitted in a timely manner. Absent exceptional circumstances, expenses submitted more than 60 days after the date of completion will be reported as taxable income to the individual, in accordance with Internal Revenue Service guidance.
f. Return of Unused Funds
If the business need for an outstanding advance ceases to exist, the funds advanced must be returned immediately. Funds not used for expenses must be returned to the University. See Quick Steps: Return Unused Advance Funds.
Advances not cleared within a reasonable time will be withheld from subsequent reimbursements until the advance has been fully cleared. If it is not possible to recover the advance through reimbursement withholding and it has not been repaid within 60 days, the advance will be reported as taxable income to the individual to whom the advance was intended, in accordance with Internal Revenue Service guidance.
Any advance reported as personal income will be expensed to the specified guarantee account. If the specified account is for a restricted fund, the department responsible for the restricted account is also responsible for transferring the expense to an unrestricted account.
The advance recipient will not be eligible to receive any future advances if the advance was not properly cleared.
a. Initiating a Request
The department initiates a request for an advance online using the Advance module in the Expense Requests system. See Quick Steps: Request a Travel Advance.
b. Timing of request
Approved expense advances must be received by the Travel & Reimbursement department of Strategic Payment Services at least 10 working days before the date the funds are needed. If a Rush advance is needed, or if pickup at the "Will Call" window is requested, a fee will be charged to cover the extra cost involved in preparing and handling the specially processed check (see paragraph 2.c).
c. Check Delivery
Checks for expense advances may be delivered by interdepartmental mail to the department, sent via U.S. Mail, deposited directly to the payee's bank account, or picked up at the Payroll & Payments Services "Will Call" window on the second floor or Tresidder Memorial Union (459 Lagunita Drive, Suite 7). A special handling fee will be charged for all pickups at Tressider and rush requests sent via U.S. Mail.
This Guide Memo outlines policy on travel undertaken for University business.
This policy applies to employees and non-employees traveling on authorized University business, and to all travel expenses reimbursed by the University or paid for on the University Travel Card, regardless of the source of funds.
While policy statements are applicable to the entire University, including the SLAC National Accelerator Laboratory (SLAC), some of the specific procedures listed here do not apply at SLAC. SLAC travelers should contact the SLAC Travel Office for procedural information.
a. Travel Expense Policy
The University's policy is to pay for necessary and reasonable travel expenses incurred for authorized University business by employees and approved non-employees. The intent of this policy is that such payments be fair and equitable to both the traveler and the University and consistent with federal regulations. Individuals traveling on business are responsible for complying with University travel policy as described in this Guide Memo, and should exercise the same care in incurring expenses as they would in personal travel. Expenses should be submitted in a timely manner. Absent exceptional circumstances, expenses submitted more than 60 days after completion of travel will be reported as additional income to the individual, in accordance with Internal Revenue Service guidance.
b. Approval Authority
Authority and responsibility for approving travel by employees and guests of the University rests with the person responsible for the account (PTA) to which the expense will be charged. Travel expenses are payable only when all required approvals, including approval from government agencies or other project sponsors, are obtained before incurring the expense. Expenses incurred during sabbatical leave are payable when the expenses are incurred for reasonable and necessary University business and have the advance written approval of the department Chair. Employees may not authorize travel or approve expense payments for themselves, or for a person to whom they report directly or indirectly.
c. Economical Transportation Required
To be fully paid by the University, the traveler must use the most economical mode of transportation available, consistent with the authorized purpose of the trip. This includes charging no more than the rate for the most direct and usually traveled route and measuring such costs as subsistence and lost work time in addition to actual transportation costs. More expensive transportation may be used if the traveler pays the incremental cost.
GUIDELINE: Automobile transportation is generally most appropriate for round trips up to 200 miles. Commercial air travel is generally the most economical and practical for longer trips. For ground transportation, rental or privately-owned vehicles and taxis should be used only if other means of transportation are unavailable, more costly, impractical, or if the time saved is advantageous to the conduct of the University's business.
d. Limitation on Group Travel
Travel by a group of employees in the same aircraft, automobile or other means of transportation is discouraged when an accident could seriously affect the functioning of a University activity. Maximum coverage under the University's travel insurance also limits the number of employees traveling together at five.
e. Charges to Sponsored Projects
When travel costs will be charged to a sponsored project, the terms of the applicable award take precedence. Some awards may require the sponsor to pre-approve each trip, or each trip to or from a destination outside of the United States.
f. School and Department Guidelines
At their discretion, schools, departments, laboratories and institutes may impose more restrictive guidelines for budgetary or control reasons. They may not be less restrictive than guidelines stated in this policy.
g. Preferred Travel Agency and Online Booking Tool
The University has a "preferred" travel agency and has negotiated contracts to provide services for Stanford employees and their families as well as students and guests of the University. The University will pay travelers for the service fee charged by its preferred agency for Stanford business travel. The University will not pay travel costs that exceed the cost of substantially similar travel available through its preferred agency or negotiated contracts. See the Gateway to Financial Activities website for more information.
The University has a travel card program to facilitate payment of travel-related expenses (i.e., airfare, lodging, car rental, travel meals, etc.) incurred in furtherance of University business. The program is available to regular faculty, staff and post-doctoral fellows. Individual and department cards are included in the program. See the Gateway to Financial Activities website for more information.
a. Lowest Available Airfare
All Stanford staff, faculty members, students and University visitors traveling on business are expected to travel at the lowest available airfare and to take advantage of Stanford's negotiated fares that are available through the University's "preferred" travel agency. Federal regulations require that only the cost of the lowest available airfare may be charged directly or indirectly to government sponsored projects. Criteria used to determine the lowest available airfare are:
b. Stanford Reimbursement
Stanford reimburses fares up to:
c. Accounting for Fares Over Lowest Available
If a traveler incurs charges in excess of the lowest available airfare (as defined in 3.a. above), the difference, up to the fare authorized for Stanford reimbursement (see 3.b.), must be charged to an unallowable expenditure type and a non-government sponsored account/activity. If documentation of the lowest available airfare is not available for a business class trip, the department charges one-third of the cost to an allowable expenditure type and the remaining two-thirds to an unallowable expenditure type and an unrestricted account/activity. For more information on allowability, see Guide Memo 3.1.4: Cost Policy.
d. Charges in Excess of Authorized Airfare
When a traveler prefers a higher class than that authorized, the traveler must pay the incremental difference.
e. Change Penalties
If a ticket has to be changed and a penalty is incurred, the traveler may claim payment from Stanford for the penalty. The penalty may be an allowable charge to a sponsored project. When trips must be cancelled, travelers are encouraged to rebook tickets for travel at a later date whenever possible. Travelers may wish to request payment for tickets to be used later by requesting an Advance in the Expense Requests system. See How To: Create Advance Request.
f. Unused Airline Tickets
Travelers are encouraged to rebook unused tickets whenever possible (see 3.d.). If it is not possible to use the ticket through rebooking, then it may be payable with proper documentation. An unused ticket affidavit must be completed and submitted in Expense Requests with an expense report. Go here to obtain a copy. Unused tickets should be charged to an unrestricted account (PTA).
g. U.S. Government Sponsor
If air travel will be paid by a federally-sponsored project, flying on a U.S. airline is usually required (Fly America Act). In some cases, the sponsor's written prior approval may be required before each trip or each foreign trip. For more information on the Fly America Act, see Policy Notes: Fly America Act (U.S. Air Carrier Requirement).
a. Lodging Choice
University business travelers are expected to use lodging accommodations that are necessary and reasonable. The lowest standard room rates are generally available through:
The traveler may use one of four methods for expenses incurred in connection with official University travel of more than one day. The method selected must be used for the entire trip.
c. Local Travel
Local travel is defined as less than 50 miles one way from Stanford or the traveler's residence, whichever is greater. Barring exceptional business reasons, local travel does not qualify for an overnight stay or payment of personal meals. If a trip exceeds the local travel limit, but the traveler chooses not to stay overnight, personal meals will be eligible for payment. Per diem rates may not be used for local travel. A bona fide business meal is generally eligible for payment [see section 10.b.(6)].
d. Departmental Discretion
Departments may elect to pay per diem for fewer days than the actual stay and may decrease the amount of per diem to reflect actual expenses.
e. Per Diem Applications
Stanford follows U.S. Government General Services Administration travel rates. Current Per Diem rates can be located at the Gateway to Financial Activities.
(1) Per Diem for Days of Departure and Return
Per diem for the first and last days of the trip are payable at 75% of the Meals and Incidental Expense rate applicable for the city visited. The location where lodgings are obtained for the first night determines the rate for the departure day. The location of lodging on the last night determines the rate for the last day of travel.
(2) Multiple Stops
When a trip includes more than one University business stop and the cities involved have different per diem rates, the per diem rate for each calendar day (beginning at 12:01 a.m.) is determined by the location where the lodgings are obtained for that night.
(3) Deduction for Meals Included in Registration Fees
When a meal has been paid for as part of a registration fee or included in the hotel rate, a deduction must be made from the applicable per diem rate. The deductible amount varies based on the rate for the applicable city and may be found at the U.S. GSA website. Select the "Meals and Incidental Expense Breakdown" tab.
(4) Trips Over 30 Days
When estimated travel is for more than 30 consecutive days in one location, or when the circumstances of the travel are such that the traveler can reasonably be expected to incur expenses comparable to those arising from the use of establishments catering to the long-term visitor or from the use of noncommercial facilities (e.g., house-trailers or camping equipment), the traveler may choose to be paid either for the actual and reasonable cost of lodging and meals or a basic per diem allowance of 55% of the standard rate for the appropriate geographic area. The rate begins with the first day of travel.
(5) Extension of Travel
If, while on travel status, the traveler is granted an extension to the original estimated travel which then results in a total of more than 30 consecutive days in one location, the per diem allowance will be calculated at the regular rate from the first day up to and including the 30th day. After the 30th day the long-term rate is applicable if the per diem method is chosen.
f. Non-business Days
Weekends, holidays, and other necessary standby days may be counted as business days only if they fall between business travel days. If they are at the end of a traveler's business activity and the traveler remains at the business destination for non-business reasons, payment is not allowed for the additional days. The only exception is when travel is at a lower total cost if the traveler stays over a weekend or holiday, with department approval. The traveler must document the total cost savings in order to support the non-business day payment. This must be documented at the time of booking of the actual flight, comparing the actual flight to the cost of the airfare for business days only. A printout from Stanford's online booking tool must be included with the iOU expense report. If post-travel dated airfare comparison is submitted as backup, Disbursements will calculate an on-line comparison at the time of processing, and will pay based on the lower of the two equivalent airfares.
g. Foreign Travel
Foreign travel expenses are payable by the same methods as domestic travel. To obtain per diem rates for travel outside the contiguous United States, see website link.
h. Sabbatical Lodging
Sabbatical lodging expenses are paid only if the faculty member incurs two sets of living expenses simultaneously and there is a stated Stanford business purpose for the expenses incurred during the sabbatical. If the primary home is rented out, the faculty member may not be paid for lodging expenses at a location away from Stanford.
a. Expenses Allowed
The University will pay a standard rate per mile (see Travel Rates) for official travel by private automobile based on the actual driving distance by the most direct route (not more than 105% of the mileage listed on the Google Maps.
(1) Standard Mileage Allowance
The standard mileage allowance is in lieu of all actual automobile expenses such as fuel and lubrication, towing charges, physical damage to the vehicle, repairs, replacements, tires, depreciation, insurance, etc.
(2) Automobile-related Expenses
In addition to the standard mileage allowance, necessary and reasonable charges for the following automobile-related expenses are allowed: tolls, ferries, parking, bridges, tunnels, and liability and physical damage insurance coverage for driving in foreign countries or Hawaii [see paragraph 6.e.(2)]. Traffic ticket and parking ticket expenses must be paid personally, not by the University.
b. Local Travel
(1) Common Destination Points
One-way distances from the University to the following common destination points are shown below.
San Francisco International Airport, 25 miles
San Francisco, 40 miles
Asilomar, 92 miles
Berkeley, 42 miles
San Jose Airport, 20 miles
Monterey/Pacific Grove, 90 miles
(2) Computation Starting Point
Mileage may be computed from the traveler's home when travel occurs during weekends, holidays, or outside normal business hours (usually 8 a.m. to 5 p.m.). Mileage must be computed from home whenever the trip does not involve a business stop at Stanford and the distance from home is less than the distance from Stanford.
c. Auto in Lieu of Airport Shuttle
Travelers should use the most economical means for travel to the airport, including parking costs. Shuttle services usually provide the most economical means.
d. Automobile in Lieu of Commercial Air
When use of a personal automobile has been authorized in accordance with Guide Memo 8.4.2: Vehicle Use, and the automobile is used in travel for which air is generally most appropriate, payment may not exceed actual miles the automobile is driven at the standard rate per mile, and may not exceed the allowable cost that would have been incurred had travel been by air. For calculating the equivalent airfare to replace more expensive mileage charges, the coach fare plus ground transportation costs are applicable. Equivalent airfare is coach class, seven-day advance purchase. A printout from Stanford's online booking tool must be included with the expense report. The printout should be dated seven days before the actual travel date to accurately document equivalent airfare. If post-travel dated airfare comparison is submitted as backup, Disbursements will calculate an online comparison at the time of processing, and will pay based on the lower of the two equivalent airfares. If two or more people travel together by automobile for a business purpose, the equivalent airfare calculation is the sum of airfare plus ground transportation costs for all of the travelers.
e. Trips of More Than One Day
The University will pay the mileage allowance, meals, lodging, and automobile-related expenses if travel by automobile is the most economical mode of transporta-tion available. Otherwise the University will pay the cost of the least expensive alternate method of travel. The University will calculate an en-route per diem based on an average driving distance of 400 miles a day by the most direct route, or actual number of days taken, whichever is less. Each passenger claiming payment for meals and lodging must prepare a separate expense report.
f. Two or More People Traveling Together
Because payment for private automobile is to reimburse the owner for use of the car, mileage and related expenses are payable only to one of the two or more persons traveling together in the same vehicle.
g. Temporary Off-Campus Assignment
If the employee has a temporary assignment away from campus, reimbursement will be made for mileage between campus and the assignment location, or home and the assignment location, whichever is less.
h. Insurance and Accidents
See Guide Memo 8.4.2: Vehicle Use.
i. Commuting Expenses
The University will not pay employees for commuting expenses between home and campus. See section 13.d for remote worker policy.
a. Economical Alternatives
The University will pay the traveler for the cost of renting a compact or standard size car and for the automobile-related expenses, if use of the rental vehicle is the most economical mode of transportation. Before renting a car, the traveler should consider shuttle services and taxis, particularly for transportation between airport and lodging.
b. University Name on Rental Agreement
Car rental agreements for both employees and non-employees renting for University business should, for insurance reasons, whenever possible include "Stanford University" with the name of an individual. Use of the University-provided travel card serves this purpose for employees.
c. Driver and Location Limitations
For the traveler to be covered by the rental agency's basic insurance, the rental vehicle may not be driven by persons other than the renter, or leave the state in which it is rented, without the agency's permission.
d. Accident Notification
If a rented vehicle is involved in an accident, the Stanford Assistant Vice President of Risk Management should be notified promptly. See Guide Memo 8.4.2: Vehicle Use.
e. Additional Insurance Needed?
(1) Within the continental United States: NO: Since the University's insurance policy provides coverage in excess of the rental agencies' within the United States, travelers should not buy and will not be reimbursed for extra insurance from a car rental agency. Visitors to the University should be advised that additional insurance is unnecessary.
(2) Within Hawaii: YES: A traveler planning to drive a rental vehicle in Hawaii must purchase the rental agency's insurance. The University will pay the cost of such insurance.
(3) Outside United States: YES: A traveler planning to drive a rental vehicle in any foreign country must purchase the rental agency's insurance. The University will pay the cost of such insurance.
a. Piloting a Private Plane
The University officers listed below, or their designees, may authorize faculty and employees to pilot aircraft for travel on University business provided the documents listed in (1) through (4) are on file with Risk Management:
(1) The following information annually: Plane identification by year, make and model; hours flown in the past 12 months; and pilot certification type. See Risk Management Department for an online form to complete.
(2) A signed Release from Liability Agreement
(3) A current Certificate of Insurance evidencing aircraft liability coverage with minimum liability limits of $5,000,000 combined single limit with no sub-limit for bodily injury liability and no sub-limit for passenger liability. The Certificate of Insurance must also contain the following:
(4) Reimbursement will be based on the actual operating expense, rental fee for the aircraft, or the private aircraft mileage rate (see Travel Rates), up to a maximum amount not to exceed the commercial airfare that would be payable for the same trip. Equivalent airfare is coach class, seven-day advance purchase. A printout from Stanford's online booking tool must be included with the expense report. The printout should be dated seven days before the actual travel date to accurately document equivalent airfare. If post-travel dated airfare comparison is submitted as backup, Disbursements will calculate an on-line comparison at the time of processing, and will reimburse based on the lower of the two equivalent airfares.
Ground transportation costs that were not actually incurred will not be considered. However, actual ground transportation expenses remain payable. Any additional flight expenses, such as tie down fees, will not be paid, as those costs are part of the airplane reimbursement rates and are included in the maximum equivalent airfare calculation. Expense reports for use of private aircraft must show the type of aircraft and number of hours flown. When more than one person is carried on University business on the same flight, reimbursement is payable only to the pilot.
b. Charter Planes
Stanford business trips using chartered aircraft services are to be purchased through the Purchasing and Contracts Department by submitting a requisition for products or services. Before using the chartered aircraft service, the agreement must be reviewed and approved by the Stanford Purchasing and Contracts Department.
c. Railroads, Non-local Buses, Commercial Vessels
The University will pay the cost of the lowest first-class accommodations available for the trip. Payment will not exceed the equivalent commercial airfare for the same trip. Equivalent airfare is coach class, seven-day advance purchase. A printout from Stanford's online booking tool must be included with the expense report. The printout should be dated seven days before the actual travel date to accurately document equivalent airfare. If post-travel dated airfare comparison is submitted as backup, Disbursements will calculate an on-line comparison at the time of processing, and will pay based on the lower of the two equivalent airfares.
(1) Rail or Bus: For each night that railroad or bus accommodation is used, an amount equal to the lodging allowance will be deducted from the per diem rate, if applicable.
(2) Ship: Payment of per diem will not be allowed for the period of travel aboard a ship where the cost of subsistence is included in the fare for passage and stateroom.
a. Expenses Payable by Others
Travelers are encouraged to combine University travel with other business so that travel expenses can be shared with other organizations, and are responsible for seeking reimbursement for expenses payable by others. If a traveler is taking a trip payable jointly by the University and another entity, the University will pay for its share of the actual fare necessary for University business. Fares greater than coach fare (first class, business class, etc.) cannot be used as the basis for prorating air travel costs. When an outside organization pays for lodging or meals, the traveler may not claim per diem from Stanford. In no case may the amount paid for the trip from all sources exceed the total expenses incurred.
b. Non-business Expenses
The University does not pay travel expenses that are not required for official University travel.
c. Indirect Routes
If, for other than University business, the traveler takes an indirect route or interrupts a direct route, payment for air fare will be at either the actual charge or the charge that would have been incurred by traveling the direct route by the most economical means, whichever is less. The charge that would have been incurred for a direct route must be documented, at the time of booking the actual flight, with a printout from Stanford's online booking tool and a copy of the printout included with the expense report.
d. Rental Cars
(1) Payment: Any personal portion of the cost of a rental car must be subtracted from the total rental bill before requesting payment. The personal portion is calculated by prorating the cost of the rental over the number of days for personal use and number of days for business use.
(2) Insurance: If the traveler accepts extra insurance cost for a domestic, mainland car rental in order to be covered during the personal portion, the entire cost of the insurance coverage for the entire rental period will be a personal expense. However, if the rental occurs in a foreign country or Hawaii, the cost may be prorated.
a. Non-business Expenses
In general, the expenses of a spouse, family member, or other person accompanying the business traveler are not payable. Such expenses are only payable if the accompanying person has a position with the University and is traveling to make a significant contribution in furtherance of University business.
It is expected that there will be no exceptions to this policy, which is designed to assure compliance with legal requirements. Any request for an exception in truly extraordinary circumstances must be approved, in advance of the travel, by the Provost.
c. Hotel Rates
When a double hotel room is occupied by the business traveler and others whose attendance does not constitute a business purpose, the University will pay the single room rate. The single vs. double room rate must be provided in the notes section in the expense report or backup documentation. If the single room rate is not available or provided, the amount paid will be 85% of the double rate. In all cases, only reasonable and necessary accommodations will be paid (see section 4.a.).
a. Registration Fees
Registration fees may be expensed at the time of registration by requesting payment using a Non-PO Payment request in the Expense Requests system or seeking reimbursement for a personally paid registration. For conferences and events requiring travel, the University Travel Card can be charged. If registration is for a student, see section 11 for additional requirements.
b. Miscellaneous Expenses
Miscellaneous expenses essential to the purpose of the authorized travel must be submitted for payment on the same expense report as other travel expenses.
(1) Meeting Expenses
Registration (if not prepaid), costs of presentations, published proceedings, rental of meeting rooms and other actual expenses in connection with professional meetings, conferences, and seminars will be paid.
(2) Telephone, Fax and Computer Connections
Actual costs of necessary and reasonable business telephone calls, faxes and computer connections are allowable. Single telephone calls that cost $75 and above must be itemized by business purpose and name of person called, even if the call is to a Stanford number.
(3) Checked Baggage
Stanford reimburses fees associated with checked baggage. Baggage requirements should be reasonable and necessary to support the business need. A justification should be included in the expense report business purpose when more than two pieces of baggage are checked.
(4) Foreign Travel Costs
Actual costs of acquiring passports, visas, tourist cards, necessary photographs, birth certificates, required inoculations, immunizations, health cards, and fees for the conversion of funds to foreign currencies will be paid.
Insurance costs such as life insurance, flight insurance, personal automobile insurance, rental car insurance (except for foreign countries or Hawaii as noted in paragraph 6.e.(2) and (3)), and baggage insurance will not be paid by the University. (See Guide Memos 2.3.1: Survivor Benefit Plans, and 8.4.2: Vehicle Use.)
(6) Expenses on Behalf of Others
Ordinary and necessary business expenses incurred on behalf of others, including but not limited to food, beverages, refreshments and social or recreational activities will be paid. Expenses for personal entertainment are not payable.
Per Diem and Entertaining or Business Meals
When a traveler who is paid at the full per diem rate furnishes a meal to others, either as entertainment or during a business discussion, the traveler must prorate the cost of the meal and seek additional payment only for the guest(s) meals. See Expense Guidance for Business Meals, If multiple multiple business or entertainment meals occur during a trip, or such a meal occurs during a trip of four days or less, the use of per diem for meals is not appropriate. Payment for actual meal expenses with appropriate receipts should be requested for the entire trip. Entertainment/fund raising meals may not be paid when they occur during a trip charged to a government grant or contract unless the actual meal expense option is chosen for the entire trip. In this way, the correct amount can be charged to an unrestricted account (PTA) and unallowable expenditure type.
Any student reimbursement, graduate or undergraduate, which does not meet the criteria for University travel (see Section a. below), including required documentation, will be tax reportable and should be submitted and paid through Graduate Financial Services (GFS) for graduate students and through the Financial Aid Office for undergraduates.
a. Undergraduate and Graduate Students
Students may be reimbursed for business travel whether or not they are employees, or for degree-related educational travel such as to attend a conference or visit a field site or laboratory facility. In most cases, such reimbursements are not tax-reportable to the Internal Revenue Service as income to the student, provided documentation is available showing that the travel:
Any reimbursement to a post-doctoral student that does not meet the criteria for university travel (see Section b. below), including required documentation, will be tax reportable and should be submitted and paid through Graduate Financial Services (GFS) as a fellowship payment.
b. Post-Doctoral Students
(1) Attending a conference, field site, or off-campus laboratory
Documentation: Along with appropriate receipts, the department should send to Travel & Reimbursement a signed statement from a faculty member certifying that the travel directly supports the faculty research or academic program, or attendance is to officially represent Stanford.
(2) Speaking/Presenting a paper, poster, or serving on a panel
Documentation: Along with appropriate receipts, the department should send to Travel & Reimbursement a photocopy of the conference program indicating the traveler is a speaker/ presenter. No certification is necessary.
a. Documentation Required
Payments to foreign visitors, or on behalf of foreign visitors (direct payments to hotels, etc.), may be made only if the visitor enters the United States on an appropriate visa (see Guide Memo 2.4.1: Visas for and Employment of Foreign Nationals. In addition to the documentation required for all travel payments, requests for payment to nonresident aliens must include a signed Form LA-6 (Declaration of Tax Status), photocopies of the traveler's passport, visa, I-94 card, and, for J-visas, a copy of Form DS-2019 (Certificate Of Eligibility For Exchange Visitor (J-1) Status). All sensitive personal information should only be submitted through the secure Supplier Request Portal.
Foreign visitors who will be present here for longer than two weeks may request an advance for the amount of the air ticket. Required documentation must be included (copy of airlines invoice/itinerary showing proof of payment, and documentation listed in 12.a). If the expense will be subject to withholding taxes, deductions will be made from the advance payment unless appropriate tax exemption forms are included (IRS Form 8233 or W8-BEN). All sensitive personal information should only be submitted through the secure portal.
Note that if a trip either originates or terminates in a foreign country, the entire cost of the trip is coded to a foreign travel expenditure type. This includes any costs for meals and lodging in the United States when the trip originated outside the United States.
d. Further Information
For more information on travel arrangements for foreign visitors, see:
a. Interview Travel
Travel expenses in connection with employment interviews are authorized when necessary to acquire key personnel for employment at the University. Travel expenses are allowed to the extent authorized in a formal written invitation to the prospective employee, as long as they do not exceed the limits and are consistent with the policies and procedures in this Guide Memo. Travel expenses of spouses accompanying prospective employees are also allowed to the extent authorized in the invitation. Requirements and limitations in specific sponsored project awards apply.
b. Postdoctoral Employment Expenses
Postdoctoral employment interviews and recruitment are business expenses. Postdoctoral employee moving expenses can be considered business expenses if the postdoc’s position is a regular 100% FTE payroll position of 39 weeks or longer.
c. Moving and Reassignment Expenses
See Guide Memo 2.1.20: Relocation of Faculty and Staff.
d. Remote Workers
Stanford may hire employees who work remotely. These employees do not work in a regular Stanford office, but work from their homes or other location as their principal place of business. If the employee works remotely 100% of the time, occasional trips to campus for department meetings, special projects, peak-time work, etc. may be paid by the department at the manager’s discretion. Such payments are generally not considered to be commuting expenses and therefore are not taxable income to the employee. Each situation of 100% remote work may be very different and the manager and the employee should reach an agreement about the work plan, access protocols and need for on-site visits and any payment that may be appropriate.
Please see Flexible Work Options for more information and guidance.
Dated original receipts or invoices for expenses of $75 or more must be provided to the originator for electronic submission to Travel & Reimbursement as backup to a properly completed expense report. In accordance with IRS rules, the backup must support the cost and business character of the transaction, and, for a reimbursement, must show evidence of payment. Credit card statements are proof of payment, but are not considered to be itemized receipts, and are generally not enough documentation standing alone. If proof of payment by check is required, a copy of the cancelled check or bank statement is sufficient.
The electronic image attached to the expense report is considered the document of record, and the preparer should destroy the original paper receipts once T&R has completed processing and the expense report has been paid.
indicate Original Receipt Missing in the expense report with all relevant information. b. Foreign Exchange Rate
The $U.S. equivalent should be included on receipts for purchases in foreign currencies. A University-approved currency converter is available on the OANDA website. If a copy of the traveler’s credit card statement is included with receipts, payment will be for the amount shown for the item on the statement.
c. Missing Original Receipts
The traveler must seek a duplicate of a missing original receipt from the billing agency. When submitting an expense report, include the duplicate receipt showing proof of payment and indicate Original Receipt Missing in the expense report with all relevant information.
d. Expense Requests Expense Report
The University requires preparation of an expense report to account for any travel expenses that are to be charged to a University account (PTA). The properly completed and approved expense report must be submitted in a timely manner after returning from a trip. Absent exceptional circumstances, expenses submitted more than 60 days after completion of travel will be reported as additional income to the individual, in accordance with Internal Revenue Service guidance. If all expenses cannot be submitted on one expense report, subsequent reports must reference the initial iOU expense report.
(1) Purpose: The expense report must include a statement of the purpose of the travel that shows the direct relationship of the travel to an official University function. The purpose for any stopover en route must also be included. If conference expenses are charged to a sponsored project, the conference must directly support the purpose of the sponsored project. A copy of the conference agenda or program should be included electronically with the submitted backup documentation.
(2) Dates: All days from day of departure to the return date must be included on the expense report. Days for personal use must be shown as such.
(3) Expenses: Costs of transportation, meals, lodging, and miscellaneous expenses must be listed by date and location on the expense report.
(4) Approvals: The expense report must be approved online by the appropriate person authorized to approve expenses for the account(s) (PTAs) charged. No one may approve expenses for himself/herself or for an individual to whom he or she reports either directly or indirectly. Additionally, the person who incurred the expenses is encouraged to electronically approve the expense report whenever possible to confirm that the expense report complies with University policy (see Reimbursement of Expenses, section 1.a). Regardless of electronic approval confirmation, by initiating an expense report, the individual incurring a charge is attesting that the expenses relate to University business and comply with the policies stated in Guide Memo 5.4.3: Reimbursement of Expenses.
(5) Improperly Completed Forms: The traveler is responsible for the accuracy and completeness of the expense report and electronically submitted backup receipts. If the report is not completed properly, it will be returned online. Travel & Reimbursement needs to receive all required backup documents before an expense report can be processed.
e. Special Explanations Required
Written explanations for the following must be submitted with the expense report:
(1) Reimbursement from Other Sources: The traveler must report, including all pertinent details, if expenses for any part of the trip were or will be reimbursed by any source other than the University. Source name, address, and amount must be included on the expense report, even though Stanford will pay only the portion attributable to Stanford.
(2) Expenses not Expressly Allowed: Expenses that are not expressly allowed in this Guide Memo must be fully explained in order to support an exception request.
(3) Unusual Travel Arrangements: If the cost of business class or first-class rates, private or rental air transportation, or travel by private automobile is claimed, an explanation with the request is required. Approval of payment is contingent upon meeting the guidelines, pre-approval requirements and limitations established in this Guide Memo.
(4) Expenses for Others: If reported expenses include entertainment, meals, lodging, or transportation provided for others, the requirements of paragraph 10.b.(6) must be met and the request referenced to other expense reports associated with the trip.
(5) Prior Approval: Whenever travel policy states that prior written approval is necessary, a copy of such must be submitted electronically with the iOU expense report. The same is true for any approved deviation from this Guide Memo.
(6) Unusual Charges: An explanation should be given for any unusually large amount that would normally be viewed as excessive, or any other unusual charges.
f. Travel Expenses as Income
(1) Moving Costs: The University is required to report as additional income to the individual certain payments for moving allowances and travel costs associated with initial employment or termination. See Guide Memo 2.1.20: Relocation of Faculty and Staff.
(2) Unsubstantiated Cost: In accordance with the regulations of the Internal Revenue Service, the University will report, as additional income, the payment of any expense not substantiated by an appropriate itemized receipt or adequate explanation.
(3) Non-timely Submission: Absent exceptional circumstances, expenses submitted more than 60 days after completion of travel will be reported as additional income to the individual, in accordance with Internal Revenue Service guidance.
Payment for reimbursements may be made via the following delivery options:
A fee will be charged to cover the extra cost of preparing and handling “Rush” payments.For more information on payment types and processing payment times see Resources & Job Aids: Payment and Handling Methods and Processing Times.
Questions regarding travel policy and procedures may be directed to the Buying and Paying Support Center.
SLAC travelers who have questions should contact the SLAC Travel Manager.
c. Online Information
This Guide Memo outlines policy on reimbursing individuals for expenses incurred on the University's behalf.
The policy applies to all individuals who incur expenses in the conduct of official University activities.
a. Reimbursable Expenses
The University authorizes reimbursement of reasonable and necessary expenses incurred by individuals in the conduct of official University activities. Both the person who incurs the expenses and the person who approves reimbursement or University payment of expenses are responsible for ensuring that all requests submitted relate to University business, are eligible for reimbursement, and that the expenses are reasonable and necessary. For purposes of determining economical purchases, the price paid by the individual is compared with the price that would have been paid by the University in a similar situation. When the price paid by the individual exceeds that which would have been paid by the University, the lesser amount will be reimbursed.
The following are reimbursable expenses:
(1) Retail purchases of supplies, books, and other low-cost items. These items are the property of Stanford University, as are any reimbursable purchases. Guidelines for petty cash reimbursable purchases can be found in Administrative Guide Memo 5.4.4: Petty Cash Funds, section 3.
(2) Travel expenses and expense associated with professional meetings are authorized within the policies and limitations established by the University and by specific sponsored project or agency regulations. University travel policies are in Administrative Guide Memo 5.4.2: Travel Expenses.
(3) Business meals may be reimbursed when:
Documentation of business meals must include:
Business meal expense guidelines are available at Expense Guidance for Business Meals.
(4) Expenses incurred by University employees on behalf of others, either employees or non-employees, may be paid from University funds if the expenditures have a direct connection with University functions and purposes.
(5) Expenses for official University purposes incurred at the Stanford Faculty Club and billed to members may be reimbursed, subject to the regular reporting and approval requirements.
(6) Reasonable expenses for improvement of working conditions, employer-employee relations, and employee performance are appropriate. Examples of items in this classification include in-house publications and employee morale activities such as a holiday party, summer picnic, anniversary celebration or retirement party. It is important to identify in the Oracle Financials expense report the purpose of employer-employee relations expenditures and the names of individuals or groups involved.
(7) Materials purchased for the department by a student (where the materials will belong to Stanford, and not to the student) may be reimbursed to the student. Payments to help a graduate student or postdoc pay education-related expenses, other than travel expenses, will normally be considered to be student support, and not a University business expense. As such, these kinds of payments should be processed as a stipend in GFS. This includes money to buy books or other materials that the student will use and keep. For more guidance please refer to Graduate Academic Policies and Procedures Document 7.2, Fellowships and Other Stipend Support.
b. Sources of Funds for Expenses
Expenses may be paid personally and reimbursed by the University, or by charging the expense and submitting an invoice for payment. Most minor expenses should be reimbursed from petty cash (see Administrative Guide Memo 5.4.4: Petty Cash Funds. Occasionally, it may be necessary to receive an expense advance for unusual transactions (see Administrative Guide Memo 5.4.1: Expense Advances).
c. Non-reimbursable Expenses
The University does not allow reimbursement for costs incurred for amusement, social activities, or entertainment [however, see sections 1.a(4) through (6)]; Stanford Faculty Club dues for individual members; social or travel club dues; University parking permits for employees or students; traffic citations for either personal or University vehicles; personal services or personal purchases; interest charges for late payment of bills; purchases of carbon offsets or carbon credits; or any costs specifically disallowed by school or department policy.
d. Capital Purchases
There are a number of special requirements for purchasing capital equipment, as well as for recording its purchase, whether or not the equipment is charged to a government grant/contract, a gift fund or general funds. To ensure that these requirements are met, capital equipment must be purchased using a Purchase Requisition (see Administrative Guide Memo 5.3.1: Requisition Processing). No employee or non-employee will be reimbursed for the purchase of a capital item. This includes payments for individual components that together constitute a piece of capital equipment. The only exception is the use of petty cash for small fabricated parts where the Fabrication Number is included on the Petty Cash receipt and on the Petty Cash Reimbursement Request (see Guide Memo 5.4.4: Petty Cash Funds). Any exceptions to this policy must be granted in advance by a director in Procurement (or designee).
Administrative Guide Memo 5.4.2: Travel Expenses contains basic policy for reporting expenses. Although Guide Memo 5.4.2 is stated in terms of travel and travelers, the policies apply equally to other expenses and those incurring the expenses. Expenses must be reported in a timely manner. Absent exceptional circumstances, expenses submitted more than 60 days after they are incurred will be reported as additional income to the individual, in accordance with Internal Revenue Service guidance.
This Guide Memo outlines policy on establishing and managing a petty cash fund.
The Office of the Treasurer is responsible for approving all Petty Cash Fund account requests. In general, the use of petty cash funds are discouraged and departments are strongly encouraged to use the Department Purchasing Card (P-Card) or the Oracle Financials Expense Requests system whenever possible.
The purpose of a Petty Cash Fund is to allow for the reimbursement or purchase of minor, unanticipated business expenses when the University's present procurement system is not cost effective and when the dollar amount is low.
The University has three types of Petty Cash Funds:
a. Petty Cash Fund
Petty Cash Funds are established for departmental use for incidental and emergency small-dollar purchases where the use of alternative means (e.g. P-Card) is not feasible. Reimbursement for properly approved expenses may be obtained directly from this fund. The size of a Petty Cash Fund will be determined by the business needs of the requesting department, and, unless special written approval is obtained from the Treasurer, a single fund will be limited to no more than $500 in cash on hand.
b. Petty Cash Checking Account
Petty Cash Checking Accounts may be established in departments that make small disbursements by mail (e.g. purchase of subscriptions), or must make immediate payment (e.g. C.O.D. (cash on delivery) payment for goods delivered by UPS). The size of a Petty Cash Checking Account will be determined by the business needs of the requesting department, and, unless special written approval is obtained from the Treasurer, a departmental Petty Cash Checking Account will be limited to no more than $2,500.
c. Change Fund
Change Funds may be established by a department and used to give change to customers when they are paying for goods and/or services and is reconciled daily. The size of a Change Fund will be determined by the business needs of the requesting department. A written request with the details of the business needs must be submitted to and approved by the Treasurer.
a. When Petty Cash May be Used
Reimbursements from petty cash are authorized for purchases and expenditures up to $100 per transaction. Allowable uses:
i. Delivery charges, minor office supplies needed for department operation and postage, totaling less than $100;
ii. Local transportation (e.g. taxi), parking and bridge tolls, totaling less than $100, that may arise as part of a day trip on official University business;
iii. Necessary and reasonable food (such as sandwiches and beverages) brought into the office for business meetings, totaling $100 or less, including tax, delivery and tip.
Special rules apply for the reimbursement of alcoholic beverages:
Alcoholic beverages: Purchases of alcoholic beverages may not be reimbursed by the federal government, either directly on a contract or grant account, or indirectly through the indirect cost rate calculation. When alcohol is served as part of a business meal, the restaurant receipt must identify the amount charged for the alcoholic beverages. List the alcohol amount, plus sales tax and tip, separately on the reimbursement documentation, charging the expenses to the appropriate unallowable expenditure type. If the supporting documentation for a meal is not itemized, then the receipt must note either “No Alcohol” or state the cost of any alcohol that was included in the purchase.
b. When Petty Cash May Not be Used
Petty cash may notbe used for:
c. Accounting Accuracy
Reimbursement for petty cash must be the exact amount of the expense. Splitting one transaction in excess of $100 into several parts, or requesting reimbursement of less than the full amount of the expense is specifically not allowed.
a. One Petty Cash Fund Per Department
Unless the department is very large or geographically dispersed, a single petty cash fund per department is usually adequate for all its petty cash transactions. Reimbursements from one petty cash fund may be charged to any type of account (PTA) including sponsored projects. If more than one petty cash fund is needed, a written justification must be submitted to and approved by the Treasurer.
b. Size of a Petty Cash Fund
In addition to the fund limits set forth in sections 2 (a), (b) and (c) above, a petty cash fund should be established at a reasonable level based on the department's business needs. The fund level should be reassessed annually and modified as needed based on the volume of activity during the year.
c. Petty Cash Custodian
The department head must appoint an individual to be custodian of the department's petty cash fund. Petty cash custodians must be salaried employees of the University, and may not be undergraduate students, graduate students or temporary personnel. Custodians are required to complete Petty Cash Training and pass the associated certification test. The custodian remains accountable for the petty cash fund until another person is officially designated as the new custodian or the fund is closed.
d. Establishing, Changing or Closing a Petty Cash Fund
Department heads may request a new petty cash fund, an increase or decrease in an existing fund, or cloure of an existing fund by sending a request to the Financial Support Center (email@example.com or 3-2772) and Cash Management (firstname.lastname@example.org) in the Office of the Treasurer. Specifics of the request should include:
i. Establishing a New Petty Cash, Petty Cash Checking or Change Fund
The request should include:
ii. Requesting an Increase or Decrease to a Petty Cash Fund
The request should include:
iii. Closing a Petty Cash Fund
The request should include:
Note: For more information, please refer to sections 7(a) and 7(b).
a. Assignment of Petty Cash Funds to Custodian
Following certification that the identified custodian has successfully completed the petty cash training and passed the associated certification test, the Petty Cash Administrator will assign a Petty Cash Fund number to the new fund. This custodian must use this number in all transactions relating to this fund. The custodian remains accountable for the petty cash until another person is officially designated as the new custodian or the fund is closed.
b. Protection of Petty Cash
The petty cash custodian is responsible for managing the department's petty cash fund and should be the only person in the department to have access to the locked petty cash box and to disburse actual cash. To prevent access by anyone but the custodian, petty cash should be kept in a locked box in a desk or cabinet that is locked whenever the custodian is absent. Only the custodian should have access to the keys.
c. Loss or Theft of Petty Cash
In the case of theft or mysterious disappearance, the Stanford Police and the Office of the Treasurer must be notified as soon as the loss is discovered. A copy of the police report should be included with the petty cash receipts when reimbursement is requested.
d. Reconciliation and Replenishment
The custodian is also responsible for the reconciliation and replenishment of the Petty Cash Fund. The frequency of reconciliation depends on the type of fund:
i. Petty Cash Fund
A department Petty Cash Fund must be reconciled and replenished on a monthly basis. The reconciliation should be done at the time of replenishment and a "Petty Cash Reconciliation Form" must be completed and signed by the department head. The department head may designate, in writing, the ability to approve the monthly reconciliations to someone other than him/her self (but it may NOT be the custodian). These monthly reconciliation forms should be kept in departmental files and made available to the Petty Cash Administrator if requested during an on-site audit.
ii. Petty Cash Fund Checking Account
A Petty Cash Fund Checking Account must be reconciled and replenished on a monthly basis and a "Petty Cash Checking Account Reconciliation Form" must be completed and signed by the department head, or an authorized check signer for the account, but not the custodian. These monthly reconciliations, along with a copy of the most recent bank statement, must be submitted to the Petty Cash Administrator each month.
iii. Change Fund
A Change Fund is used exclusively for making change, it must be reconciled on a daily basis. Any records should be kept in a departmental file and made available to the Petty Cash Administrator if requested during an on-site audit.
e. Annual Confirmation of Petty Cash Funds
The Office of the Treasurer conducts an annual confirmation of balances for all Petty Cash Funds and Change Funds. In August of each year, the Petty Cash Administrator will send out the request for the Annual Confirmation of Petty Cash Funds to all custodians, along with the"Annual Petty Cash Reconciliation Form. The custodian must reconcile the account and fill out the form. The department head MUST sign the annual confirmation form, not their designee. The annual reconciliation form will also include an "Ongoing Practices Statement" that must be acknowledged and signed by the custodian. Since monthly reconciliations are submitted for all Petty Cash Checking Accounts, the custodians do not need to complete the annual confirmation request.
f. Periodic On-Site Audits of Petty Cash Funds
The Office of the Treasurer will conduct several on-site audits of selected department Petty Cash Funds, Petty Cash Checking Accounts and Change Funds each year. The funds will be selected randomly and the custodian for the selected fund(s) will be notified and an appointment to conduct the audit must be made within 72 hours. For an audit, the custodian will need to provide the auditor with copies of their monthly reconciliations, reimbursement receipts showing the types of reimbursements being made with the fund, and provide evidence that the fund is being stored securely when not in use.
g. Mishandling of Petty Cash Funds
Failure to properly safeguard, reconcile and administer petty cash funds may lead to revocation of the petty cash fund from the department and/or disciplinary action up to and including termination.
a. Absences of the Custodian:
i. Brief Absence: If the absence will be less than two weeks, the fund should be secured and no reimbursements should be allowed during the absence. During an absence or vacation that will last more than two weeks, a custodian may place the petty cash fund with a temporary, certified custodian. The temporary custodian must complete the petty cash training and pass the associated certification test before assuming the responsibility of the fund. The temporary and regular custodian will need to reconcile the fund at the time of transfer, as well as upon the return of the regular custodian. Both the temporary and regular custodian are required to sign the reconciliation forms.
ii. Absence During Which Fund Needs Replenishing: A temporary custodian may not replenish a petty cash fund. The fund must be replenished before the regular custodian's absence. If a regular petty cash custodian's absence will last more than one month, a new custodian will need to be appointed by the department head, following the steps in 6(b).
b. Change of Custodian
The department head may transfer the petty cash fund to a new custodian at any time. The new custodian must complete petty cash training and pass the associated certification test before assuming responsibility for the fund. The fund must be counted and reconciled prior to transfer. Except on a temporary basis described in paragraph 6 (a) (i) above, one custodian may not transfer a fund to a new custodian. The petty cash fund must be in balance before the new custodian accepts it.
c. Accounting for Petty Cash Transactions
Proper accounting for petty cash requires that custodians make payments for authorized expenditures only, obtain receipts, and record expenditures.
Note: There must be a sales slip, cash register tape, or other receipt attached to a Received of Petty Cash form for each expenditure. The only exception is reimbursement for mileage where a log with odometer readings, date, destination and business purpose serves in lieu of a receipt. When a receipt is not available, it must be indicated when requesting replenishment in the Expense Requests system. The Received of Petty Cash form must be signed by the person being reimbursed and approved by someone who has signature authority for the account (PTA) charged. The approver may be the custodian of the petty cash fund, except that the custodian may not approve his/her own expenses and may not approve expenses for an individual to whom he/she reports either directly or indirectly.
d. Balancing Petty Cash Funds
When reimbursements by the custodian deplete the amount of cash, receipts are totaled to account for the expenditures and keep the petty cash fund in balance. At any time, the total cash on hand plus the total receipts and reimbursement requests in process should equal the original amount of the petty cash fund. If the fund does not balance, contact the Financial Support Center (3-2772) for assistance. A petty cash fund should always be balanced before a request is made for replenishment.
e. Replenishing Petty Cash Funds
The Petty Cash Reimbursement request must be reviewed and approved by a person who has online signature authority for the departmental accounts (PTAs) to be charged (see Guide Memo 3.2.1: Authorizing Expenditures). This person could be the department head and must be someone other than the custodian or someone who reports to the custodian. The approver may not approve his/her own expenses and may not approve expenses for an individual to whom he/she reports either directly or indirectly.
ii. Check Printing
Replenishment checks are sent to the custodian. If special handling or "Will Call" service is requested, a special handling fee will be charged.
iii. Cashing of Replenishment Checks
The preferred bank is Stanford Federal Credit Union and special arrangements have been made with the credit union to cash replenishment checks as long as the payee has a Stanford Identification Card.
f. Reports of Petty Cash Expenditures
Petty cash expenditures are reported to departments on their monthly expenditure statements by account number (PTA) and expense classifications.
This policy should be read in conjunction with the following related policies and procedures:
a. Petty Cash Fund Administration and Procedures
b. Petty Cash Fund Checking Account Administration and Procedures
c. Guide Memo 3.2.1: Authorizing Expenditures
d. Guide Memo 5.4.3: Reimbursement of Expenses
a. Petty Cash Monthly Reconciliation Form
b. Petty Cash Checking Account Monthly Reconciliation Form
This policy statement supports a plan to increase opportunities for minority, women and disabled people, and businesses owned by them, to participate in economic opportunities arising from University business activities.
Stanford University is committed to increasing significantly the opportunities for minority, women and disabled people to engage in business with the University.
This policy statement supports a long-range plan to enhance Stanford's external affirmative action. The plan serves to promote diversity through the judicious use of the University's financial and other resources to increase opportunities for small businesses and businesses owned by targeted concerns to participate in economic opportunities arising from University business activities.
The classes covered by this policy, as defined by the Federal Government, include Asian, Black, Latino/Hispanic and Native American, women of all racial/ethnic background, people who are disabled or physically challenged, veterans, and other targeted concerns.
The President and Provost will provide the leadership for promulgating this policy; however, responsibility for its implementation rests with individual vice presidents, deans, directors of major institutions and centers, the Chief Executive Officer of the Stanford Management Company, and the heads of other organizations not covered above.
Public Law 95-507 and Executive Order 12138 encourage organizations that receive contracts from federal agencies to do business with small businesses and other targeted concerns regardless of size. The University's responsibilities under these laws are described in detail in the document "Utilization of Small Business Concerns, Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged Individuals, and Women-Owned Business Concerns," which is published in the Procurement Manual. Specific questions as to applicability to particular situations should be addressed to the Office of Sponsored Research.
The Small Business Administration (SBA) defines the members of these groups. An updated listing can be found online at the U.S. Small Business Administration website.
b. Contracts Affected
(1) Contracts between $25,000 and $499,999
Terms of government contracts over $25,000 in value require the University to have a program to insure business opportunities for small and minority owned businesses. Stanford's External Affirmative Action Program meets that requirement.
(2) Contracts $500,000 and over
For contracts of $500,000 or more, a specific plan must be made and implemented. A Small Business Liaison Officer (a Stanford-designated University official) oversees the operation of the plan. The University is responsible for establishing percentage goals of subcontracting business (expressed as a proportion of total subcontracting dollars) to be awarded to small and small disadvantaged suppliers. For assistance or information on goals required by specific agencies, contact the Office of Sponsored Research (OSR).
(1) Preparing the Subcontracting Plan
When a request for a subcontracting plan is received froman agency, OSR notifies the cognizant department and Procurement. Procurement and the department meet to review product and service areas with subcontracting opportunities, and based on this review, determine reasonable goals for the plan. Procurement submits data for the plan to OSR. Procurement then writes the subcontracting plan and submits it to the government agency.
(2) Vendor Search
Departments must investigate small and disadvantaged business possibilities prior to submitting a requisition. Departments that wish further searching to be done by Procurement should so specify in the "Remarks" screen of the requisition, and should attach documentation of the department's search efforts and their results.
The federal government requires periodic reports on progress toward the achievement of goals set in a contract's original subcontracting plan. Procurement prepares reports of purchases under each contract, and notifies departments of progress against goals.
To help departments, Procurement maintains small business directories and other resources. All the directories are commodity-indexed. Call Procurement for copies and information.
b. Online Access to Supplier Information
Online information about vendor size, ownership status and products offered is available to departments in the Oracle Financials system. Procurement Buyers are also available to assist with sourcing needs.
c. SBA CCR System
The Small Business Administration has developed a computerized, commodity indexed database of small businesses. Call Procurement for more information. Procurement maintains links to this and other resources on the Gateway to Financial Activities website.