Frequently Asked Questions

General Questions

1.  Can I purchase refreshments using state funds?

Purchase of refreshments shall be considered a valid operating expense of the agency to the extent that such purchases serve as a public purpose.

Office of State Finance policy 

2.  Why do we have to do requisitions/purchase orders?

Both encumbered and non-encumbered claims are requested to have a requisition/purchase order as required by the Oklahoma State Finance office.

Office of State Finance Policy

 3.  Can gifts be purchased using state funds?

The purchase of gifts are not authorized without specific statutory authority.

Office of State Finance Policy

4.  What are the requirements for purchasing a membership?

Membership purchases are generally prohibited, but there are two exceptions.

Office of State Finance Policy

5.  Can I transfer money from state funds (E&G) to a cash account?

This is prohibited. However, an expense correction after the fact is allowable.

Office of State Finance Policy 

6.  Can we prepay an invoice?

UCO is not permitted to pay for goods before they are delivered or services before they are rendered.

Office of State Finance Policy

7.  Can I pay for a table sponsorship with E&G funds?

State appropriated funds can’t be used to make a donation. 

8.  Can Education and General Funds (E&G) funds be used to buy promotional items?

Yes, as long as the items are being used in a public forum. 

9.  Can E&G funds be used to purchase entertainment and food for a reward?

E&G funds may only be used to purchase food during the normal course of business, not as a reward after the fact.  Entertainment must be paid from cash accounts.

10.  How do Study Abroad Trips and Funding Sources work at UCO?

UCO has an internal practice to not use E&G funds to pay student travel.  This is not a state requirement or a board policy.  UCO has granted exceptions to this practice in the past.  If the tour is for credit, then the entire expense could be paid from E&G.  The student fees that are paid to supplement the travel costs can be deposited (as an open ended course fee) into E&G funds to pay for the entire trip from one source of funds.  The student fees collected should still cover the costs of the faculty travel.  A separate cash account does not have to be set up.

Under our current practice:

For credit trip - If a separate cash account is used, then the student fees should cover the cost of the students travel plus the cost of the faculty travel.  If E&G funds were to be used to supplement the cost of the trip, then the trip costs would have to be broken down to justify that E&G funds were being spent for faculty expenses only. 

If the trip is not for credit, the only way that E&G funds could be used would be to justify the business purpose of the trip for the faculty expenses.  (If there is truly a learning experience involved, then it would be better to give some credit for the trip to begin with.)    The faculty member would only be a sponsor in this capacity.  The student fees would have to cover all costs. 

11.  What is a Treasury Fund?

A treasury fund is any fund maintained by the State Treasurer's Office.

Office of State Finance policy

12.  What are Appropriated Funds?

Appropriated funds are those funds established by the Legislature, numbered for accounting purposes by the Director of State Finance and maintained in the state treasury to record the general operating activities of the State.

Office of State Finance policy

13.  What are Depository Accounts (or "Depository Funds")?

Official depository accounts are established and maintained within the state treasury. The two types of official depository accounts are Agency Clearing Accounts and Agency Special Accounts.

Office of State Finance policy

14.  What is a Receipt of Monies by State Agencies?

 Monies received by a state agency, regardless of revenue source must be deposited in state treasury funds.  No monies will be deposited in banks or other depositories unless such bank account is maintained by the State Treasurer or is approved for the deposit of authorized Imprest Cash Funds (petty cash funds).

Faculty/Staff Related Questions

1.  How do I handle, as a faculty member, teaching a seminar that occurred during my regular class time and received payment from the outside source?  I did receive approval to be away from the class. 

If the work is performed during a period that a faculty member was scheduled to be working (teaching class) and there was not a salary deduction to them for missing assigned work, then the external funds would constitute a duplicate payment.  In this case, one of two things should happen. 

1.  UCO has to dock the faculty member for the amount of pay commiserate with the time missed from UCO, and then let them have the external pay. 


2.  We retain the external pay as reimbursement for pay we've given him/her already for that time. 

Since faculty usually do not have firmly set hours of operation, then usually they manage to do the external work of this nature outside of class hours, which causes no issue with payment. In some instances, UCO has contracted with the third party to do a job, and assigned the faculty member to do it.  Like a grant, the faculty member cannot make in excess of 100% of their regular salary.

If the above situation has occurred and the check is made payable to the employee directly, it is the employees responsibility to report the payment to UCO.  There is a Non Contemporaneous Work form that can be filled out and submitted with the check.

2.  Can a guest speaker receive an honorarium rather than direct payment?

Example: We have a guest speaker coming to our university in the next week or so.  He is requesting that instead of paying him directly he wants us to pay his honorarium to an organization as a contribution. 

The Assignment of Income Doctrine disallows this process.  It provides that an individual, who assigns his or her right to receive income, rather than receiving the income directly, retains the tax liability associated with that income. Under this doctrine, an individual is not allowed to shift the taxation of income by making a gift or gratuitous transfer of income to another individual or organization, including the University.

Ref: Revenue Ruling 69-102.

3.  What is the process on taxability of gift cards, certificates, and coupons for employees?

Giving gifts to employees is restricted and should only be given as part of a formal employee recognition program. However, any gift cards, certificates, and coupons given to employees are to be included in the employee’s taxable income. They are considered by the Internal Revenue Service to be cash or a cash equivalent and do not meet the requirements to be excludable as a de minimis fringe benefit. Even when an employer provides gift cards, certificates, or coupons to purchase a turkey, ham, or other nominal value property, these are considered wages and are subject to income and employment taxes. This is true even when the card restricts the items purchased, the time to use the coupon, and any unused portion is forfeited. Cash equivalents do not meet the de minimis fringe benefit requirements.

Ref: Oklahoma Statutes, Title 74, Sections 4121 and 4122; DCAR Sept 2010

4.  Is there a maximum discount percentage that employees can be given for a university summer camp for the discount to not generate taxable income for the employee?

Yes. To constitute a qualified employee discount under IRC 132 for services, the discount must not exceed 20% of the price charged the non-employee public. The discounted amount that exceeds the 20% limit, if any, constitutes imputed income to the employee reported on IRS Form W-2 subject to all applicable withholds for income and employment tax.

5.  How does awarding prizes at the University work? 

Taxable prizes usually involve a payment as an award or recognition for a special achievement, skill, knowledge, or renown in a specific area.  Prizes may also be awarded for those who excel in contests or competitions.  When awarding a prize, the grantor is not required to specify that the recipients use the funds "for the purpose of aiding his study, training, or research."  The prize may simply recognize an achievement or renown, and the funds may be used for any purposes at the recipient's discretion.  In such instances, the entire sum is considered taxable income and subject to 1099-MISC reporting even if the recipient chooses to use the funds for educational purposes.  These types of prizes should be processed on a Check Request through Financial Services and the recipient will receive a 1099.  If the prize is awarded to an employee the payment is to be made on an authority to pay and processed through payroll.

6.  Is a contribution fully tax deductible where the donor is awarded the chance to win a prize? 

The full contribution is tax deductible because the ticket/raffle ticket/entry chance is equal to the value to win the prize.  They were purchasing the “chance to win” the prize. The purchase price of a raffle ticket always is equal to the value of the chance to win the prize.


7.  What is an encumbrance and how is it used?

For university purposes, an encumbrance is a claim or reservation on available cash.  The University has three types of encumbrances.  A General Encumbrance is used for paying one type of expense but for multiple vendors, such as electricity for the university.  A Requisition is a temporary reservation of cash and is only a request to purchase merchandise or services.  A Purchase Order is a legal request to purchase merchandise or services and is a claim on available cash.

8.  What happens to encumbrances in the system at year end?

General encumbrances and requisitions close automatically at year end.  Purchase orders are closed if all merchandise has been received and paid before year end.  Open purchase orders will roll to the next fiscal year; one time and as committed budget, meaning it can only be used to fulfill the merchandise or services that were originally encumbered.

The only encumbrances that should roll are for merchandise/supplies ordered and received by June 30th that are not able to be processed through the A/P system by June 30th.  Merchandise ordered but not received by June 30th is not current year but future year merchandise.  There are exceptions for capitol projects and construction that cross fiscal years (capitol project process).  This is not true for services performed for long term consulting services and installation of software, etc.  Those services performed in the current year should be paid with current year funds.  Services performed mid-contract but in the new year are new year costs and should be represented by a new purchase order, not an existing purchase order.  Two purchase orders would be needed in this situation.  Planning is the key to spending funds timely.

Student Related Questions

1.  Is it permissible to use student fee funds from this year's budget to pay the registration fee for students to attend a conference in November( cross fiscal year)? 

As long as the trip is for the students it can be paid from the student fee organization.  For all registrations that we are paying from cash organizations that are crossing the fiscal year, the purpose of the travel must meet the purpose of the cash funds being used even if the intention is to change the accounting to a different organization after the new year begins. We can receive an early bird discount if we do this by May 15.

Prepayment of registration fees when a discounted fee is offered if registration is paid in advance. To qualify for this procedure, the registration fee must, 1) result in a discount to the state, 2) allow for substitution of participant, and 3) provide for 100% refund should the event be canceled. Documentation on the sponsor's stationary describing these facts should accompany the claim submitted for payment. In addition, any payment so approved shall be timed as to arrive at the sponsoring vendor not earlier than the absolute due date deadline for the discounted registration.  All three rules must be met.  Further instructionsare on the Purchasing website.

2.  How are students who are awarded the McNair award paid?

Any student receiving a McNair award will be paid through the student worker payroll system.  This will not affect any financial aid the students will be receiving.  The method used for this payment ensures that students are getting paid for the hours they are spending on their research.

3.  Must students pay federal tax on the research stipend they receive from the McNair award?

The answer is typically that no federal tax payment is necessary, either because the stipend can be applied to the student's overall tuition, fees and book allowance, or because the student does not earn enough income overall to be taxed. But in some instances students may be required to pay a federal tax. Please read the information below.

Federal Tax Information concerning McNair award

4.  If I determine that the second part of the IRS is not met, how can I keep my institution from withholding part of the student's stipend? 

Most McNair students do not have sufficient income (even when the stipend is included) to have taxable income.  If the student anticipates he or she has no taxable income, the student can indicate that on the W-4 form submitted to the University's Business Office.

Oklahoma Tax Commission Related Questions

1.  What sales are subject to Oklahoma sales tax?

Under Oklahoma law, sales tax must be collected on the sale of tangible personal property.  "Tangible personal property" is that which can be seen, weighed, measured, felt or touched or that is in any other manner perceptible to the senses, including electricity, water, gas steam and prewritten computer software for frequent or occasional sales.  The basic rule to remember is that essentially all sales are subject to Oklahoma sales tax unless there is an exemption provided under Oklahoma law.

Oklahoma state law 

2.  The University of Central Oklahoma is a tax-exempt state institution of higher education.  Are sales made by the University tax-exempt?

No.  Although the University is a tax-exempt state institution, this does not mean the University is exempt from charging, collecting and remitting Oklahoma sales tax.  The basic law is that all sales of tangible personal property are subject to Oklahoma sales tax unless there is an exemption provided under Oklahoma law.

3.  Our Department does sell some items to outside parties such as students, faculty/staff, general public or outside organizations.  Is this permissible?  Do I need to charge and collect sales tax on these sales? 

According to State law, sales to students, faculty/staff, the general public, or outside organizations are subject to sales tax unless a specific exemption exists in the State statutes.  From a sales tax standpoint, if you are selling tangible personal property on an ongoing regular basis, you should have a sales tax permit authorizing you to engage in sales transactions.   

*Note:  If you are engaging in the recurring sale of goods or services, such revenue activity may be considered an unrelated business activity and subject to federal and state income tax as well as sales tax. 

4.  When and how do I report and pay sales tax? 

UCO pays sales tax on behalf of the entire institution.  You will have to report your sales and tax to the general accounting office.  Contact Jere Stegall at 974-2489 to provide your organization number where the funds were deposited along with the total amount of income that was taxable.

5.  Who do I contact if I have questions or need assistance with sales tax? 

Questions can be directed to Haley Dumas 974-2572 or Lisa Harper 974-2553.