SECTION 75: Disbursement Voucher (DV)

1. Policies and Requirements
   1. DV Purpose
   2. Fiscal Officer Approval of Agreements and Permissible DV Payments
   3. DV Preparation
   4. DV Restrictions
   5. DV Routing
2. Vendors
3. DV Payments Report
4. Special Handling
5. Nonresident Alien Payees
6. Conflict of Interest
7. Exhibits/Forms

1. Disbursement Voucher Purpose

   1. The Disbursement Voucher (DV) is to be used to pay for certain goods and non-payroll services as noted within this policy. Use of the DV does not replace required procurement procedures and therefore cannot be used in situations which require a requisition and purchase order. Use of the MSU Event Card or MSU Travel Card is recommended for MSU sponsored conference costs and off-campus lodging for MSU guests. Use of the MSU PCard is recommended where permitted by MSU Policy and accepted by suppliers. See the Card Usage Chart for examples of allowable card payments

      Prepayment for goods or services are generally not allowed. In unusual circumstances, prepayments should be clearly noted in the Explanation field with the reason for prepayment.

      Payments to independent contractors or other IRS Form 1099 reportable payments (such as rents and royalties) should be made directly to the contractor/vendor via a DV or through a purchase order, not via a reimbursement.

2. Fiscal Officer Approval of Related Agreements for Certain Permissible DV Payments

   The Associate Vice President and University Controller has been delegated the authority to execute agreements for the commitment and spending of university funds on the activities listed below and is charged with the responsibility and policy direction of such activities. These transactions tend to be low risk, unique transactions not applicable to competitive bids and other competitive sourcing efforts.

   The Associate Vice President and University Controller re-delegates authority to sign these agreements to the Fiscal Officer (or their supervisor) overseeing the transaction. This delegated authority applies only to agreements for the activities noted below. The Fiscal Officer (FO) should engage the MSU Office of Risk Management for questions related to insurance and must abide by MSU policy and procedures. Any such transaction over $50,000 will be processed by the Accounting Office to include review and approval by the Associate Vice President and University Controller or delegate.

   The following is a list of permissible DV payments where the Fiscal Officer is delegated authority to approve an agreement:

   • Conference and webinar registration fees only when the MSU Travel Card, MSU Event Card, or MSU Pcard are not accepted. The DV must detail the attendee, date, and location of the conference.
   • Payment of conference costs where the university is the conference sponsor, which include the following:
     • Facility rental.
     • Catering and food service.
     • Equipment rental, such as tables, tents, chairs, etc.
     • Audio-visual services directly associated with conferences and meetings (does not include any purchases of equipment or audio-visual services where a direct connection to MSU’s network is required, other than through Wi-Fi).
   • Payment of off-campus lodging expenses for university guests where the MSU Event Card or MSU Travel Card cannot be used.
     • Arrangements and agreements with package tour providers should be made through MSU Procurement. Study abroad arrangements can be made through the university’s Preferred Travel Agency – StudentUniverse.
   • Payment for catering and other food purchased off campus while not in travel status consistent with the provisions of MBP Section 45.
   • Donations & sponsorships (where MSU makes the donation or sponsorship) – Such as golf outings, conference sponsorships, etc.   All donations must follow the outlined procedures set forth in Section 47 of the MBP.
   • Royalty payments for use of someone else’s intellectual property – (e.g. MSU is paying to use an image or picture belonging to someone else and needs to pay a fee for the use, film screenings).
   • Copyright payments where MSU is paying to use a portion of a published manuscript, book, article, etc. and needs to pay a fee for the use.  There may be an agreement noting how MSU can use the copyrighted materials, or number of times in publications that MSU can use the materials.
   • Honoraria, speaker fees, and performer payments.  See MBP Section 71 for additional information.
   • Training seminars conducted either on campus or off campus unless the training was included as a part of the negotiated purchase of equipment or software, etc.

   Other permissible payments (any contracts or agreements must be signed by an authorized individual per the Delegation of Signature Authority memo):

   • Legal services approved by the Office of General Counsel, claims and settlements, expert witnesses, and mediators.
   • Taxes, insurance, union dues, appraisals, employee deductions.
   • Non-MSU institutional scholarships and fellowships.
   • Medical, dental, counseling/psychiatric services, Medicaid Enhanced Reimbursements.
   • Refunds ($2.00 and greater).
   • Research participants.
   • Nonresident alien contractual services using the NRAPSC ($25K and above require Requisition/PO).
   • Small-scale advertising without contracts under $25,000, e.g., newspaper ads, magazine ads, billboards, etc.
   • Contracts signed by other Delegated Authorized Signers, such as venue performance agreements, physician adjuster, student clerkship/education, Concessions stand operator agreements.
   • Miscellaneous services under $2,500 that do not require a signed contract or agreement.
   • Publication costs..
   • Gifts to guests, donors, etc.
   • Prizes for competitions and drawings.
   • Stipends for program participants.
   • Donations and sponsorships in compliance with MBP Section 47.
   • Rentals for space, small equipment:
     • Land and property lease agreements must be signed by other Delegated Authorized Signers.
     • Small equipment (such as tables, tents, chairs) agreements may be signed by the Fiscal Officer.
   • Royalty distributions for Intellectual Property/Patent agreements (MSU Press, MSU Innovation Center).
   • Books and subscriptions (where the MSU PCard cannot be used).
   • Parking for non-MSU space.
   • Memberships in professional organizations and associations when the MSU PCard is not accepted. Memberships must be in accordance with university policies outlined in MBP Section 47.
   • Required employment licenses (pesticide application, controlled substance, etc.), or MSU required licenses and fees (boiler, elevator, food, liquor, raffle, accreditation, inspection, etc.).
   • Supplies purchases under $2,500 where the PCard cannot be used.
   • Livestock, athletics tickets.
   • Utility payments for university installations.
   • Department phone charges (toll-free numbers, non-MSU campus office phone systems).
   • Reimbursement to individuals who use their own funds for legitimate university business purposes.
     • Reimbursement is limited to materials or services paid directly by the individual and must conform to Manual of Business Procedures and MSU Procurement policy.
     • Reimbursements must be submitted within 90 days of the transaction/purchase date.
     • Travel Reimbursements are made through Concur.  See MBP Section 70.
   • Subcontract payments for sponsored agreements, or infrequent, non-sponsored agreements signed by other Delegated Authorized Signers.
   • Reimbursement of a petty cash advance fund.

   A short video outlines signature delegation and changes to Section 75.
   
    

3. DV Preparation

   DVs are input by the initiating department using the KFS Financial System. Required fields are noted with an asterisk*. Refer to Exhibit 75–A for a list of Payment Reasons.

   Only one person or company can be paid on a single DV.

   The business purpose for payment must be indicated in the Explanation field and should include dates, where applicable, such as in the case of performers or memberships.

   A check (with stub) is the only document the vendor will receive. The DV includes a Check Stub Text section in the Payment Information tab. Text included in this section will appear on the check stub and will be crucial information for the vendor to use to credit your payment. Use this section to include invoice number, account number, customer number, or other descriptive text to ensure that your payment will be properly credited by the vendor. Do not include the business purpose in the Check Stub Text field. In almost all cases, the Check Stub Text information will be sufficient. When vendor ACH payments are made, the Check Stub Text field is included with the electronic payment. In very rare situations, a document may need to be sent with payment and this will require Special Handling (see item IV). 

   The Wire Transfer tab must be completed when payment is requested via a wire. Required fields are noted with an asterisk on the Wire Transfer tab. Banking information for an individual needs to be attached to the vendor record in KFS. Banking information for an entity/company must be attached to the DV, or to the vendor record in KFS. Banking information may be supplied using the Wire Transfer Form, email, invoice, or other method. 

   Michigan sales and use tax should not be included in the total vendor payment as MSU is exempt. Exceptions are:

   1. When proceeds have been collected from participants or a taxable agency account is being used (non-MSU funds), in which case sales and use tax should be included.
   2. When processing a reimbursement where the individual already paid the sales or use tax.

   Supporting documentation, including itemized, paid receipts, invoices, or contracts explaining the reason for the payment, must be attached to the DV with a note in the Notes and Attachments tab. Departments must retain original invoices and receipts on file until the DV has posted to the general ledger. 

   Reimbursement DVs that contain multiple receipts and business purposes should have a completed Reimbursement Worksheet (refer to Exhibit 75–B) attached to the DV. The worksheet provides a mechanism to list multiple business purposes, as well as facilitates a total reimbursement amount.

4. DV Restrictions

   Disbursement Vouchers cannot be used to pay compensation or honoraria unless the payee meets the criteria of an independent contractor (see Section 76).

   Disbursement Vouchers cannot be used to pay enrolled students or employees for services of any kind. Payment must be processed through HR/Payroll.

   Disbursement Vouchers cannot be used to award scholarships or grants to currently enrolled students. These payments must be channeled through the scholarship authorization process in the Office of Financial Aid. 

   Additional prohibited payments include:

   1. Infrastructure Planning and Facilities supplies including paint, plumbing, electrical, heating, ventilation and air conditioning or other building supplies where federal, state, local or university building codes apply.
   2. Purchase of hazardous materials including cleaning solvents, controlled substances, radioactive materials, weapons, and ammunition.
   3. Recurring payments, such as equipment rentals or leases and standing open orders.
   4. Software not in compliance with UPL-IT Procurement policy, computers (desktop, laptop, tablet, etc.), printers and copiers.
   5. Maintenance and repairs to machinery and equipment under a Purchase Order contract.
   6. Purchase of uncrewed aerial vehicles (UAVs) and uncrewed submersible vehicles (USVs), commonly referred to as “drones”. This includes both complete systems, and system components.

   Questions concerning the propriety of using a Disbursement Voucher should be addressed to the Accounting Office, Hannah Administration Building, 426 Auditorium Road Rm 360, telephone 355-5000, email accounting@ctlr.msu.edu.

5. DV Routing

   For all reimbursement related e-docs (including DV’s), if the Fiscal Officer (FO) is the payee or the custodian/recipient of a Cash Advance, the e-doc must be ad hoc routed and/or approved by a FO delegate, or an equivalent separately reporting position. Lack of the required ad hoc routing will result in Accounting's disapproval of the e-doc. 

   For reimbursements to employees, if the employee is not the DV initiator, the DV must be ad hoc routed to the employee for approval/verification of expenses incurred. Lack of the required ad hoc routing will result in Accounting's disapproval of the e-doc. Students, on-call, temporary, and faculty no-pay employees should not have ad hoc approvals added to the DV.
   
   A DV charged to a research grant account (RC sub-fund) will automatically route to the Office of Contract and Grant Administration for approval if required.
   
   A Disbursement Voucher of $25,000 or more will automatically be routed for College/MAU level approval.
   
   After audit, Accounting will approve the DV for payment, or disapprove and provide an explanation. If disapproved, notification will be routed to the Action List of the initiator and all approvers.
   
   Checks are mailed directly to the payee, or, if reimbursing an employee who receives payroll via direct deposit, funds will be direct deposited. Vendors may also receive payment through one of several methods of electronic transfer (ACH, credit card, wire).

Vendors have to be pre-established and approved before a Disbursement Voucher can be initiated.

There are three types of vendors, plus employees, in the financial system.

1. Special Payment (SP) Vendors

   • Used for research participant payments ($150 or less) or non-employee reimbursements.
     • Cumulative payments to any one participant of $600 or more during the calendar year require collection of the name, address, and social security number for tax reporting purposes and must be forwarded to Accounting (Administration Bldg, 426 Auditorium Rd, Rm 360) by December 31st.
   • Does not require a Tax ID.
   • Requires a remit address.

2. Disbursement Voucher (DV) Vendors

   • Used for the purchase of goods or services.
   • Requires a Tax ID.
   • Requires a remit address.
   • W-9 is required for business entities.

3. Purchase Order (PO) Vendors

   • Can be used on a DV. Can only be created by Procurement.
   • Requires an EIN.

4. Employees

   • All employees are automatically entered from HR. No changes may be made to employees via the financial system.

   Vendor additions: At the Main Menu screen under “Lookup and Maintenance”, select Vendor to go to the Vendor Lookup screen. Look up the Vendor to see if it is in the financial system. If yes, you may proceed to the DV and initiate payment to the vendor. If no, select create new in the upper right corner of the Vendor Lookup screen and complete the Vendor e-doc. The vendor’s W-9 must be scanned and attached in the Notes and Attachments section for all vendors except for sole proprietors/individuals.

The BI report named “Voucher Payments by Payee” is available for users to run in order to ascertain DV payments to a particular payee. The report contains prompts to allow the user to filter for the data needed.

Special handling situations include checks or wires requiring expedited handling, routing checks to an address other than the payee’s, or including documents to accompany the mailed check. 

Requests for expedited handling will be accommodated and processed on the next regularly scheduled check printing day. Checks are currently printed on Tuesday’s and Thursday’s. Requests received by Accounting by 10am on a check printing day will be processed that day. All others will be processed on the next check printing day. A request is deemed to be received by Accounting when a fully approved (including Contracts & Grants when applicable) DV is available for Accounting approval. 

For all special handling situations, departments are assessed a processing fee of $15 per DV. The following steps must be completed: 

Payments to nonresident alien payees of compensation, rents, royalties, prizes, awards, scholarships or fellowships for non-enrolled students, allowances, and reimbursement of undocumented travel expenses are subject to special Internal Revenue Service rules. See MBP Section 77 concerning payments to nonresident aliens. 

The University is a subdivision of the State of Michigan and is subject to Michigan Public Act 317 of 1968. Pursuant to the act, the University may not enter into a contract with a Supplier that is affiliated with a University Employee without first disclosing certain information to the University’s Board of Trustees and subsequently receiving approval from the Board of Trustees through a formal vote.

The University is subject to federal procurement rules and regulations. Pursuant to those rules and regulations, an Employee must not be in a position to make a procurement-related decision if their personal, professional, or economic interests (or those of their immediate and extended family members) may be directly influenced or affected by the outcome. These rules and regulations apply to all purchases, irrespective of payment method or paying account, including the Disbursement Voucher.

Employees must prevent organizational conflicts of interest, which occur when the University is unable or appears to be unable to be impartial in conducting a procurement action involving an Affiliate. To prevent organizational conflicts, Affiliates seeking to do business with the University must be treated identically to unaffiliated third parties.

• Exhibit 75–A Disbursement Voucher Payment Reasons
• Exhibit 75–B Reimbursement Worksheet