Payments - Financial Management Policy - 30320

This policy describes the procedures governing expenditures of College funds and addresses expenditure documents prepared by the College for submission to the Shared Service Center for processing.

Disbursements of State funds are made to businesses or individuals that furnish goods or services to the College. To receive payment, these entities must submit vendor invoices to the Shared Service Center. The term, invoice, refers to the original vendor prepared bill.  Another form of disbursement is the reimbursements paid to employees for College related business travel expenditures.  Refer to GCC Policy No. 30800 for details on travel reimbursements.

Payments can be made from an itemized statement if a contractual agreement exists with the vendor allowing this practice. Under these circumstances, the payment terms for the itemized statement should be specified in the vendor contract.

Payments made prior to the receipt of goods and services are permissible only as described in CAPP Policy No. 20310 (Expenditures). Allowable expenses are advance payments for written contracts or leases with a maximum pre-payment period of a year, or miscellaneous advance payments with a maximum pre-payment period of 90 days. Expenses often prepaid at year end as part of year-end cash planning include facility leases, equipment leases, and maintenance agreements.

CAPP Policy No. 20310 specifies that advance payments are allowed for expenditures normally prepaid as a standard industry practice or where such prepayments are considered cost-beneficial to the Commonwealth Documentation should be retained within the agency and made available for review upon request to substantiate the decision to make advance payments.

In the case of maintenance agreements, such as hardware and software maintenance, annual payments are standard industry practice. Dues and subscriptions are also typically paid on an annual basis. For these types of expenditures, annual payments are acceptable but in no case should be paid more than 90 days prior to the expiration of the previous year agreement or subscription.

Payments for services when the standard practice is a statement of work that may cover up to twelve months are also acceptable advance payments. Examples of these types of services include the call center or tutoring services.

Annual facility lease payments are considered justified and beneficial to the college. Lease payments represent long-term commitments with low risk of bankruptcy or non-performance and availability of the space on an on-going basis is essential to the mission of the college. Advance lease payments should be evidenced by a check request bearing the signature of both the Director of Finance and the Vice President of Administrative Services.

For any other service or contractual payment to be paid in advance other than those listed above, advance payments must include a cost-justification and approval by the Director of Finance and the Vice President of Administrative Services. It is appropriate in these cases to request a discount from the vendor for providing payment in advance.

The business office shall maintain a file of prepaid expenses that includes copies of approved check requests, invoices and cost justifications.

The vendor payment due date is defined as either:

• the date on which payment is due under terms of the contract for provision of goods or services, or
• if such a date has not been established by a contract, thirty days after receipt of the vendor’s invoice at the Shared Service Center or thirty days after receipt of the goods or services, as recorded in eVA (Commonwealth purchasing system), whichever is later.

When the invoice is received at the Shared Service Center, they are responsible for performing a three way match between the purchase order (in eVA), the receipt information (in eVA) and the invoice.   Invoices missing purchase order information or that have not been received will be routed back to the College for resolution.

3.1. For payments processed on small purchase charge cards – Small purchase charge cards (SPCC) may be used for purchases that comply with the Business Rules as determined by the Shared Service Center. SPCC Purchases are restricted to point of sale purchases, pre-approved meals, emergency purchases, online purchases requiring a user log-on, and professional memberships and related conference registrations.

DOA may question any State-funded expenditure (Section 2.2-1822, Code of Virginia).  As such, Business Office personnel review all expenditures to ensure they are in compliance with State and College policies.

College purchases must be considered essential to the operation of the College and in support of the College’s mission to justify the use of State funds. Since all State-funded expenditures are subject to public scrutiny, the College should consider the appearance of unusual purchases on the College and on State government in general prior to authorization. Since individual circumstances vary widely, adequate documentation for unusual purchases should always be included with the voucher.

The following lists contain examples of expenditures considered to be improper uses of State funds. These lists are intended to provide general guidance to agencies in judging the appropriate use of State funds. However, any State-funded expenditure may be questioned, even those which are not included on the following lists.

Employee personal expenses such as:

• Books for classes (unless they remain property of the State).
• Snacks or refreshments.
• Baby sitting.
• Non-business related newspapers or magazine subscriptions.
• Personal articles that are lost or stolen.
• Tuxedos or other formal wear.
• Clothing (non-uniform) or repairs to clothing damaged in the workplace.
• All expenses related to personal negligence of the employee, such as traffic fines.

Agency-sponsored event expenses incurred which do not clearly support the agency mission such as:

• Retirement parties or employee going away parties.
• Holiday decorations.
• Alcoholic beverages.
• Charitable contributions.
• Gifts and flowers.

CAPP Topic No. 20300, Cash Disbursements Accounting

CAPP Topic No. 20310, Expenditures

Director of Finance

7.1. Joyce Warnacut: June 15, 2018

7.2. Leadership Council: December 14, 2018

7.3  Revised by Joyce Warnacut:  June 22, 2019

7.4  Approved by Leadership Council:  July 25, 2019