3401 General Payment
Policy Sections
3401.1 Requests for Disbursement of University Funds
3401.2 Authorization of Disbursements
3401.4 Yale Internal Systems Invoice Interface
Scope
This policy addresses the University’s requirements and preferred practices for disbursements of University funds (except funds for salaries, wages, and other compensation for employment, which are governed by Policy 3501 Payroll). It applies to all Yale Community Members participating in activities involving the disbursement of University funds.
This policy does not apply to the sourcing or purchasing of goods and services. Policy 3201 General Purchasing covers the University’s rules on those subjects (e.g., purchase orders, PCard use, out-of-pocket expenditures) and their supporting procedures.
Policy Statement
Yale Community Members participating in activities involving the disbursement of University funds must request such disbursements in accordance with the University’s designated method(s). The University disburses funds pursuant to established terms, as defined in Section 3401.3.
Reason for the Policy
In support of its mission, Yale is entrusted with funds from numerous sources and conducts complex operations, often involving the disbursement of funds. The University is committed to ensuring that all Yale Community Members utilize University funds and exercise their responsibilities appropriately. This policy establishes requirements and preferred practices to promote sound fiscal control, accurate and timely disbursement of funds, and compliance with applicable laws, regulations, policies, and other relevant requirements.
Definitions
Community Member
An individual who, by virtue of their affiliation with the University, is subject to the policies of Yale University. Community Members include faculty, staff, students, alumni, affiliates, and any individuals whose relationship with the University (for any relevant period of time) subjects them to Yale’s policies (e.g., sponsored identities, suppliers).
Invoice
A Supplier’s request for payment with a statement of the sum due and a list of the goods or services provided.
Supplier
A person or organization that provides goods or services to the University or is reimbursed by the University. The term Supplier is used interchangeably with the term vendor.
Policy Sections
Yale Community Members participating in activities involving the disbursement of University funds must request such disbursements in accordance with the University’s designated methods. Failure to utilize the appropriate designated method may result in delays in disbursement and, in some instances, may result in refusal to disburse funds.
An Invoice is the University’s preferred mechanism for requesting a disbursement of University funds. Procedure 3401 PR.04 Submitting Invoices for Payment details the required processes for requesting disbursements via Invoice.
For certain business cases (primarily those in which obtaining an Invoice is impracticable), other preferred mechanisms for requesting disbursements are available. A Supplier Invoice Request (detailed in Procedure 3401 PR.02 Supplier Invoice Request) is the University’s preferred mechanism for the following business cases:
- Expense reimbursements (non-employees)
- Honoraria;
- Interest payments;
- License fees and subscription payments;
- Loan payments;
- Refunds;
- Royalty payments;
- Tax payments; and
- Utility payments.
The table below details the University’s preferred mechanisms for requesting disbursements for other specific business cases:
|
Business Case |
Preferred Mechanism |
|---|---|
|
Cash advances |
Procedure 3215 PR.03 Yale Spend Authorization (Cash Advance) |
|
Expense reimbursement (employee) |
Procedure 3215 PR.02 Yale Expense Management (PCard and Out-of-Pocket Expenses) |
|
Human research study participant remuneration |
Procedure 3417 PR.01 Human Research Study Participant Remuneration |
|
Lease payments – equipment |
Policy 4209 Equipment |
|
Lease payments – real estate |
Policy 1800 Real Estate Leases |
|
Prizes, awards, and stipends |
Procedure 3401 PR.03 Disbursing Funds for Prizes, Awards, Stipends, and Fellowships |
|
Subrecipient payments |
Procedure 1307 PR.02 Managing Subrecipient Activity Associated with Sponsored Programs |
Accounts Payable may establish recurring payments for transactions of fixed amounts occurring at regular intervals over a specific time period. Procedure 3401 PR.08 Recurring Payments details the processes for requesting that Accounts Payable establish recurring payments.
3401.2 Authorization of Disbursements
The University disburses funds only when requests for disbursement are properly authorized, in accordance with the procedures referenced in Section 3401.1. Disbursements require various approvals, depending on the business case for the disbursement, the distribution mechanism, and the dollar value involved. As applicable, the electronic system business processes supporting each business case for disbursements are configured to automatically route to the appropriate individual(s) to obtain the necessary approvals.
A. Payments to Third Parties
In general, the University does not authorize payments to third parties (i.e., an entity or individual other than the entity or individual directly involved in the activity with Yale for which disbursement is requested). Under exceptional circumstances, however, such a payment may be warranted. All requests for payments to third parties must receive prior approval pursuant to Special Situations & Exceptions, below
3401.3 Standard Payment Terms
The University disburses funds pursuant to established terms dependent upon the recipient of the funds, as detailed in the table below:
|
Standard Payment Terms |
Recipient of Funds |
|---|---|
|
Net 45 (approved transactions disbursed within 45 days of invoice date). Net 45 is the default, unless otherwise negotiated and agreed to by the Procurement Department |
|
|
Net 30 (approved transactions disbursed within 30 days of invoice date) |
|
|
Net 30 (approved transactions disbursed within 30 days after receipt of invoice) |
|
|
Upon Receipt (disbursed next business day after transaction is approved) |
|
The University authorizes certain departments to process invoices in a decentralized manner, using subsystems that interface directly with the Accounts Payable system and automatically generate payment requests. To be considered for authorization, the department’s subsystem interface must meet established design standards.
Authorized departments must adhere to applicable University policies and must maintain a sound internal control environment pertaining to their decentralized activities.
Exceptions to this policy must be approved by the Controller’s Office, in consultation with the Chief Procurement Officer, Provost’s Office, General Counsel, or an Officer of the Corporation, as appropriate.
Roles & Responsibilities
Accounts Payable
- Manages the University’s processes for disbursements made pursuant to this policy.
- Reviews requests for disbursements made via Supplier Invoice Request.
- Disburses University funds in accordance with the provisions of this policy.
- Periodically reviews the University’s processes for disbursements to monitor the effectiveness and efficiency of those processes.
- Periodically conducts quality assurance (“QA”) reviews of this policy, in accordance with its QA standard operating procedures.
Approver
- Reviews requests for disbursement of University funds in accordance with the Approver Responsibilities detailed in Policy 1101 Guiding Principles for University Operations and Procedure 1101 PR.06 Approval Authority and, as appropriate, approves those requests.
- Departmental Approvers (lead administrators or their designee(s)) hold primary responsibility for reviewing requests for disbursement of University funds originating in the department(s) over which they have fiscal oversight. They must review and, as appropriate, approve such requests in accordance with the Approver Responsibilities detailed in Policy 1101 Guiding Principles for University Operations and Procedure 1101 PR.06 Approval Authority.
Chief Procurement Officer (or designee)
- Responsible for the development, implementation, and enforcement of this policy.
Director, Accounts Payable (or designee)
- Oversees and manages Accounts Payable.
- Reviews and, when appropriate, authorizes certain requests for disbursement, per Section 3401.2.
Tax Department
- Provides guidance and responds to questions concerning tax withholding and reporting of payments. Applicable related policies include, but are not limited to:
- Policy 3410 CT Income Tax Withholding for Nonresident Athletes and Entertainers; and
- Policy 3415 Payments to Individuals Who Are Neither Citizens nor Permanent Residents of the United States.
University Controller (or designee)
- Interprets policy.
- Reviews exception requests and, when appropriate, grants exceptions.
- Reviews and, when appropriate, authorizes certain requests for disbursement, per Section 3401.2.
Yale Community Member
Requests disbursements of University funds in accordance with the University’s designated methods.