05.001 Discretionary Trust Funds Spending Policy

Vice Chancellor for Business Affairs

Updated July 1, 2024; effective July 27, 2005

• 05.159 Purchase of Gifts for Employees
• 05.107 Business-Related Entertainment Expenditures
• 08.350 Non-Salary and Deferred Compensation Policy
• 05.102 Establishment of University Banner Fund
• Basic Spending Guidelines

Policy Details:

1. Purpose

   The university hereby adopts this discretionary trust funds spending policy to ensure that the university carries out its mission effectively, while ensuring that fiscally, legally, and politically sound spending practices are followed.

2. Scope

   Discretionary funds, those funds that are not budgeted to be used for some specified purpose, can be used to meet a broad range of university needs.  These funds are derived from unrestricted, undesignated gifts made to the university, donor-restricted gifts initially made to university endowment where earnings allow discretionary spending, and university-level income earned on non-general fund sources.  Other types of revenue are not permitted to be transferred to funds designated as discretionary funds. The flexibility that is associated with discretionary funds is vitally important to the university.  At the same time, expenditures of discretionary funds must be consistent with several general guidelines as set out below.

   1. Each expenditure of discretionary funds must be for a valid university business purpose that is consistent with the university's mission and expectations. These expenditures (whether meals, travel, lodging, entertainment, official functions, gifts and awards, or memberships) must follow all university policies that apply to that type of expenditure and must be accompanied by appropriate documentation including receipt(s), purpose, date, location, and names of persons involved.

   2. The very flexibility associated with discretionary funds means that determining the appropriateness of some expenditures will require judgment. In these cases, the prudent person test applies. The individual making the decision about the expenditure, referred to as Budget Authority, must be comfortable with the prospect that the specific expenditure would come under the scrutiny of individuals outside the university.  Refer to university policy 05.102 Establishment of University Banner Fund for the definition of Budget Authority.

   3. A Budget Authority should only choose to use a discretionary fund after carefully considering if a more restricted funding source would be appropriate.  It would be fiscally prudent to preserve discretionary funding as it is a more flexible funding source.
      
      
   4. Expenditures that provide a personal benefit to the individual authorizing the expenditures are not allowable. However, expenditures that are authorized by one individual to be received by another are allowable for items such as a retirement gift or an employee award (see university policy 05.159 Purchase of Gifts for Employees).
      
      

   5. Use of discretionary funds for donations or contributions third party organizations, including non-profit organizations, is not permitted.
      
      

3. Policy

   1. Expenditures that are permitted include but are not limited to the following:

      1. Entertainment expenses for university business (see university policy 05.107 Business-Related Entertainment Expenditures)

      2. Departmental gathering and retirement celebrations

      3. Convenience items for employees such as refrigerators, microwaves, and coffee makers which are located in a central location and available for all to use

      4. Traditional commemorations for the illness or death of an employee or family of an employee (see university policy 05.159 Purchase of Gifts for Employees)

      5. Personal moving allowance (see university policy 05.106 Moving Allowance)
         
         
      6. Graduation regalia expenditures for employees when it is part of their official university responsibilities to attend graduation
         
         
      7. Event sponsorship
         
         
      8. Institutional sponsorship
         
         
      9. Business-related membership dues or professional certification costs
         
         
      10. Student scholarships if permissible in the associated fund establishment document for the funding source

           

   2. Expenditures that are not permitted include but are not limited to the following:

      1. Memberships in non-job related professional societies

      2. Travel related:

         1. Airline travel clubs
         2. Business class airfare (unless purchased for an international flight)
         3. Family members
         4. First class airfare
         5. Health club memberships
         6. Hotel amenities (movies, etc.)
         7. Optional conference events when not related to university business (amusement park excursions, etc.)
         8. TSA fees

      3. Non-business entertainment

      4. Non-business travel
         
         

      5. Payment of fines or parking tickets

      6. Purchase of clothing and other personal items not related to university business