The Purpose of the Accounts Payable Department is to ensure that all disbursements of university funds are done in accordance with generally accepted accounting principles. This means providing external, as well as, internal customers with the most efficient, precise, and prompt service. The responsibility of the Accounts Payable Department is to assess and prepare reimbursements, corporate travel cards, cash advances, travel expenses, petty cash, and make payments on goods and services rendered by individuals and vendors. These are paid by operating or restricted funds. 

PAYMENT TO VENDORS

American University is required to meet the regulations of the Internal Revenue Service for payments to individuals. To be in compliance, all new vendors must have proper documentation (W9 Form) on file and be entered in Datatel before requisitions can be entered into the system.

Datatel Requirements

• All requisitions must include a vendor code. 
• Reimbursements, direct payments, and PSAs require W9 Form documentation.
• All requisitions for goods and services exceeding $500 should be entered into Datatel before the purchase.
• All items less than $500 may be purchased using the AU One Card, or by sending the invoice signed by the approved person within the department. 
• The General Ledger Account Number should be charged to Accounts Payable. 

NOTE: All Vendors who submit invoices for payment must supply the University with a completed W9 form.  Accounts Payable will be unable to process any payments without the proper documentation.

Reimbursements, direct payments and PSA's will also have the same requirement. Accounts Payable will be unable to process any payments without the proper documentation.

The University is exempt from paying sales taxes which may appear on invoices or on personal reimbursement requests from MD, DC, and VA.

It is the policy of the Office of the Controller to pay only on original invoices which easily identify the goods or services sold to the University or requesting departments. It does not pay statements that are issued by vendors.

As per Sarbanes-Oxley, Accounts Payable must have all invoices, expense reports, and disbursement requests submitted as soon as they are approved for payment. This is especially crucial at the end of our fiscal year (April 30).

Invoices must be received directly by Accounts Payable. Otherwise, outstanding payables may go overlooked. This can become a significant problem with our external auditors during the annual audit of the University's financial statements.  

Payments to Individual for Services (Disbursement Request & Contract Required)

1. The University may obtain the services of an independent contractor. The definition of independent contractor, is one who is responsible for payment of his/her self-employment taxes; who is not subject to the control of another as to the means and methods for accomplishing the work, but only as to the results; who engages in the pursuit of independent practice to the public; who pays their own expenses.
2. University employees are not authorized to enter into contracts with individuals without a contract signed by the authorized officer of the University in the Finance office. 
3. Payment to individuals for services performed must be made through the Payroll office or the Accounts Payable department. It must be paid through the Payroll office if the individual is currently being paid, or has been paid previously during the current calendar year, by the Payroll office. Payment for all other services performed by individuals must be made through the Accounts Payable department and submitted on a Disbursement Request form.
4. • Request for payment to independent contractors (as defined by IRS) must include be accompanied by a valid contract signed by the Assistant VP Finance (signing for the administrative part of the University) or the Dean of Facilities (signing for faculty and research contractors), using object code 51208. 
   • Request for payment to a speaker must use object code 51210 (non-employee compensation). 
   • • Personal reimbursement can be issued to faculty, staff, and students who have used  their own funds in order to obtain small items not available through university services or through Procurement and Contracts (e.g. mileage, metro fare reimbursement, etc.)  Personal reimbursement checks should be requested for amounts greater than $100. Amounts less than $100 should be handled by the petty cash custodian or the cashier's office. 

Miscellaneous Cash Advances

Miscellaneous cash advances are used for university events which may require cash for a specified purpose and is subject to all the policy and procedures stated above.  

Petty Cash Funds

Petty cash funds are established for departments of the university to enable the departments to pay minor business expenditures or for expenses not available through the Purchasing Office or the Campus Store.    

Petty cash is to be used for small supplies not available through university services; small items such as postage, local transportation; or other small reasonable disbursements relevant to the department's function and subject to the custodian's discretion. 

Petty cash is not to be used for personal loans, borrowing, check cashing, payment for services rendered, salary advances or travel advances.

To prevent access by anyone except the custodian, the fund should be kept in a locked box in a desk, file cabinet or safe that is also locked whenever the custodian is absent.

Any shortages within the fund should be brought to the attention of the Office of The Controller and the department head immediately.  

In case of theft of petty cash, the custodian must notify the campus security police, file a report on the incident and send a copy of the theft report to the Controller's Office.

If a department has only small infrequent charges to petty cash the department may not need its own petty cash fund. The use of the cashier services of the student accounts office will be appropriate.  

During the absence or vacation of the custodian, a temporary custodian may be appointed by doing and inventory of the cash box, completing the 'Change in Petty Cash Custodian' form listing the receipts and any other pertinent information. These items must total the authorized petty cash fund. If they do not, The Office of The Controller must be notified immediately. The form must indicate that the change is only temporary. If the fund is to reimburse while the regular custodian is absent, a memo must accompany the Disbursement Request and identify the temporary custodian. 

A department head may change the custodian by following the instructions above and notifying The Office of The Controller of the effective date of the change. The petty cash fund must be balanced and reconciled before the transfer to a new custodian. The previous custodian, the department heads or designate must act in the capacity of the previous custodian to balance the amount before it is transferred to the new custodian.

The internal audit department will audit the petty cash funds each fiscal year.