I saw this on the Association of College and University Auditors'
list-serve.  The University of Colorado uses this as a guideline for
determining the propriety of expenditures.  It is a nice summary and is
consistent with our own fiscal policies. I thought it might be beneficial to
those involved with the purchasing process at UTC.  

Seven Tests of Propriety 

University expenditures (regardless of the source of funds) will be
considered proper if they meet all of the following seven tests of
propriety: 

1. The expenditures are in the best interests of the University and for
official University business only (see Fiscal Policies and Procedures FI0405
<https://san4.dii.utk.edu/servlet/page?_pageid=2648&_dad=portal30&_schema=PO
RTAL30&p_policy=FI0405>  for additional guidance on specific types of
expenditures). 

 

2. The expenditures comply with all applicable federal, state, and
University laws, regulations, policies, and procedures. 

 

3. The expenditures do not appear to, nor do they actually, provide any
personal benefit to any employee without there being a valid business
benefit to the University.

 

4. The expenditures are within approved budgets as determined by the
authorized approver for the fund or department.

 

5. The expenditures are necessary to the accomplishment of University
business, meaning that, without the expenditures, programmatic objectives
would be difficult or otherwise more costly to achieve, or that the impact,
level or quality of the achievement of these objectives would be reduced.

 

6. The expenditures are reasonable, meaning the quality and quantity of the
goods or services were sufficient to meet, but not exceed, the identified
need.

 

7. The appropriate level of management has approved the expenditures. 

 

 

 

If you have any questions or need additional information please do not
hesitate to contact me.

___________________________________________

 

Bill Miller, Director

UTC Audit and Consulting Services

605 Oak Street, 3rd Floor 

Dept. 4855

Chattanooga, Tennessee  37403

 

Phone: (423) 425-4715

Fax: (423) 425-4763

e-mail: [log in to unmask]

 


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