THE UNIVERSITY OF IOWA FINANCIAL SUBCERTIFICATION WORKSHOP SESSION

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THE UNIVERSITY OF IOWAFINANCIAL
SUB-CERTIFICATION WORKSHOP SESSION 3
Purchasing, Travel Resource Usage

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Todays Presenters

• Selina Martin (Controllers Office)
• Debby Zumbach (Business Services)

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Introduction

• Financial Sub-certification Website
• http//www.uiowa.edu/budgetofficers/subcertificati
  on
• Objective of todays training
• Review questions 10 11
• Review the underlying policies processes
• Identify related control document which indicate
  compliance with policies
• Identify the resources available to learn more
• Understand risks consequences of non-compliance
  Relevance to Sub-certification
• What should you do after this workshop?

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Sub-certification Question.

• Does the college/unit follow practices which
  help to ensure understanding and compliance with
  policies regarding use of University resources as
  set forth in the Operations Manual?

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Related Policies

• Technology Allowance
• http//www.uiowa.edu/our/opmanual/v/11.htm1123
• Private Use of Public Property
• http//www.uiowa.edu/our/opmanual/v/12.htm1210
• Acceptable Use of IT Resources
• http//www.uiowa.edu/our/opmanual/ii/19.htm

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Technology Allowance Policy

• IRS considers communication devices and internet
  to be an employee fringe benefit.
• Usage of University property, cell phone and/or
  internet access for personal use is a taxable
  benefit to the employee.
• Review of cell phone calls revealed excessive
  personal calls.
• Created a risk for the Universitys Accountable
  Plan.

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Responsibility of Departments

• Stipend for all eligible employees
• Define portion to be covered as business expense
• Eliminated the administrative burden of keeping a
  log.
• Management of the exceptions to the policy
• Identifying an exception.
• Employees must maintain a log of incoming and
  outgoing calls.
• Log must be verified monthly.
• Personal calls reimbursed.

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IRS Hot Topic

• University of California IRS Audit
• IRS found their accountable plan was
  non-accountable.
• UCLA negotiated to pay taxes on 25 of the cell
  phone expense for 2 calendar years
• Other IRS audits are occurring
• Many higher education institutions are converting
  to stipend policy.
• IRS has no de minimis for personal calls.

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Policy on Private Use of Public Property

• http//www.uiowa.edu/our/opmanual/v/12.htm1210
• We cannot use automobiles, machinery, equipment,
  or any other property owned by the state for
  private purpose.
• We cannot directly or indirectly make use of the
  purchasing power of the State of Iowa.

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Policy on Acceptable Use of IT Resources
http//www.uiowa.edu/our/opmanual/ii/19.htm

• Purpose Protecting the security of our
  computing resources, information, and our user
  accounts.
• Scope
• Applies to all users of University (and UIHC)
  information technology resources
• Includes all systems and networks, including
  personal devices

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Policy on Acceptable Use of IT Resources

• Use "safe computing" practices by establishing
  appropriate access restrictions for accounts,
  guarding our passwords, and changing passwords
  regularly.
• Implement maintain computer security in accord
  with UI policies and best practices
• Maintain backups and recovery systems in
  accordance with disaster recovery guidelines and
  record retention requirements

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Policy on Acceptable Use of IT Resources

• Legal and ethical uses
• Respect for privacy and intellectual property
  rights, but privacy is not absolute.
• Legal requests (subpoena, court order)
• FOIA requests
• Iowa Ch. 22 (open records) requests
• Internal policy violations, misuse
  investigations, security incident response

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Acceptable Use of IT Resources

• User Responsibilities
• Adhere to data access policies (accessing
  restricted information without permission or need
  to know is prohibited)
• Adhere to software licenses
• Avoid excessive personal use refrain from
  prohibited personal uses (ex commercial use,
  political campaigning)
• Obey external laws, all other UI policies (ex
  harassment)
• Report policy violations to supervisor or IT
  Security Office (sanctions are handled by
  existing processes for faculty, staff, and
  students)

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What control documents indicate compliance?

• Request for Technology Allowance Form
• Documentation of long distance phone charge
  review
• Access codes/restrictions for copy machines
• Exit interview checklist to ensure University
  resources are maintained
• Documentation of timely terminations in system
• Access restrictions for financial HR
  applications

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What resources are available to learn more?

• Technology Allowance Policy FAQs
• http//www.uiowa.edu/fusap/ap/Documents/TechAllow
  PolicyQs.pdf
• Request for Technology Allowance Form
• http//www.uiowa.edu/eforms/ap/Request_for_Techno
  logy_Allowance.pdf
• ICON Course IT Security Awareness Training
• http//www.uiowa.edu/learn/catalog/workplace/sec.h
  tml
• IT Security Best Practices
• http//cio.uiowa.edu/ITSecurity/bestprac/

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Sub-certification Question.

• Does the college/unit follow practices,
  including monitoring activities, which help to
  ensure compliance with University purchasing
  policies, travel policies and procurement card
  policies?

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Related Policies

• Policy on Travel Regulations
• http//www.uiowa.edu/our/opmanual/v/22.htm
• Policy on Purchasing
• http//www.uiowa.edu/our/opmanual/v/11.htm1122
• Conflict of Interest in Purchasing Policy on
  Purchases from University Faculty or Staff
• http//www.uiowa.edu/our/opmanual/v/11.htm1114
• Policy on Contracting Authority
• http//www.uiowa.edu/our/opmanual/v/06.htm
• Policy on Delegation of Signature Authority
• http//www.uiowa.edu/our/opmanual/v/07.htm73
• Procurement Card Policy
• http//www.uiowa.edu/purchase/PCard/procurement/m
  anual/PCtoc.html

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Travel Pcards

• Trip dates
• Meals submit actual expense 55/20 limit
• Hotel per diem conference site review
• Car Rental use National
• Expense Reimbursement submit within 120 days of
  return
• Cash Advance clear within 120 days after return

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Travel Approval Requirement

• Secure approval prior to travel

• Departments must either use ProTrav trip approval
  or develop their own process.
• Departments are not obligated to pay for travel
  if it is not approved in advance.
• Departments may set their own travel policy that
  is more restrictive.
• Requires supervisor (or higher authority) approval

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Business Purpose Justification

• Is there justification for travel?
• Could the meeting take place with a conference
  call to save the University money?
• Does the meeting involve vendors with which the
  University does business?
• Why is a third party reimbursing this travel?
• Is the travel relevant to the Universitys
  mission?

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Mileage Review

• Motor Pool vehicle versus personal vehicle
• Are the miles reasonable?
• Can the trips be driven in the time period
  stated?
• Are they making multiple trips to the same
  destination more frequently than necessary?

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Airfare

• Purchase coach class tickets 2 weeks in advance
  to get the best discount.
• What are back to back tickets and why are they
  not allowed?
• Purchase refundable tickets only when necessary.
• Use of frequent flyer miles for upgrades
  personal use of frequent flyer miles acquired on
  business.
• Are the personal legs of travel noted?
• Exchange ticket fees Is the exchange justified?
• What are consolidator tickets?

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Trip Dates and Meals

• Trip Dates
• Are the departure and return dates reasonable?
• Does it include personal vacation days?
• Meals
• Are the meal costs actual expense or the listed
  per diem?
• Are conference meals excluded from reimbursement?
• When are business meals in travel status allowed

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Hotel

• Is the hotel over the allowable limit?
• Verify the hotel is the conference site.
• Are there personal charges on hotel folio?
• Shared room with others?
• Are the expenses paid on procurement card and
  claimed on travel voucher?

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Car Rental

• Is a car rental necessary?
• How many miles were used?
• Mandate use of National
• Upgrades and insurance not allowed.
• Additional driver charge

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Submitting Expenses Cash Advances

• Submit travel and cash advance within 120 days
  after return or expenses or advance is taxable.
• Encourage use of procurement card for expenses.

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Quiz.which of these are allowable?

• Travel to a professional association conference
  to give a speech.
• Travel to vendor site to review product or
  services.
• Travel to conference to give a speech about a
  vendor product.
• Vendor pays for travel to attend conference or to
  participate in research.
• Vendor gives money for department travel.
• Travel to a Vendors conference to give a speech
  about products the University uses.

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How should vendor payments be handled?

• Vendors may provide donations to the University
  for travel allowances.
• University must receive and control the gift and
  determine who will travel.
• Travel must be for official University business.

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Implications of Inaccurate Reimbursement

• Employees travel spend is reported to the Board
  of Regents annually.
• Travel expenses for UI frequent travelers are
  requested by the press annually.
• Annual travel audit by outside auditors
• Overpayment of expenses to employee
• Case of fraudulent employee travel

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Purchasing

• Purchasing Policy http//www.uiowa.edu/purchase/p
  urchase/Policy/Policyhome.htm
• Conflict of Interest http//www.uiowa.edu/purchas
  e/purchase/P_vendors/conflict_of_interest.htm
• Purchases from Faculty or Staff
  http//www.uiowa.edu/our/opmanual/v/11.htm1115
• Contract Authority http//www.uiowa.edu/our/opman
  ual/v/06.htm61
• Delegation of Signature Authority
  http//www.uiowa.edu/our/opmanual/v/07.htm73

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Top Ten Rules of Purchasing

• Competitive Bid Thresholds
• Professional Services Agreements
• Sole Source Purchases
• Contract Authority
• Board of Regents Agenda Approval for Capital
  Equipment
• Gift Law
• Employee Vendor Relations (Conflict of Interest)
• Un-Allowable Purchases
• Separation of Duties
• Maverick Purchases

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Competitive Thresholds

• Goods and services?
• Engagement of professional services?
• What is a formal bid?
• What is an informal bid?
• Is price the only factor?
• Understanding the difference between a RFQ, RFP,
  RFI, RFQual

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Professional Services

• Definition contract for unique, technical,
  and/or infrequent functions performed by an
  independent contractor qualified by education,
  experience, and/or technical ability to provide
  services.
• Professional Services Agreement Required by Iowa
  Code
• Review of Bills for Services

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Sole Source Purchases

• Which are justifiable Sole Source Purchase?
• Physician preference
• Compatible with existing equipment
• Neighbor recommended this vendor
• No other vendor can provide this product in the
  time required
• Used this vendor before and they provided quality
  service
• All other institutions participating in this
  research are using this vendor

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Contract Authority

• Contract language
• Liability for provisions
• Obligating the University
• Problems with contracts
• Terminating a contract

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Board Of Regent Approval

• True or False
• Executive Director at Board of Regents must
  approval all purchases over 250,000
• Board of Regents must approve capital equipment
  over 1M.
• Beware of departments splitting purchases between
  requisitions.

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Gift Law

• 2.99 is the maximum allowable gift
• Vendor gifts at RFP presentation
• Gift won at a conference
• Vendor gifts at holidays

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Employee Vendor Relations

• Require Board of Regent approval
• Definition of conflict
• Perception of relationship
• Self reporting
• Management plan
• Process for approval

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Employee Vendor Relation Examples

• Consulting payments
• Significant others company unrelated services
• Significant others company related services
• Start up company
• Employees company

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Unallowable Purchases

• Personal purchases
• Luxury Items
• Alcohol only certain funds
• Entertainment
• Personalized items
• Gifts for employees covered by bargaining
  contract
• Newspaper Test

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Proper Segregation of Duties

• Maintain clear separation of the following roles
• Requestor individual creating the requisition
• Receiver individual receiving the goods
• Invoice Entry individual in central Accounts
  Payable receiving and entering the invoice
• Statement Reviewer individual reviewing
  statement of account to ensure proper recording

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Maverick Purchases

• Utilize University contracts
• Utilize internal vendors
• Beware of repetitive purchase to vendors offering
  incentives
• Employees repetitive reimbursements for supplies
• Confirming orders
• Beware of time spent shopping

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P-Card Best Practice Before Purchase

• Know who your cardholders are
• Require training for reconcilers, not just
  cardholders.
• Be knowledgeable of transactions not allowed on
  card.
• Know the cardholders transaction and monthly
  spend limits.
• Ensure separation of duties for cardholder,
  reconciler and receiver
• Enforce safekeeping of card plate and card number
  - do not share card number.
• Promote preferred suppliers

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P-Card Best Practice During Purchase

• Obtain acceptable receipts and supporting
  documentation for review
• Beware of vendors who offer incentives
• When doing business online users should only
  utilize sites that are secure
• Be aware of scams. Discard any email
  communication solicitations from banks or other
  entities phishing for card information.

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P-Card Best Practice After Purchase

• Review return purchases to ensure credit is
  received
• Review personal purchases (used the wrong card)
• Review purchases with the appearance of
  personal nature
• Encourage timely review of transactions. Review
  delinquent vouchers immediately.
• Review split transactions attempts to bypass
  transaction limit.
• Utilize and promote departmental oversight/review
  of transactions through data review in the form
  of administrative reports/query available in
  ProTrav.
• See www.uiowa.edu/purchase/PCard/Documents/FO
  dataAppl.pdf for a request form to access these
  reports.

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ProTrav PCard Admin Role

• Summary of the new Pcard transactions in ORG or
  ORG/DEPT combo on a daily basis (by cardholder).
• List of new cards for ORG or ORG/DEPT combo
  during the past 60 days
• List of delinquent Procurement Card Voucher for
  ORG or ORG/DEPT combination
• Links to view cardholders transactions,
  vouchers, receipts, and card information for
  their ORG or ORG/DEPT combination.
• Reports of vendor spending, summary spend per
  cardholder, dept, and dollars spent.

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ProTrav Travel Admin Role

• List of Trips, Reimbursements, Advances for
  Travelers within ORG or ORG/DEPT combo.
• List of Trips, Reimbursements, Advances for
  expenses paid on ORG or ORG/DEPT combo.
• List of delinquent Cash Advances within ORG or
  ORG/DEPT combo.
• Reports of Travel spending, summary spend per
  traveler, dept, and dollars spent.
• Search function that allows search on travel
  related transactions by traveler within ORG or
  ORG/DEPT combo.
• Manual http//www.uiowa.edu/purchase/PCard/Docume
  nts/ProTravUpperLevelUserTrainDocument.pdf

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What control documents indicate compliance?

• Delegation of Signature Authority Form
• Sole Source Justification for Purchases
• Specific position responsibilities ensuring
  separation of duties for ordering and receiving
  of goods
• Specific administration role in ProTrav to view
  transactions, delinquent cash advances
• Receipts with appropriate information
• Pcard training requirement (control document is
  "My Training" report)
• Semi-annual analysis/review of P-card
  transactions (FO)
• Pre-approval for P-card purchases (ProTrav,
  email)
• Pre-approval for travel requests (ProTrav, email)

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What resources are available to learn more?

• Traveling on UI-Related Business
  (Training) http//www.uiowa.edu/7Efusstfdv/catalo
  g/workplace/23.html
• ProTrav (Training) http//www.uiowa.edu/7Efusstfd
  v/catalog/workplace/149.html
• Procurement Card Training (required for Pcard
  holders) http//www.uiowa.edu/7Efusstfdv/catalog/
  workplace/160.html
• Procure to Pay (Training) http//www.uiowa.edu/7E
  fusstfdv/catalog/workplace/209.html
• Procurement Card Best Practices (Purchasing
  website) http//www.uiowa.edu/purchase/PCard/Docu
  ments/Best20Practices.pdf
• Summary of Purchasing Policies (Purchasing
  website) http//www.uiowa.edu/purchase/purchase/P
  olicy/Policyhome.htm

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Financial Sub-certification Focus

• Our internal controls should reasonably assure.
• Compliance with laws, regulations contracts
• Prevention detection of fraud
• Proper recording, classification valuation (and
  safeguarding) of assets liabilities
• Adequate documentation disclosure

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Risks Consequences

• Vendor protests for competitive bids causes delay
  extra effort costs
• Loss of federal funding if competitive bidding
  process not properly followed
• Revocation of procurement card and possible
  termination
• Fraud or misuse of university resources
• Audit findings cause additional institutional
  policies
• Fines penalties (non-compliance with IRS
  policy)
• Reputation public disclosure

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Remember.

• Financial sub-certifications will be completed in
  fall 2009 for the fiscal year 2009.
• Accurate responses will help us to help you to
  strengthen internal controls.
• Progress will be made over time as we identify
  areas of opportunities to improve controls.

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What are your next steps?

• Understand your role in the sub-certification
  process
• Understand the general specific policies
  relevant to your roles responsibilities
• Share information with your staff colleagues
• Attend targeted training
• Review control documents checklist
• Provide feedback to central administration

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• Thank you!