Definition: A business purpose statement justifies how an expense is appropriate and reasonable, and how it supports and/or advances the goals and objectives of the university.
Per Arizona Constitution, Article 9, Section 7, public funds are to be expended only for public purposes. University policy requires that all disbursement transactions (e.g., supplier invoices, travel authorizations, travel expenses/reimbursements, purchasing card payments, requisitions, internal billing transactions, etc.) have written information within the transaction documentation to justify the public purpose served by the expenditure. Financial Services therefore requires clear documentation of this justification. If not clearly documented, the department may be asked to provide additional details, and/or the expense may be disapproved or identified as non-compliant (PCard).
Purchases and/or reimbursements made on behalf of the university must include a business purposes statement that addresses the following:
- What is being purchased?
- Why is the purchase necessary and is it reasonable and appropriate for the university?
- Who is the person that requested or needs the purchase? For events, this will include the audience or list of attendees.
- How does the expense benefit the university? Expenses that appear to be personal or provide a benefit to an individual must include a written explanation of how they are business related.
- Where is the event/activity taking place? If travel is included, provide the benefit to the university for sending the individual(s) to the event/activity.
- When is the event/activity taking place? Include all dates associated with this event/activity expense, especially when including travel time.
A business purpose statement must provide reconcilers, approvers, and auditors the information required to fully understand the intent of the purchase or service and how it relates to the overall mission of the university. The information serves as the basis for a determination of whether the expenditure is allowable or unallowable. Financial transaction approvers are both responsible and accountable for determining whether expenses comply with the business purpose provided, are within policy, and are necessary to conduct university business.
| Type of Expense | Insufficient Business Purpose Description | Information to Include for the Type of Purchase | Appropriate Business Purpose Description |
|---|---|---|---|
| Business Meal for job candidate | Faculty candidate visiting on July 30 | Provide the agenda/details of the meeting, the date and location where the meeting took place, itemized receipt, list of attendees and their relationship to the university, and the job posting number. | Interview dinner on July 30, 20XX, at the Cactus Grill with faculty candidate Mary Smith for job posting #12345A. Attended by candidate Mary Smith, guest of candidate Andy Smith, university hiring committee chair Professor Roses, and department faculty member Dr. Jones. See attached agenda and receipt. |
| Research supplies | Supplies needed for analysis | Clarification of the supplies and project where the supplies will be used. | Focus 3ml 60mg cartridge needed for analysis on PROJECT NAME. |
| Purchase | 100 custom imprinted toy cars to use as swag for Department Name | The reason for needing the items must be clear, along with the flyer/program that shows these are for the event and not purchased to be given away as gifts. The cost of these items should be minimal with no monetary value. | 100 custom imprinted toy cars to be used as promotional items for the NAME OF EVENT to be held by DEPARTMENT NAME on DATE to promote department to AUDIENCE. Flyer/program is attached to backup documentation. |
| Membership fees | 20XX NACADA membership for EMPLOYEE NAME | Why the membership is necessary for the individual and how it benefits the mission of the university. | 20XX NATIONAL ACADEMIC ADVISING ASSOCIATION membership for EMPLOYEE NAME to increase his/her ability to assist students as an academic advisor. |
| Conference | AMA Conference | Include the attendee, travel authorization number for the traveler, and start and end dates of travel. If a student is traveling, it is necessary to provide an explanation of how the university benefits. | EMPLOYEE NAME to attend the 20XX American Marketing Association Conference in San Francisco, CA, August 4-6, 20XX, for professional development. Travel Authorization NUMBER. |
| Business Meals | Training for employees | Provide the agenda/details of the meeting, the date and location where the meeting took place, itemized receipt, and a list of attendees and their relationship to the university. | Training and professional development on October 1, 20XX, from 9 a.m.-4 p.m. for 12 department employees to improve communication skills and manage difficult conversations in the workplace in order to better perform their job duties. Lunch included. See attached list of attendees. Agenda: Opening remarks by Department head, Workshop 1: Topic Y, Workship 2: Topic X, Lunch: Open for questions, Workshop 3: Topic Z, Closing: Lessons learned. |
| Supplies | Coffee, bottled water, creamer | The purpose and intended consumers of these items should be clear since university funds can generally not be used to purchase these items for break room employee only consumption. | Purchase coffee, creamer and bottled water for meetings with visitors and customers to DEPARTMENT NAME. |
| Decorations | Decorations for employee appreciation | Include the attendees and the flyer/program for the event as backup for purchasing decorations to clarify the event is not personal in nature. | Decorations for employee appreciation event to be held on MM/DD/YYYY at LOCATION. Flyer/program and list of attendees attached to backup documentation. |
Business purpose details must be included on the transaction within UAccess Financials utilizing any of the following options:
- Document Overview Tab > Explanation Field.
- Notes and Attachments TAB > Add notes detailing business purpose.
- Notes and Attachments TAB > Supporting documentation may be attached containing business purpose details.