As the flagship institution of higher education for the Commonwealth of Kentucky, the University of Kentucky is held to a high level of accountability for its business practices. Every reasonable effort must be made to ensure that funds are used in a responsible and appropriate manner. Certain types of expenditures require caution; these expenses have been categorized and entitled discretionary expenditures. This Discretionary Expenditure Policy ensures that expenditures in these categories only occur when necessary and appropriate.
The source of funds to support discretionary expenditures is generally private donations.
Additionally, there are certain self-supporting activities within the University that charge registration or other fees to specifically support discretionary (entertainment) type expenditures. For these activities, the segmented portion of the registration or other fee income related to these special activities may be moved to a self-supporting discretionary cost object, provided approval for moving the funds is obtained from the Provost or appropriate Executive Vice President, or their designee. The Dean/Director responsible for oversight of the self-supporting activity would prepare a letter to the Provost or appropriate Executive Vice President requesting the fund transfer and attach supporting documentation to explain how the amount requested was determined. Additionally, a journal entry to move the funds or a budget transfer form would need to accompany the letter.
Categories covered by this policy must be paid using the Payment Request Document (PRD), purchase order (PO) or the procurement card. See the Purchasing/AP Quick Reference Guide for the allowable payment types for each category. Additional resources include the following BPMs: B-3-2-2 Payment Request Document (PRD), B-3-3-4 SAP Purchase Requisitions Healthcare and Facilities Areas, B-3-3-5 SRM Shopping Carts – Campus Area, and E-7-16 Procurement Cards.
The University is allowed to reimburse or pay for expenses that are necessary and reasonable. A necessary expense is one where there exists a clear business purpose.
When expenditures include the purchase of food, the supporting documentation must include an itemized receipt which includes the time, place, and date of the purchase; a description of the business purpose; and a list of attendees, regardless of the funding used.
To establish a clear business purpose the expenditure must contain all information necessary to substantiate the expenditure. Categories of expenses covered by this policy are as follows: