DISBURSEMENT VOUCHERS

 

2/11/08

Change In Threshold for DVs for Compensation for Services

As you know, a couple of months ago we communicated that there would be a change soon in how honoraria, fees for speakers, etc. would be processed. Since that time, we have worked with the Auditors and the University Director of Purchasing to analyze the number of DVs and the appropriate response to the audit. The decision has been made to reduce the DV threshold for Compensation for Services from $5,000 to $1,000. So, any transaction over $1,000 should be processed on a Purchase Order in EPIC rather than on a DV. Transactions under $1,000 can still be processed on a DV. We will change our web site information to reflect these changes. We hope that we have created the right balance between good internal controls and campus operational effectiveness.

More detailed processing information for those transactions over $1,000, which should be on a Purchase Order, can be found at:Click Here

 

What are they?

The Disbursement Voucher (DV) is used to reimburse IUPUI employees, non-employees, and other vendors for expenses incurred while conducting university business, performing a service, or providing material goods for the university.

The DV is not designed to replace standard university procurement procedures nor is it intended to alter the procurement policies mandated by The Trustees of Indiana University. It is not a substitute for sanctioned procurement channels. A number of authorized procurement processes exist that provide efficiency and timeliness to the department in their buying efforts.

These are:

• EPIC Standard Purchase Order (PO)
• Electronic Purchase Order (EPO) (department level @ >$1,000)
• Procurment Card

With the advent of the procurement card, there is now a different avenue available for the procurement of goods and services, which, for many purchases and payments, is more suitable than the use of the disbursement voucher.

The specific issue relevant to the use of the DV is that of purchasing authority. The authority to commit the university to a contractual agreement rests with only certain people in the organization, i.e. the Treasurer and Purchasing Contract Managers. If the DV can be used to pay consulting fees, for example, there is no control in place to ensure that the consulting contract has been approved and signed by the appropriate and authorized staff. Additionally, under the concept of "apparent authority", consistent use of the DV to pay vendors can prevent IU, in the case of fraud, from using the defense that the purchase was not authorized.

Because of the concerns presented above, the following changes in the administration of the DV process to restrict direct payments to vendors for goods and services, particularly contractual services was implemented in October 2001. Payments that will no longer be allowed on the DV should be made via the procurement card (subject to the restrictions itemized in the ProCard guidelines found at http://www.indiana.edu/~purchase/pcard/pcard.html or they should be made through the traditional purchasing process utilizing electronic requisitions.

Disbursement Voucher Guidelines

 

Responsibility

As with any University policy or procedure, every contingency cannot be articulated. It is the responsibility of the IUPUI employee involved with expending University funds to do so in a prudent, ethical, and authorized manner.

If uncertainty exists about the suitability of a particular transaction, it is incumbent upon the employee to seek clarification of the appropriateness of the transaction before proceeding.