1227 - University of North Carolina at Chapel Hill Policy on Unauthorized Purchases

Title

University of North Carolina at Chapel Hill Finance Policy 1227 - Policy on Unauthorized Purchases

Introduction

Purpose

This policy is to ensure that all purchases of goods or services made by faculty and staff at the University of North Carolina at Chapel Hill ("UNC-Chapel Hill" or "University") comply with North Carolina law (§ 143-58) as enacted by the legislature and implemented by the State Department of Purchase and Contract. It violates North Carolina law (§ 143-58.1) and University policy for the University to reimburse an individual for any merchandise or service acquired for their own personal benefit.

Scope of Applicability

This policy applies to all University faculty and staff.

Policy

Policy Statement

All purchase contracts entered into on behalf of the University are the exclusive responsibility of the University's Department of Procurement Services and Materials Management. Additionally, all expenditures of University funds for goods and services must adhere to the regulations established by the North Carolina State Legislature and enforced by the Office of State Budget Management (OSBM). These funds are managed at the University by the Department of Accounting Services, which is required to monitor, approve, and report all expenditures to OSBM monthly. The Purchasing Services division of Procurement Services processes the purchases of all goods and services except for those listed in the Exclusions section below.

The University has multiple procedures for procuring goods and services, eliminating the need for individual faculty, staff, and students to expend their personal funds. If Purchasing Services deems a purchase unauthorized, the department will be notified and must complete the associated Unauthorized Commitment form (Finance Form 1227.1.1.f) linked to this policy below.

This form gives the department an opportunity to:

  • explain the circumstances that led to the unauthorized commitment,
  • prescribe a corrective action plan to prevent future occurrences, and
  • notify the appropriate Campus Finance Lead of the infraction.

This form and associated supporting documentation provide the purchaser with all information necessary to define the commitment and justify the purchase. Purchases charged against University funds not made in accordance with University policies as stated in the Finance Policies and Procedures Manual may be the personal responsibility of the individual placing the order.

Exceptions

  1. Purchases that fall under University Finance Policy 1251: Small Order Policy.
  2. Rental or purchase of real property administered through the University Property Office.
  3. Construction projects administered through the Facilities Planning Office.

Additional Information

Frequently Asked Questions

Q: I am a researcher here on campus with my own grant money. Why can't I spend it as I choose? Why do I have to go through Purchasing Services for permission?

A: All funds received by the University are considered the property of the University and are subject to State purchasing regulations.

Q: I accepted a piece of equipment for evaluation, and now the vendor wants to be paid. The cost of the equipment is $26,000. Why is this considered an unauthorized purchase?

A: Any equipment brought onto campus must first have an established purchase order specifying the evaluation/purchase terms and conditions. See University Finance Policy 1278: Policy on Departmental Evaluation of Equipment.

Q: I ordered some equipment online and didn't realize that the shipping and handling charge would make the order exceed the Small Purchase Benchmark as defined in University Finance Policy 1251: Small Order Policy. Is it necessary to do a requisition now that I have placed the order and received the items?

A: You must submit a requisition to pay for the equipment and include an explanation. When placing orders, you must consider all charges to ensure that the overall cost will not exceed the Small Purchase Benchmark.

Q: If my dean or director ordered me to purchase equipment, why is this considered an unauthorized purchase?

A: The rules and regulations of the State of North Carolina require the purchasing division of a state agency to handle the procurement for any order in excess of the Small Order Benchmark.

Q: Can we buy flowers for a staff member of our department to congratulate their newborn baby?

A: No. Flowers for employee life events are a personal expense and cannot be paid from University funds.

Q: I have a professor who wants the University to purchase Google Glass for their research. How do I purchase this?

A: Google Glass is considered a personal device, so the University cannot purchase it.

Q: A professor in my department/school purchased a laptop computer for work at an Apple store using their personal funds. Is this purchase allowed since the professor did not buy the laptop with University funds?

A: No, this type of purchase is not allowed because the professor did not purchase the laptop using the appropriate procurement process for work-related purchases. Additionally, the purchaser is not eligible for a University discount and will not receive a reimbursement for sales tax.

Q: May I be reimbursed for parking while I work at the University?

A: No, purchasing a permit to park at the University or paying for parking elsewhere is not required as a condition of your employment.

Q: I am required to attend a conference on behalf of the University, which requires me to wear business attire each day for seven days. I need to purchase new clothes and wish to be reimbursed since I have no choice about the trip. May I be reimbursed?

A: No, clothing purchases are personal expenses since the University derives no benefit from them and does not take ownership of the clothing.

Q: I am required to maintain an office in my home; may I be reimbursed for a portion of my utility bills and a portion of my mortgage for the square footage?

A: No.

Q:  May an employee be reimbursed for home Internet expenses?

A:  No, this is a personal expense. The state budget manual allows for Internet connectivity while traveling but not from home. However, this reimbursement will be allowable if a dean believes that reimbursement is permissible due to health reasons or if the employee's regular on-campus workspace has been temporarily unavailable (such as in a remodel). The dean must attach a memo to every voucher justifying this reason specific to the individual and stating the time period permitted.

Related Requirements

External Regulations and Consequences

University Policies, Standards, and Procedures

Contact Information

Policy Contact

Subject: Unauthorized Purchases/Reimbursements

Contact: Purchasing Services

Telephone: 919-962-3774

Fax: 919-962-0636

Email: purchasing_team@unc.edu

History

Revised:

  • May 10, 2022
  • January 19, 2022
  • March 16, 2020
  • February 28, 2018
  • June 28, 2016: Added FAQ about home Internet expenses.
  • December 11, 2015: Clarified information in the FAQ section about parking purchases.
  • October 1, 2014: Revised naming of requisitions.
  • August 10, 2014: Added information to Policy Statement about reporting to OSBM; added to FAQ section.
  • March 27, 2014: Added information in FAQ section about personal purchases for work purposes.
  • January 29, 2014: Added information in FAQ section about purchase of Google Glass.
  • January 26, 2012
  • July 12, 2010
  • November 12, 2003