THE UNIVERSITY OF NORTH CAROLINA
AT
CHAPEL HILL

 
 
 
 

Associate Vice Chancellor	CB# 1000, 304 South Building
for Finance	The University of North Carolina at Chapel Hill
	Chapel Hill, NC 27599-1000

 
 
 
 

To:	Deans, Directors and Department Heads
From:	Roger D. Patterson, Associate Vice Chancellor for Finance
Re:	Guidelines for Overhead Receipts Funds and Selected Expense Guidelines by Fund Group

 

Overhead Receipts Funds were recently transferred from State Funds to Institutional Trust Funds. This change affects the types of expenses that may be paid from Overhead Receipts Funds. Since Overhead Receipts are now Institutional Trust Funds, there is more flexibility in the types of expenses allowed. However, this flexibility must be balanced with prudent management and the recognition that the funds represent reimbursement of indirect costs incurred supporting contract and grant awards.

Therefore, the following guidelines are provided regarding appropriate uses of Overhead Receipts. The expense categories noted below are areas for which questions generally arise.
 

Expense Category	Fund Authority Guidelines
Business entertainment	The purchase of alcohol is not allowed. Business entertainment is an allowable expense if it is necessary for and related to the conduct of an academic program or for the recruitment of faculty, staff, or students. Business entertainment for lunches, receptions, or other events related to employee recognition, holidays, or other occasions for departmental faculty and staff is not allowed.
Employee awards	Employee awards, including gift certificates, should not be paid from Overhead Receipts.
Instructional costs	Faculty salaries and other costs of instruction should not be paid from Overhead Receipts.
Membership dues	Membership dues are allowed based on departmental policy.
Moving expenses	Moving expenses paid to or on behalf of faculty or research staff are allowable.
Office appliances	Expenses for office appliances (e.g. microwaves) are allowed if the need is sufficiently documented.
Professional License and Certificate Fees	Expenses for professional license and certificate fees are allowed.
Scholarships and Fellowships	Scholarships and fellowships are allowable. A separate account should be established to provide segregation of financial aid funds.
Training grants	Training grants should not be paid from Overhead Receipts.

Also, the composite benefit rate (which covers unemployment compensation, workers’ compensation, a certain portion of short-term disability pay, and the health benefit for those on professional leave without pay) of 0.2% and the severance pay benefit rate of 0.2% are being assessed on appropriate salaries of Overhead Receipts Funds as they are on other Institutional Trust Funds. The composite benefit rate and the severance pay benefit rate will also apply to new positions that are established in Overhead Receipts.

Questions have been asked about the impact of the transfer of Overhead Receipts on position control issues. Individuals who are in EPA permanent positions may be paid from budget balances available. Individuals who are in SPA or time-limited positions will require permanent funding. This policy will be reviewed when the Human Resources Information System (HRIS) is implemented.

The attached schedule of Selected Expense Guidelines by Fund Group displays expenses for which questions sometimes arise. The schedule provides information on allowable expenses for each expense category based on the funding source. Business entertainment expenses are one category displayed on the schedule. The Business Manual policy statement on business entertainment (Accounting Policy Statement 23) is being revised to provide additional, clarifying guidance. It will be available in the near future.

I hope this information is useful. Please call Donnie Hall if you have a position control question and Dennis Press if you have a question about the guidelines for the Overhead Receipts fund authority or the guidelines for selected expenses.
 
 
 

Selected Expense Guidelines by Fund Group