COMPANY

BEST BUSINESS

PROFILE AND
PRACTICES

Carandang, Ericka Pearl U.

BSACT-4
COMPANY PROFILE
HISTORY
On May 31, 1850, nine men gathered to begin planning a university that would serve the
Northwest Territory.

Given that they had little money, no land and limited higher education experience, their
vision was ambitious. But through a combination of creative financing, shrewd politicking,
religious inspiration and an abundance of hard work, the founders of Northwestern University
were able to make that dream a reality.
In 1853, the founders purchased a 379-acre tract of land on the shore of Lake Michigan
12 miles north of Chicago. They established a campus and developed the land near it, naming the
surrounding town Evanston in honor of one of the University's founders, John Evans. After
completing its first building in 1855, Northwestern began classes that fall with two faculty
members and 10 students.
Twenty-one presidents have presided over Northwestern in the years since. The
University has grown to include 12 schools and colleges, with additional campuses in Chicago
and Doha, Qatar.
MISSION
Northwestern is committed to excellent teaching, innovative research and the personal and
intellectual growth of its students in a diverse academic community.

COMPANY BEST BUSINESS PRACTICES

I.

CASH HANDLING POLICY AND PROCEDURES

I.A. Cash Collection and Deposit

Purpose
It defines and outlines University policy in align with handling, receiving,
transporting, and depositing cash. Cash may include currency, checks, money orders,
negotiable instruments and charge card transactions.
The University funds are monies received through transactions involving tuition,
contracts and grants, revenues from University services, state and federal applications,
gift, and all other sources of revenue or expense reimbursements, whether restricted or
unrestricted as to its purpose. All checks received by the University or any of its
subdivision are considered University funds.
Procedures
The Bursar is the Universitys primary cash handling agent. However, since
centralized collection and controlling of cash is not always possible and practical, the
collection of money, for the most part, is decentralized.
Historical practices shall not constitute justification for deviation from the
following guidelines. All previous documents regarding cash handling policies and
procedures shall be superseded by this document. Meanwhile, all changes in policies and
procedures shall be made time to time and shall be communicated also through email.
Required Authorization to Collect Money
Approval to undertake any cash handling operation or activity must be received
from Budget Planning, Analysis and Allocation. Once accounted, the department should
communicate with the Accounting Services and Bursar to be informed about the
procedures that should be done.
Cash Handling Units
Appropriate departments are identified as cash handling units. The Bursars
Office is the liaison for identifying and working with all cash handling units. Those units
are to make deposit minimum of two deposits per month. Those department with small
number of deposits shall consolidate the deposits with the business or financial manager.
Each departments are required to make their own bank deposits including filled out bank
deposit slips, preparing packaging and entering into online Cash Receipt Ticket system.
Deposit that are not taken into bank via armored car must be transmitted to the Bursars
Office in a sealed tamper evident bank deposit bags dropped off and will be sent to bank
via armored car.
Segregation of Duties

Separation of duties between the person receiving cash and the person responsible
for maintaining the accounting records is a must.
Cash receipt activity should be reconciled to the Budget Statements monthly. The
reconciliation must be reviewed by someone independent from cash handling and
receiving functions.
These responsibilities should be distributed among personnel so one person is not
responsible for all aspects:

Opening Mail
Endorsing checks
Preparing deposits
Reconciling to budget statements
Billing and collection duties distributed among personnel

Responsibilities of Individual Departments

Compliance with University Policy & Procedures

Counterfeit Currency
o All cash handling authorities should exercise reasonable care in screening
cash transactions for counterfeit currency. Once received a questionable
bill, it must be remain in the possession of the department and should be
contacted to the University police immediately. The bill should not be
returned to the payer.
Safekeeping of Funds
o All forms of cash should be kept protected through vaults, locked cash
drawers, cash registers, cashiers cages, locked metal boxes, etc. Amounts
exceeding $1000 should be maintained in a vault. Meanwhile, amounts
under the said amount may be maintained in a file safe or reinforced file
cabinet with padlock and bar that secures all drawers. Cash should not be
maintained in desk drawers or standard file drawers as they can be easily
accessed by anyone. Moreover, Cash pick-ups and transfers by University
employees should be limited on a regular time or day. Such transfers
should be irregular and should be subject to change without prior notice.
Transfer of Accountability
o Transfer of accountability must be documented with the name, date, time
and amount if the deposit is made by the person not preparing deposit. All
transfer logs should be kept for the current fiscal year and the succeeding
two years thereafter. These documents should be maintained to provide a
suitable audit trail for all transactions.

Requirements for Deposits

Frequency of Deposits
o Deposits should be made in a timely manner to insure proper posting
of accounts and to insure the safety of University Funds. Deposits
must be routed directly from the department from the department to
the University Bursar. University funds for deposit must never be
taken off campus. Refer to the table below for information regarding
transportation of deposits:
Cumulative Receipts

Minimum frequency of
deposits to Bursars Office

Up to $499.99
$500 to $4999.99
$5000 to $49999.99
$50000 or more
Any single item $250000 or
more

Within 5 Business days

Within 2 Business days
Next day
Same day
Same day/ Immediately
(Bursar will prepare for
immediate bank deposit)

Should
consider
armored pickup
No
Yes
Yes
Yes
Yes

Form to be used
o Deposits are to be recorded online through Cash Receipt Ticket (CRT)
which is used to record, communicate, and document deposits made by
user departments to Revenue and Balance Sheet accounts. The paper
form of CRT must be used on emergency situations only or for
forwarding information to a centralized area of the university or
department for online data entry and preparation of bank deposit.

I.B. Receipts and Collection of Cash

Purpose
It summarizes the proper procedures to collect currency, checks, and changes.
Procedures

Methods to Record Cash Receipts

Manual Processing
o Incoming checks and currency must be reported on a log, worksheet,
and ledger or on pre-printed, numerically controlled receipts for each
transaction. The only exception is when pre-numbered tickets are sold.
o Cash collected should be balanced daily to sales or income earned. At
the end of transaction day or as needed, collections should be
transmitted to the Bursars Office for deposit and shall be posted to the
General Ledger.
o Maintenance of the files of all receipts shall be in the custody of the
departments. All pre-numbered receipts must be accounted for and all
original copies of voided transaction should be retained by the
department.
o Departments should maintain records of the inclusive receipt or ticket
numbers and total amount for which the receipts were written and sold.
It should reflect with Bursars Office deposits.
Utilizing a Cash Register, PC or Other Electronic Equipment
o It is recommended that purchases of cash registers or receipt producing
equipment be discussed with the Bursars Office prior to placing the
order. Departmental management should ensure that a balancing
worksheet, cash balancing procedures, and spot audit procedures are
established. The unit should determine how the program will balance
and how the record keeping process will be accomplished. The register
must have the following:
o A journal tape to record all transactions.
o A key or supervisor password which enables readings
or totals to be taken. The cashier must not have access
to this key.
o A grand total which cannot be reset to zero or any other
number. The cashier must not have the ability to void
and issue a refund without a supervisors approval.
o Void and refund transaction keys, supervisors
password and procedures.
Procedures for Cash Registered Sales
o All sales should be recorded through the cash register
o The cash drawer in the register should never left hung open unless a
transaction is on the process.
o All register totals should be balance by the end of the day or shift.
o Accountability over sales and change bank funds should be assigned to
the employee who operates out of the same cash register. Funds should
not be mixed between cash registers.

o The cash register should be closed out and total cash receipts should be
reconciled on a daily basis.
o Overages and shortages should be explained concisely. Overage and
shortage should have established dollar limits. Corrective actions
should be taken into consideration once limits are exceeded.
o All corrections should be made through the cash register. The journal
tape should be marked as an indication of the action taken. These
corrections should be reviewed and approved by the management.
o A periodic and unannounced cash reconciliations of the cash register
should be performed by the departmental administrators.
Sample Forms to balance, Record & Deposit Cash Receipts
o Every department should keep copies of the reports as well as any
generated by the cash register, pc, or other electronic device with a
copy of the CRT. These records should be kept intact for about seven
years on each departments.
o Cash Drawer Count- Used only for cash; skip if
exclusively receiving checks/or charges
o Void Transaction- Documentation of voids prepared
during business or afterward during balancing
o Revenue Clearing & Deposit ConsolidationCombination of separate drawers or registers into a
single deposit into a single deposit; skip only if Manual
processing Log is extremely straightforward and
complete.
o Cash Receipt Ticket- Online electronic receipt used to
represent and record bank deposit to the General ledger
Check Acceptance
Checks are to be written to Northwestern University, any other information on
payee line is for the convenience of the department only and not necessary for proper
credit.
o All checks must be drawn in a US Bank in US Dollars
o If a foreign check is received, it must be in excess of $150. These should
not be included in the departments deposit but it shall be sent to the
Bursars Office to be put through for collection.
o Any messages on a pre-printed should be reviewed.
o No stale and postdated checks shall be accepted.
o Checks should be made payable only to Northwestern University. If such
checks are named to a certain department, it must be endorsed as such.
o Written amount and numerical amount must be the same.
o Checks must also be signed.
o Restrictively endorse immediately with the department bank deposit stamp
I.C Cash Receipt Reconciliation

Purpose
It explains procedures to ensure that all funds are properly deposited and recorder
by reconciling CRTs and bank deposits to the General Ledger statements
Procedures

Verify match and Post Status using CRT

o Departments may retrieve committed CRTs online to verify matching
and posting status of individual deposits and the overall CRT. Only
CRTs with a Posting Status of Posted on the CRT will appear on
budget statements.
Using Committed Copies
o Department who have access with CRT system can look up their
accounts in the General Ledger one to two days after the deposit is
made, unless there is a problem with CRT of the bank deposit. The
amount posted in the General Ledger should be compared to the entry
committed in the CRT system. Changes made should not be reflected
on the original CRTs, they will be only shown as separate line items on
budget statements.
How and Where to Report Discrepancies
o If a deposit line is not found or discrepancy is found on budget
statements or in the General Ledger contact the Bursar or Accounting
Services for clarification

I.D. Gifts
Purpose
It outlines and defines procedures for handling charitable gifts to Northwestern
University.
Procedures
All charitable gifts to Northwestern University are processed through
Development Gift and Record Services. Gift checks should never be deposited directly
by a department. Centralized depositing ensures proper receiving and acknowledgement
of donors. Without an official University receipt, the donor may not be able to take an
IRS tax deduction for the gift amount. Donor information is recorded in a database for
historical tracking of the donors relationship to the University. Departments and schools
use this database in the generation of reports and acknowledgements.

Outright Gifts
o Currency or checks. When receiving gifts of currency or checks, a Gift
Transmittal Form is to be filled out and sent along with the funds to GRS.

o Endorsements. All gift checks sent to GRS by department offices should

be restrictively endorsed using a special gift processing stamp provided by
GRS.
o Charges. When receiving credit card gifts, a Gift Transmittal Form is to be
filled out and sent along with the credit card information to GRS.
o Securities and Bonds. Gifts of securities and bonds are sent from the donor
directly to the Investment Department. Documentation is sent from
Investments to GRS for recording and receiving.
o Gifts-In-Kind. Non-monetary gifts such as paintings, equipment, real
estate, etc., should be transmitted to GRS via a Gift-In-Kind Transmittal
Form. Valuation of the gift is necessary for proper recording and
receipting. Items valued over $5000 must have an independent appraisal.
Bequests and Trusts
All deferred gifts are to be handled through consultation with the Office of
General Counsel and Gift Planning offices.
Corporate Matching Gift Forms and Checks
If received a Matching Gift Form with a donation, the gift should be attached to
the gift and sent to GRS. The form should not be filled out. GRS must complete the
matching form to be properly credited and assigned to both the individual and corporate
donor.
Pledges
The Financial Accounting Standard Board requires all unconditional pledges to be
accounted for in the financial reports of the University. All pledges need to be reported to
GRS via a pledge transmittal form.

I.E. Check Cashing

Purpose
It outlines and defines University policy regarding check cashing privileges.
Procedures
Check Cashing Requirements

Cashing of checks by departments is strictly prohibited under any circumstances.

The Bursars Office is the only authorized check cashing facility at the University.
This privilege is limited to the Northwestern University checks only.
NU Check advances may be cashed. There is no fee to cash a check advance.
Bearer of check must present a valid ID. If cashing will be in unusually large
check, the Bursar requires 1-day notice prior to 1pm.
NU checks may be cashed at the Bursars Office for no more than $300. There is
no fee to cash a University check.

Returned Checks

Any check cashed at the Bursars Office and returned by the bank is subject to a
Service charge of $30.
Immediate restitution by the employee or student for the returned checks and
service fees is required.
Students registration and transcripts will not be processed until their account is
cleared.
Employees who have checks returned by the bank must make immediate action.
The employee may be terminated if prompt action is not made.
Check cashing privileges will be permanently revoked after two checks have been
returned by the bank or if action is not made immediately.

I.F Petty Cash Funds

Purpose
It defines and outlines University policy with respect to the maintenance of petty
cash funds.
Procedures
All departments using petty cash fund should control the usage of such. This is
not to be used to circumvent University procedures and record keeping in regards to
purchases and payments.
Establishing or Increasing a Petty Cash Fund

To open or increase a petty cash fund, a Direct Payment Request form, approved
by the department head or business manager, must be submitted for approval to
the Accounting Services department on the Evanston Campus.
A custodian for the fund must be appointed and is the party responsible for
safekeeping, disbursing, and balancing the fund. The custodian must be names as
payee on the DPR.
Determine the fund amount by estimating expenditures for a two week period.
The petty cash funds may not be established in excess of $300.
After completion of the approval process by the Accounting Services, funds may
be received at the Bursars Office.
The payee must present their valid ID to obtain cash at the Bursars Office

Custodian Responsibilities

The custodian is responsible for the proper safekeeping and usage of the fund.
He/she must exercise diligent due care for the administering and protecting of
funds in his/her possession.
Access of the fund should be restricted to the custodian only.

The fund should kept in the office locked safe with padlocks and bars for which
the custodian has the only access to the keys. The drawers where it is kept safe
should never be left hung open.
PCF should not be mixed with other funds for any other purposes.
The custodian should be accounted for any discrepancies in the fund.
The custodian must comply with the current University policies in maintaining
the fund.

Procedure to Change Custodian

Before changing personnel for the custody of PCF, the fund should be counted
and reconciled first by the current custodian. The succeeding custodian should
acknowledge receipt through signing a form documenting the transfer of funds
and the accompanying responsibility.

Petty Cash Disbursements

Emergency purchases
Freight, CODs, postage due
Authorized local travel or entertainment under $50
Payment of research participants up to $50 cumulative for the calendar year
Food purchases under $50 with proper documentation provided, including
business purpose of the event.
Card Sale refunds up to $25 each.

I.G. Control Concepts

Segregation of Duties

Are the following responsibilities distributed among personnel so one

person is not responsible for all aspects?
o Opening mail?
o Endorsing checks?
o Preparing Deposits
o Reconciling to budget statements?
Are billing and collection duties distributed among personnel?

Safeguarding of Cash/Receipts

Are checks endorsed immediately upon receipt?

Are receipts kept in a secure location until deposit?
Is access to credit card terminals and cash registers restricted to authorized
personnel?

Cash Receipt Processing

Are deposits made daily and/or in compliance with Cash Handling

Policies and Procedures Guideline?
Are daily cash register readings recorded on the daily cash reports and
reconciled to daily deposits.
Are processed credit card charges/credits handled properly and timely?
Are sales forms and invoices pre-numbered and accounted for to ensure all
sales are billed and recorded?
Is an open receivable aging report generated and reconciled to open
invoices and reviewed monthly?
Are accounts receivables reconciled to the General Ledger monthly?

Gift Receipts

Are receipts properly classified as gifts?

Are gift transmittal prepared timely?

Employee Reimbursements

Are receipts properly classifies as employee reimbursements?

Are the receipts processed timely?

Nature and Source of Revenue

Are revenue sources properly classifies?

Are potential program revenues channeled through the Office of Research
and Sponsored Projects?

Petty Cash/ Imprest Fund

II.

Is access to the petty cash fund restricted to the petty cash custodian?
Are petty cash disbursements made upon presentation approved petty cash
payout forms with supporting documentation?
Is petty cash fund replenished frequently enough to ensure sufficient funds
are available and expenses are charged to the proper fiscal year?
Is the petty cash fund in agreement with the general ledger?

PURCASHING AND PAYMENT POLICY AND PROCEDURES

Purpose
Considerable authority has been delegated to departments and schools to make
purchasing decisions. This requires that employees involved at every step of the process
take full responsibility for understanding NUs policies and procedures regarding
purchasing, payment, and vendor relations. Purchasing decisions are business decisions
made on behalf of NU and therefore should be made with the utmost consideration for
what is in the best interest of NU. Purchases also need to be made in the most efficient
and cost effective manner. Following policy and procedures ensures that appropriate

business processes occur when dealing with outside vendors. This policy is meant to
provide guidance to end users making purchases on behalf of NU.
II.A. Role of Procurement and Payment Services
Procurement and Payment Services (PPS) is the single point of contact for
centralized procurement activities. Their role is to help departments/schools make
informed, best value purchasing decisions, and to make sure products and services are
purchased and paid for in the most streamlined way, as well as assist departments/schools
with all other purchasing and payment related issues. The primary responsibilities of PPS
are as follows:
Strategically source on behalf of the University by establishing contracts
and agreements for use by all departments/schools based on formal,
structured, and consistent processes.
o Actively review spend reports (including P-Card) to look for new
contracting opportunities
o Conduct formal bid process and/or handle negotiations
o Develop contracts and secure appropriate signatures
o Streamline the ordering and payment process from contracted
vendors
o Contract administration:
Promote contracts to the University community
Enforce requirements of the contract
Resolve disputes
Review and analyze prices and price increase requests
Discuss and document changes

Maintain, interpret, and enforce purchasing and payment policy

Approve purchases when central approval is required by policy
o PPS reserves the right to review and question any purchasing
transaction.
Assist with the bid process on behalf of departments/schools, at their
request
Manage the dispatching of all Purchase Orders to vendors
o Monitor fax server and intervene when necessary
o Manually send POs when necessary Support and maintain the
iBuyNU Marketplace
o Manage the process of enabling new vendor catalogs
Process changes to Purchase Orders, when requested by
departments/schools
Work with the Office of General Counsel
o Streamline the contract review process
o Develop templates for use by departments/schools

o Make sure contracts, including terms and conditions, are reviewed

and signed
Manage the Business Diversity Program
Vendor File Management
Accounts Payable
Procurement Card
e-Payment

II.B. Authority and Responsibility

As stated above, NU maintains a procurement environment that delegates
considerable decision making authority to departments/schools. Employees involved in
the purchasing process take full responsibility for understanding NUs policies and
procedures regarding purchasing and vendor relations. Purchasing decisions are business
decisions made on behalf of NU and therefore should be made with the utmost
consideration for what is in the best interest of NU.
Segregation of duties and responsibilities in the purchasing process provides
proper controls. As the dollar value and complexity of a purchase increases, so does the
level of authority and responsibility required to obligate NU for a purchase.
If a department/school utilizes controlled substances, they are required to have all
appropriate licenses from the Drug Enforcement Administration (DEA).
II.C. Determination Of Need/Selecting A Vendor
When a department/school needs to purchase a product or service, there are
numerous considerations that must be taken into account prior to selecting a vendor:

Preferred Vendors. Departments/schools should first check to see if a Preferred

Vendor Contract exists that they could use. Preferred Vendor Contracts are established
by PPS for products and services needed by NU departments/schools on a regular
basis. Contracts are established based on the results of a formal competitive
bid/negotiation process that involves representatives from across campus. Bidders
determined to represent the best value to NU become Preferred Vendors
Departments/schools are strongly encouraged to utilize Preferred Vendors because
they have been determined to represent the best overall value to NU
iBuyNU. iBuyNU is a tool that was implemented to streamline the entire procure-topay process and should be used whenever possible. It provides end-users with a webbased ordering experience for many Preferred Vendors that is integrated with
NUFinancials. iBuyNU currently includes catalogs representing literally millions of
items that may be needed on a day-to-day basis, all of which reflect competitive
discounted pricing, often delivered within 1-2 business days at no additional cost, and
no sales tax is charged. POs are dispatched electronically several times a day, invoices
are received electronically, workflow is streamlined, and vendors are paid
electronically.

Collaboration Requirements. Departments/schools must work with the following

departments for the project types indicated below:
o Facilities Management construction and major renovation
o University Services Motor Pool - vehicles
o NUIT technology and communications
Purchases from Internal Service Units. NU has elected to provide for the purchase of
certain commodities and services through internal departments. Departments/schools
should consider use of such programs before looking for an outside vendor. Examples
are HR Workplace Learning and University Services. Advantages of using internal
providers include eliminating POs and checks as well as fast turnaround of products
and services.
Freight Terms. F.O.B. Destination is the NU standard delivery requirement, since it
provides the most protection to the department/school and NU. It should be
negotiated into all purchases whenever possible. F.O.B. Destination means that legal
ownership of the item transfers when it reaches the buyer. Therefore, the seller pays
all shipping costs and is also responsible for the goods during transit.
Insurance Requirements. NU has established minimum contractor liability insurance
requirements. Risk Management must review and approve any exceptions to the
standard insurance requirements of NU. PPS will coordinate the assessment of
insurance coverage when PPS is handling the ITB. Departments/schools with specific
questions should contact Risk Management.
Service Provider Security Assessment. NU contracts with many Information
Technology vendors or Service Providers to assist with its information processing
needs. In those instances where University data is shared with a Service Provider, or
captured by a Service Provider on behalf of NU, NU requires these potential Service
Providers to complete a Security Assessment. Departments/schools with specific
questions should contact NUITs Information and System Security/Compliance
office.
PCI Compliance. Contractors (TPSPs Third Party Service Providers) are required to
abide by the requirements of the Payment Card Industry Data Security PCI DSS
applies to all entities involved in payment card processing, including merchants,
processors, financial institutions, and service providers, as well as all other entities
that store, process, or transmit card holder data and/or sensitive authentication data.
Departments/schools with specific questions should contact Treasury Operations.
Technology/Web Accessibility. NU is committed to purchasing products and solutions
that meet the applicable standards of Web Content Accessibility Guidelines (WCAG)
2.0 Level AA. Departments/ schools with specific questions should contact NUIT
Consulting and Project Management Office.
Export Controls. Vendors are responsible for complying with all applicable export
control regulations. Any such export-controlled items, equipment, or information
MUST be properly handled and labeled by the Vendor as part of the Vendors
responsibilities under the law. The Purchasing and Payment Policy and Procedures 4
6-1-2015 burden shall be on the Vendor to prevent such export-controlled information
from being improperly disclosed to NU and if necessary, the Vendor shall obtain the
appropriate license or approval from the relevant authorities or shall invoke an

available exception, exemption, or exclusion before disclosing any export-controlled

materials to NU. Departments/schools with specific questions should contact the
Office of Export Controls Compliance.
Business Diversity. Business diversity should be considered in purchasing decisions,
when appropriate. This Program is NUs initiative to create opportunities for vendors
reflecting economic and cultural diversity to market their products to NU and to
encourage University departments/schools to offer opportunities to such vendors.
This includes small business enterprises (SBE), minority-owned business enterprises
(MBE), woman-owned business enterprises (WBE), and local (Evanston) business
enterprises (LBE).
Environmental Awareness. Environmental impact should be considered in purchasing
decisions, when appropriate. NU encourages departments/schools to consider the use
of products and services that impact the environment less than competing products,
when it is a best value decision to do so. Things to consider are total cost of
ownership, energy efficiency (Energy Star equipment rating), shipping materials,
landfill contribution, recycled content, waste prevention, waste reduction, pollution
prevention, clean air and water programs, re-use of materials, minimization of scrap
material, and any other green factory initiatives, etc.
Buy versus Lease. Equipment should almost always be acquired by outright purchase.
Circumstances may require the leasing of equipment to satisfy specific needs. The
economic benefits of leasing versus buying must be determined and documented
before entering into any lease agreement. Third Party leases are especially
discouraged.

II.D. Signature Authority

Upon selection of a vendor, a contract may be necessary. Please note that end
users within departments/schools typically do not have the authority to sign any contracts
or agreements with outside parties in the name of NU or one of its departments/schools.
PPS will coordinate the contract review and signature process with OGC when PPS is
handling the ITB.

Contracts and agreements that need to be signed by NU must be sent to the

OGC for review. OGC may also forward contracts and agreements for the
purchase of products and services to PPS for review to make sure appropriate
policies and procedures were followed in the selection of vendors. Once the
contract/agreement is reviewed and approved, it will be forwarded to the
appropriate officer of NU for signature. Below are the officers authorized to
sign contracts and agreements on behalf of NU:
o President
o Provost
o Executive Vice President or Vice President
In some cases, OGC or the above officers may have expressly delegated
limited signature authority in writing to another University employee or
position. Certain Associate and Assistant Vice Presidents, Deans, Associate
Provosts, and Directors have been delegated authority to execute contracts.

Check with your unit or department to determine if a particular person has

been delegated authority, or contact OGC
Also, please note that hotel booking, restaurant reservations, and catering
agreements do not need to be reviewed by OGC. However, any such
agreements still require review and signature by an authorized Northwestern
University signatory. Non-Preferred Vendors will still need to provide
evidence of insurance.
II.E. Dispatching PO to Vendor
Once all approvals have been applied, the PO will be issued and sent to the
vendor within two hours based on the dispatch method identified in their vendor profile
in NUFinancials

II.F. Receiving.
A Receipt is the department/schools way of indicating that the product has been
received or service has been provided and therefore the PO is approved for payment. To
authorize payment, receipts must be entered as soon as possible after receiving the
product or service. Please note that iBuyNU orders will not require a receipt to authorize
payment
II.G. Invoicing/Payment
A purchasing transaction is complete only after the goods or services have been
received and the supplier has been paid. When a PO is issued, the department/school
assumes responsibility to make sure the vendor is paid within an appropriate period of
time. Vendors are instructed to send invoices directly to AP for proper processing. This is
the best way to ensure invoices are paid in a timely manner.

The 90-day Rule. All University expenditures and costs should be charged
to their proper source of funds within 90 days of their occurrence.
Expenditures and costs over 90 days will be posted only on an exception
basis. Processing of all reimbursement requests, on both sponsored and
non-sponsored accounts, should adhere to the 90-day rule. The 90 Day
Exception Form must be used to process transactions that are more than 90
days old.

II.H. Changes to Purchase Orders

Changes that need to be made to POs that have already been sent to the vendor
can be initiated by departments/schools by submitting a Purchase Order Change (POC)
request through the POC Request Center in NUFinancials. All change order requests will
be routed to PPS for review and approval. PPS will route certain requests through the
same workflow that new requisitions go through when appropriate. PO changes will be
sent to the vendor when appropriate.

III.

Travel Entertainment and Courtesy

Purpose
The University exists to conduct teaching, research, and public service. Expenditures of
University funds for travel and entertainment must occur in furtherance of this mission,
and a business purpose must exist for each instance of expenditure. Each person
responsible for making decisions concerning these expenditures should always ask, first
and foremost, whether an expense represents a worthy use of University funds.
III.A. Travel
Procedures
Authority and Responsibility

Travel, entertainment and courtesy transactions must be authorized in

advance by the travelers supervisor. Employees must be authorized to
commit the Universitys resources, and are subject to disciplinary action
up to and including the termination of employment if proper authorization
is not obtained. A process should be established within each school/unit as
to how authorizations for transactions will be documented. It is the
responsibility of each school/unit to determine how it chooses to
implement the authorization process

Pre-Trip Considerations

Registration & Conference Fees

o Registration fees for a meeting or conference at which attendance
has been approved should be billed directly to a departmental or
sponsored project source of funds through the Universitys
financial system or paid for with a procurement card. Registration
fees paid directly by an individual will not be reimbursed until the
conference is completed and proof of attendance is submitted.
Travel Arrangements
o University-designated Travel Agencies should be contacted to
arrange all air and rail transportation, hotel accommodations, and
car rentals. Airline tickets and preferred hotel accommodations
may be direct-billed to a department or sponsored project through a
designated travel agency. A personal credit card must be provided
for train tickets, hotel incidentals and car rentals.

Transportation

Airfares/Airline Fees
o University-approved air travel with scheduled flight times,
including stopovers and change of planes, of 12 hours or less
must be at the most reasonable and economical rate. Business
class and premium economy travel are permitted, with written
pre-approval from the sponsor for sponsored projects, when

scheduled flight time, including stopovers and change of

planes, is in excess of 12 hours. Premium economy fare class is
not offered in all markets and on average is one-half the cost of
a business class fare. All travelers should use the least
expensive airfare, including non-refundable and penalty fares,
based on a two-hour "window" on either side of their preferred
departure or arrival times. Air carrier selection cannot be biased
by the travelers frequent flyer affiliation. The lowest cost air
travel should take precedence.
Ground Transportation
o Taxi fares, including tips, are reimbursable where public
transportation is not practical. This includes taxis between
hotels and railroad stations or airports, between appointments
or between hotels and places of temporary duty.

Lodging
Travelers must book standard accommodations in reasonably priced, commercialclass hotels and motels. Use of preferred hotel vendors is encouraged. Travelers should
ask for educational discounts at all hotels and motels, many of which charge reduced
rates to those who identify themselves as University faculty or staff. To ensure the lowest
possible costs, the traveler is encouraged to book lodging through the designated
University Travel Agencies. Travelers will be reimbursed for the reasonable and actual
cost of lodging.
Meals while Traveling
Travelers should use reasonably priced restaurants and dining rooms. In planning
entertainment for University guests, all efforts should be made to provide reasonable
meal arrangements. Original itemized receipts must be attached to the NUFinancials
Expense Report for reimbursement of meal expenses, unless the per diem reimbursement
method is selected.
Reimbursement of meals under $40 for which receipts were unobtainable will be
allowed only on a limited basis in the event of the occasional missing receipt and not for
an aggregation of meals. When such meal receipts are unobtainable, proof of travel must
be attached to the Expense Report in the form of a hotel bill, airline passenger receipt,
conference literature, or comparable materials. Payments for group meals while traveling
require a written explanation when no receipts are available. The University reserves the
right to withhold any meal reimbursement not having sufficient proof of actual
expenditures and a valid reason.

III.B. Entertainment & Courtesy

Procedures
Authority and Responsibility

Travel, entertainment and courtesy transactions must be authorized in

advance by the travelers supervisor. Employees must be authorized to
commit the Universitys resources, and are subject to disciplinary action
up to and including the termination of employment if proper authorization
is not obtained. A process should be established within each school/unit as
to how authorizations for transactions will be documented. It is the
responsibility of each school/unit to determine how it chooses to
implement the authorization process

Annual holiday parties are allowable if they are reasonable in scope, with
only one party per department, school, or unit, supported by unit funds.
The current standard for maximum cost per person is $27. The allocation
is intended to cover the total cost of the event, including facility charges. If
additional guest (e.g. spouses, etc.) are included, the allocation does not
apply to those guests. Additional costs should be reimbursed personally.
Schools or units may establish per person guidelines consistent with the
availability of resources, but should not exceed the guideline established
above ($27/person). Also, other incidental costs incurred by faculty, staff,
and students in order to participate in such events such as parking or
babysitting, are not allowable for reimbursement

In-town meal reimbursement is allowable if there is a legitimate business

purpose involving non-University personnel. The inclusion of University
employees should be moderated as much as possible (e.g., no more than 23 other employees in attendance). In planning entertainment for University
guests, all efforts should be made to provide reasonable meal
arrangements. Reasonably priced restaurants or catering services should
be used. For group meals, the most senior employee should assume the
responsibility of paying the bill.

Events

Meals

Refreshments

Coffee service and water for reception areas where there is public traffic is
allowable. Modest refreshments at school-wide or department meetings
are allowable at either monthly or quarterly intervals. For example, box
lunches for chairs' meetings can be purchased in the range of $8-10 per
person. Morning meeting refreshments should be kept to a minimum.
Purchase of food on a continual basis for employees or students is
unallowable. Food purchased for a regularly scheduled weekly meeting or
for daily consumption within an office or classroom is an inappropriate
use of University funds. Contributions should be sought to cover such
expenses. The cost of alcoholic beverages is prohibited on all sponsored
projects and should be discouraged in all settings.

Gifts and Flowers

Gifts and flowers to any University employees for any purpose other than
those provided through the official University Human Resource employee
recognition programs are unallowable. Deans and Vice-Presidents have
discretion to determine whether flowers are appropriate in certain cases
where institutional representation is important. Holiday gifts for faculty
and staff are unallowable. Personal contributions among colleagues should
be the method of providing such gifts.

Club Memberships
Club memberships of any type are generally not allowable; exceptions
must be approved by the Provost or Executive Vice President. For
approved exceptions, club induction dues and any capital assessments are
reportable as income to the employee. Meals and events are reimbursable
only to the extent that such costs relate to discrete, bona fide entertainment
expenses that are documented with guests names and the University
business purpose of the entertainment.

IV.

EQUIPMENT POLICY MANUAL

Purpose
The University maintains equipment inventory records for several reasons:
To support proper financial reporting.
To comply with Federal funding. By its acceptance of Government
contracts and grants, Northwestern University is obligated to identify all
government titled property as it is acquired, keep specific inventory
records and establish controls for the usage, maintenance and disposition
of equipment and material.
Federal Regulations allow an annual recovery of a portion of the cost of
University acquired equipment through the indirect cost rate, if an
accurate property control system is in place.
Donors, grantors and benefactors expect the assets they provide will be
accounted for, maintained and utilized. The University has a stewardship
function.
To assist the departments with tracking equipment and internal control.
IV.A. Acquisition
Procedures
Purchases

To maintain the integrity and accuracy of the equipment inventory system,

it is very important that the distinction between capital and non-capital
equipment be understood and used by those departmental staff acquiring
equipment of any sort. It is important to make sure that the correct expense

account is selected when purchasing equipment. Items costing $5,000 and

above should be coded to a capital equipment account and items costing
less than $5,000 should be coded to a non-capital equipment account. All
capital equipment has a minimum useful life of one year or more.

Item Category for Equipment Purchases

Below is a list of the categories that should be used for capital equipment
purchases:

Artwork Asset
Athletic Equipment Asset
Audio-Visual Equipment Asset
Computer Equipment Asset
Computer Hardware Asset
Elevator Building Supply Asset
Food Service Equipment Asset
Furniture Asset
Furniture Classroom Asset
Furniture Dorm Asset
Furniture Office Asset
HVAC Asset
Laboratory Equipment Asset
Laundry Service Equip Asset
Maintenance Equipment Asset
Musical Instruments Asset
Office Equipment Asset
Scientific Equipment Asset
Shelving, Seating, and Lights Asset
Shop Equipment Asset
Telecom Equip Asset
Vehicles Asset

Capital Equipment Inventory Verification

Capital equipment records are verified at least once every two years to ensure that
the inventory records within the asset management system are accurate. Capital
equipment inventory verification specifically includes verifying the existence, tag
number, model number, serial number, building name and room number, custodian name
and asset description. Physical inventory is performed on a biennial basis. If a unit has
capital equipment purchased two fiscal years or more prior, that has not been verified in
the prior or current fiscal year, they will be required by Financial Operations to perform
capital equipment inventory verification for such equipment in the current fiscal year
regardless of inventory cycle.

It is the responsibility of the unit representative to determine and execute a

method of capital equipment inventory verification that works best for their unit, provide
required updates to Financial Operations and certify that they have done so with their
signature. Additionally, unit representatives are responsible for facilitating the physical
observation of capital equipment inventory by a Financial Operations representative
when required.
Donated Equipment
When a unit of the University receives a donated piece of capital equipment the
Office of Alumni Relations & Development (ext. 7-2003) should be notified so that the
equipment will be properly valued and a University gift receipt issued. DSO will issue a
gift receipt to the donor and also prepare a gifts-in-kind transmittal form providing
necessary information for the ASD to enter the donated equipment into the inventory
system.
Capital Leases
Leased equipment is not owned by the University and is not included in the
Universitys equipment inventory unless it meets one of the following criteria and is then
considered a capital lease:

Lease transfers ownership to Northwestern University.

Lease contains a bargain purchase option.
Lease term is 75% or more of economic life of the property.
Present Value (PV) of lease payments is at least 90% of the fair market
value (FMV) of the leased property.

IV.B. Disposal
Procedures
Equipment Disposal Forms
Northwestern University members are required to fill out an equipment disposal
form when they dispose of capital equipment from the University. The information in the
form is emailed to the Property Accountant who then uses the information to manually
update the equipment inventory database. Disposed equipment can be sold, stolen,
traded-in, scrapped, donated, returned to vendor, destroyed, transferred out, cannibalized,
recycled, or posted on the surplus property exchange web page.
Insurance
The University maintains a combination of self-insurance and outside insurance
which will provide for the expenses of repair or replacement of University equipment
which is lost or damaged. This program reimburses the actual department expense to
repair or replace such equipment, subject to a deductible of 10% of the expense with a
minimum deductible of $500.00 ($1,000 for electronics) in each loss except for normal

wear and tear and other common insurance exclusions such as war and nuclear
contamination.
Security
Our (Risk Management) experience is that many equipment losses are due to
theft, often without any signs of forced entry or removal. Installation of theft prevention
devices is strongly encouraged. Certain manufacturers of such devices, such as Anchor
Pad, Inc., provide equipment replacement guarantees that will eliminate (insurance)
deductibles for departments who use their products. Facilities Management can install
theft prevention devices at departmental request with a modest cost to the requesting
department.

Sources:

http://www.northwestern.edu/about/index.html
http://www.northwestern.edu/controller/treasury-operations/depository-services/cashpolicy.pdf
http://www.northwestern.edu/financial-operations/policiesprocedures/policies/purchasing-payment-policy.pdf
http://www.northwestern.edu/financial-operations/policies-procedures/policies/travel.pdf
http://www.northwestern.edu/financial-operations/policiesprocedures/policies/equipment-policy-manual.pdf