Topic outline

  • Mars Hill University Business Office Procurement Policies & Procedures Manual

    Approved as of December 2017

    Revisions of these policies & procedures will be reviewed and updated as deemed necessary. myMHU is the latest source for documentation and forms.


      1. Conflict of Interest
      2. Business Ethics
      3. Consequences for Inappropriate Use of Mars Hill University Funds
      1. Charitable Contributions
      2. Departmental/Individual Memberships
      3. Consulting
      4. Employee Celebrations/Gifts
      5. Flowers for Approved Occasions
      6. Student Prizes/Gifts
      7. Payments made to non‐employee individuals
      8. Purchasing Items for Personal Use
      1. Purchasing through internal service providers/preferred vendors
      2. Demand check requests
      3. Cash Advances/Reimbursements
      4. Cash Advances turnaround time
      1. Why Purchase Orders Are Necessary
      2. Requisition Approval turnaround time
      3. Purchase Requisition process
      4. Vendor Quotes
      5. Account Numbers
      6. Financial/Payment

      Mars Hill University funds come primarily from tuition payments from students and from gifts from University supporters and alumni. As a result, it is incumbent on all Mars Hill employees to ensure that they spend University funds appropriately. The purpose of these policies is to ensure that MHU funds are used to support appropriate University business, ensure equitable treatment of employees and prevent inappropriate spending. This policy applies to all MHU employees and any other person authorized to spend funds on behalf of the university.

      The policy applies to all expenditures including purchase requisitions, check requests, advances, reimbursements and credit card purchases.


        “Contract” means an agreement usually greater than $1,000 for the purpose of acquiring items of tangible personal property, capital assets or services. A contract normally follows as the product of a formal design or technical requirements document and a formal competitive selection process.

        “Purchase Requisition” is the form used as the input document to prepare a Purchase Order (PO), which is the official authorization document to order goods or services from a vendor.

         “Purchase Order” is the official document that provides authorization to vendors to deliver goods or services to an ordering department. Use of the Purchase Order provides the necessary accounting trail, receipt documentation and authorization to pay invoices. 

        “Requestor” is the authorized individual completing the purchase requisition for goods or services. The requestor must have a working knowledge of the MHU procurement policies and procedures before submitting a request.

        “Encumbrance” is the amount committed by purchase orders that is deducted from the budget line in the department budget to actual reports.


          Conflict of Interest

          It is a conflict of interest to purchase a commodity or service from a University employee or his/her immediate family, or from a company of which the employee or an immediate member of his family owns more than a 1% of the stock, without written approval from the President. Immediate family is defined as spouse, and the employee or spouse’s children, parents, grandparents, and grandchildren.

          It is acceptable to purchase goods or services from a trustee, donor, supporter, alumnus or other party with a close relationship with the University as long as an arm’s length relationship can be maintained with that party. In other words, their business is subject to the same rules for competition and contracting as are other non‐affiliated vendors.

          Faculty and staff who act on behalf of the University have an obligation to avoid activities or situations which may result in a conflict of interest or the appearance of conflict of interest. Employees must not use their positions to influence outside organizations or individuals for the direct financial, personal or professional benefit of themselves, members of their families or others with whom there is a personal relationship.

          Business Ethics

          In order to avoid a conflict of interest or the appearance of a conflict of interest, at no time should an employee solicit or accept gifts from a supplier or contractor or from a potential supplier or contractor. Gifts which are promotional items without significant value (less than $25.00) and which are distributed routinely by the supplier to clients, are also acceptable. Gratuities or gifts of money to an employee cannot be accepted at any time. Never accept any money, commission, object of value, offer of employment or compensation of any kind which is provided or offered directly or indirectly by a supplier, contractor or subcontractor for the purpose of obtaining favorable treatment in connection with a purchase.

          Consequences for Inappropriate Use of Mars Hill University Funds

          Employees who spend University funds inappropriately, as defined in this policy, as well as managers who approve such expenditures, will reimburse the University, and may also be subject to disciplinary action.


            An important factor in MHU’s Procurement policy is that offices and departments are only permitted to purchase what is approved in the annual budget. ALL FUNDS deposited with the University, regardless of source, are University funds and must be handled in accordance with the University policy. University policy applies to all grant, agency, professional development and budget accounts

            • Operating Budget

              Budget managers are responsible for ensuring the availability of funds prior to the purchase of or the awarding of a contract for supplies, materials, equipment, or contractual services for the University. Purchasers may not commit funds under the management of other offices (i.e. you cannot spend other people’s money). Purchase action may not be initiated in the anticipation of funding that may be provided at some future date. It is the Department Head’s responsibility to periodically review their departmental budget reports. There are some non-operating restricted funds that have budget managers. These funds should have sufficient balance before expenses can be incurred.

              Unbudgeted or “over budget” expenditures are considered an extraordinary situation and must be specifically approved by the Vice President of Finance & Facilities Management and the President.


                Purchase Authorization

                A person must have specific authority to obligate the University to procure goods and services. Any purchase by University faculty or staff members without prior consent by the appropriate approver will be the sole responsibility of the person making the unauthorized purchase. Depending on the circumstances, employees making unauthorized purchases may be subject to disciplinary action.




                $0 - $200


                Budget Manager

                $201 - $500


                Presidential Direct Report/ Controller

                $501 - $1,000


                VP Finance & Facilities Mgmt

                $1,001 – or greater



                Any amount



                Any amount

                Instructional--federal/state/foundation grants

                VP Academic Affairs

                Any amount

                Construction/Non – ITS Equipment

                Director of Facilities/ VP Finance & Facilities Mgmt

                Any amount

                Athletic transactions – including purchase requisitions, invoices, expense reports, travel requests, recruiting travel, all check requests, any additional payroll request, credit card statements


                Any amount

                ITS Equipment

                ITS Director

                Any amount

                Direct report credit card statements


                Any amount

                Direct report travel expense reports


                Any amount

                Facilities blanket purchase orders

                VP Finance & Facilities Mgmt

                $201 or greater

                Bus Office purchase requisitions and invoices

                VP Finance & Facilities Mgmt

                $501 or greater

                Travel expense reimbursements

                VP Finance & Facilities Mgmt

                Any amount

                Contracts/leases or commitments

                President or VP Finance & Facilities Mgmt

                $1,001 or greater

                Check requests

                VP Finance & Facilities Mgmt

                Credit card Statements


                VP Finance & Facilities Mgmt

                $5,000 or greater

                Vendor Invoices

                VP Finance & Facilities Mgmt

                $1,500 or greater

                Travel reimbursement requests

                VP Finance & Facilities Mgmt

                No individual except as indicated above has the authority to obligate the University in any way for goods and services. Individual department heads and senior staff members may establish authorization levels stricter than those specified at their discretion. These changes should be documented and submitted to the Business Office. Delegation of approval authority by a leadership team member must be approved by the President, documented, and provided to the Business Office.


                Employees involved in the purchasing process take full responsibility for understanding the policies and procedures regarding purchasing and vendor relations.

                • Each department should determine the source and availability of funds prior to initiating or submitting a purchase request. 
                • The University’s forms must be completed, approved and signed in advance of all commitments of expenditures.
                • All purchases of goods and services, including contracted services, must be authorized by and signed by the appropriate approver, prior to delivery of goods and services.

                Capital Expenditures

                Capital Expenditures are generally defined as expenditures of $1,000 or greater for equipment, furnishings, buildings, and building repairs. Purchases of items that do not exceed $1,000 should be budgeted for in the department’s operating budget. The annual budget request cycle includes a process for budget managers to request funding for capital improvements.

                Examples of capital expenditures:

                 a) Furniture (office, classrooms, conference rooms, public spaces)
                 b) Equipment
                 c) Building systems (fire, mechanical)

                • SPECIAL REQUIREMENTS

                  Charitable Contributions

                  The authority to use University funds for charitable contributions shall rest in the President’s Office. Individuals or departments may not make donations utilizing University funding.

                  Departmental/Individual Memberships

                  Requests for memberships should be submitted with your annual budget package under the “Memberships” budget line. The University will pay for reasonable departmental memberships; also, reasonable individual memberships may be purchased by the University if they relate to legitimate business needs or position requirements. Some examples include memberships in professional organizations or purchasing organizations which provide benefit to the University. However, individual memberships which primarily provide personal benefit to the individual, not the University, will not be purchased with University funds. Professional Development Funds may be used for individual memberships in professional organizations which provide benefit to the University. All memberships require President’s approval.


                  All paid consulting arrangements will be executed by formal contract. The contracts must be signed by the Vice President of Finance & Facilities Management or the President. The IRS W-9 form must be included for all agreements. No work is to be performed by the consultant before a signed agreement is in place. A purchase requisition needs to be submitted for tracking the encumbrance in the accounting system.

                  Employee Celebrations/ Gifts

                  This includes gift cards, given to anyone for occasions such as birthdays, weddings, Christmas, baby showers, or any similar event will not be reimbursed. The use of departmental funds for this purpose is prohibited. Employees that have graduated from MHU while employed may receive a token appreciation of their achievement.

                  Flowers for Approved Occasions

                  The purchase of flowers for certain approved occasions (birth, get‐well, and death, etc.) must be submitted to the President’s office for approval and processing on behalf of the entire University community. The use of departmental funds for this purpose is prohibited. The VP for Advancement may authorize the purchase of flowers for stewardship purposes/donor relations.

                  Student Prizes/Gifts

                  Student employee appreciation events may be held and the use of University funds is appropriate for reasonable low-cost food, non-alcoholic beverages or other notional item only with approval of the appropriate Division or Department Head.

                  University funded expenditures for gift cards or gift certificates to student employees as a token of appreciation for their work are not acceptable, per IRS regulations.

                  Examples of Inappropriate Expenditures:

                  Parties, Receptions, or Other functions for Individuals—University funds may not be used for non-work related, achievements, events, or receptions for individuals, such as baby showers, wedding showers, housewarmings, or similar activities that are of a personal nature and that are not related to University business. University funds may not be used to purchase individual gifts or gift cards/certificates for such personal celebrations. Spending for non-work related achievements, events, receptions, or gifts for individual colleagues should come from fellow employees. However, using University funds for reasonable low-cost food and non-alcoholic beverages and cards are acceptable for “group birthday celebrations” as part of a monthly departmental staff meeting.

                  Alcoholic Beverages—University funds may not be used to purchase alcoholic beverages.

                  Exceptions to student prizes/gifts

                  Gift cards or certificates may be used as thank-you gifts, prizes, or rewards only to:*

                  Non-employee guest speakers less than $75

                  Non-employee students for campus-wide academic or co-curricular achievements, contests, or competitions; and to provide incentives for participation in student activities and events.

                  Note:  Students who also happen to be employees may accept gift cards or gift certificates as long as they are “not connected to the employment relationship” but rather part of a contest or raffle at a student event).

                  All prizes, gift cards, gift certificates are limited to $75. University funded expenditures for gift cards or gift certificates to student employees as a token of appreciation for their work are not acceptable, per IRS regulations. Gift cards redeemable for cash are not allowed.

                  Payments made to non‐employee individuals

                  Payments for services are made to individuals who are not affiliated with a registered corporation, partnership or may receive payments through the accounts payable system. For example, speakers receiving honoraria; sole proprietor consultants; performers and other individuals performing one‐time services. For tax purposes, such payments are reported to the individual and the Federal Government via IRS form 1099. In order to pay an outside vendor/honoraria for services, the IRS W‐9 form must be completed to collect the above information. Payments to individual service providers will not be paid through petty cash. Purchase order approval and checks will not be issued without the above information.

                  Purchasing Items for Personal Use

                  Using the University’s purchasing system to purchase materials, supplies, or equipment for personal use is strictly prohibited. Should a personal purchase happen in error, individuals are required to reimburse the University within 15 days of the charge. If the reimbursement is not made within 30 days, the individual will be subject to disciplinary action. Exercise diligence when purchasing items via personal credit card for reimbursement. The shipping address must be MHU campus.

                  • PURCHASING METHODS

                    Purchasing through internal service providers/preferred vendors

                    The University has elected to provide for the purchase of certain commodities and services through internal departments or on account with certain vendors. Some of these include travel services, printing, duplicating, internal moves and mail services. Others include Facilities Management providing physical plant and architectural services, as well as ITS providing data and telecommunications services. University buyers are encouraged, and in some cases required, to purchase their supplies and services from service departments located on the campus. This list is updated periodically and is subject to change. Please review for the latest list.

                    PURCHASE ITEM


                    UNIVERSITY CONTACT

                    Car/Van Rental


                    Facilities Mgmt

                    Carter-Humphrey House Rental

                    n/a- internal

                    Fifi DeGroot

                    Office Supplies

                    Office Depot

                    Dept Assistant


                    n-/a internal

                    Copy Center – Kristie Hollifield

                    Misc Supplies

                    n/a internal

                    Bookstore – Dinah Bullman

                    Building/Facilities supplies

                    Lowe’s/Mars Hill Hardware

                    Facilities Mgmt


                    n/a – internal

                    Mail room – Katie Hohler

                    Computer Software/ Equipment

                    Multiple vendors


                    Catering/Food Services


                    Chartwells - Krisi Freshour

                    Cell Phone

                    US Cellular


                    Custom Printing

                    Multiple vendors

                    Marketing & Communications approval

                    Furniture Moves

                    n/a internal

                    Facilities Management

                    Printer/Copy Paper/Toner Supplies


                    Copy Center


                    Demand Check Requests

                    Demand Check Requests are for honorariums, subscriptions and employee cash advances greater than $200. Check requests can be picked up in the business office. Departments should not use Demand Checks to purchase equipment, supplies and services ordinarily acquired through the purchase order process.

                    Cash Advances/Reimbursements

                    For small purchases $100 or less, the cash advance or if after the fact the cash reimbursement form may be used for one-item purchases. Employees must timely submit an employee travel/expense reimbursement form reporting on the expenses incurred with detailed receipts.

                    Check and cash advances must be reported on within 10 business days of receiving the advance. If you are returning money less than $50, please hold submitting the money with the paperwork. The business office will review and email when the reporting is complete.

                    Cash Advance Turnaround Time

                    Please allow for 5-7 business days to receive a cash advance. If you know in advance that you will need multiple cash advances over the course of a semester – for example, a coach for away travel games – you may turn in these cash advance check request to the business office with the appropriate date needed. These will be processed according to the schedule.

                    Cash Advances from petty cash will be processes on Tuesday and Thursdays. Advances via check requests will be available on Fridays.

                    • BUSINESS PROCESS


                      A purchase order assists budget management. Following Business Office procedures assists in spending your department’s budget most effectively. Purchase orders also create a budgetary commitment, which helps to prevent an unexpected shortage of funds at the end of the fiscal year. A purchase order also is necessary to track orders.

                      Following business office procedures generally results in faster delivery times and prompt payment of your orders because a purchase order is the only way business office and your department can track the order. Additional workload is created when an order is placed without following the Business procedures and can result in a delay in payment. A purchase order, or check request are the only authorized methods of purchasing goods or services for the University.

                      Do not make any commitments of MHU funds yourself by placing an order or signing a contract without following Business Office procedures. You could be held legally liable and responsible for payment of unauthorized purchases. Note that an “after-the-fact” purchase order cannot be issued after placing an order with a vendor. Purchase orders are not required for purchases under $200. Attempts to circumvent the purchasing process may be subject to disciplinary action. Items purchased under contract often have associated installation, training or maintenance costs. Purchasers should exercise care to ensure that sufficient funding is available to offset those costs both at the point of acquisition and on an ongoing basis.

                      The President and the VP of Finance & Facilities Management will determine whether the documentation is satisfactory for bidding, proposals or negotiation and whether the documents are sufficient to create an adequate contract document. Legal review is often necessary. If the contract is part of an externally sponsored grant or contract, the grant manager should review and confirm for specific grant stipulations. Contracts will be signed by the President and/or the VP Finance & Facilities Management. All contracts will need approved purchase order to track the encumbrance in the accounting system.


                      Business office approves a requisition by confirming that adequate information, specifications, and backup information are included. Business office with email the approved purchase order to the requestor. The business office may contact the requestor if additional information is necessary. Please allow up to 10 business days from the start of submission of the requisition through receiving the approved purchase orders.


                      A Purchase Requisition is the form that is utilized to prepare a Purchase Order.

                      1. Requestor enters the requisition information into the Purchase Requisition form.

                      2. Requestor prints the form and submits to an approver.

                      3. Approver signs the form.

                      4. Requestor submits approved requisition form and supporting documents to the Business Office (Purchase Request/Purchase Order).

                       5. Business office reviews, processes the request, and creates a Purchase Order if needed.

                       6. Business office distributes the PO to the requestor and requisitioning department.

                      After receiving the approved purchase order, the appropriate buyer may place the order as per the approved amount. Any deviation for from the original purchase order is prohibited with exception to a 10% allowance in total amount. If circumstances arise that a modification to the original purchase order need to be made, a new purchase requisition should be submitted with the updated information for approval.

                      Purchase Orders provide authorization to outside vendors to deliver the goods or services to the ordering department. Use of the Purchase Order provides the necessary accounting trail, receipt documentation and authorization to pay invoices.

                      If submitting a purchase order for approval but plan to be reimbursed via an expense report, submit your name in the vendor section with the name of the company purchased from in the description section.

                      The purchase order should include:

                      1. Appropriate approval signatures
                      2. The appropriate accounting data (department and object code)
                      3. Project name and number, if applicable
                      4. Project coordinator name and phone number
                      5. Address and person the invoices should be directed to
                      6. A message to the contractor stating that invoices must include Purchase Order #/Contract #, and Project #

                      Departments/Budget managers are not authorized to:

                      1. Instruct the consultant, contractor, or service technician to start work before the agreement is fully executed and the purchase order issued.

                      2. Change the scope of the agreement without following the formal purchase document amendment process.

                      3. Direct the consultant, contractor, or service technician to perform work that is not specifically described in and funded by the agreement.

                      4. Extend the time period of the agreement without execution of an approved amendment or purchase order revision.

                      5. Allow the consultant, contractor, or service technician to incur any additional costs over the limit set by the agreement.

                       6. Sign an agreement unless explicitly authorized by the President.

                      Purchase Order Changes Requests

                      If there is a need for cancellation or modification of Purchase Orders must be submitted to in writing (email is acceptable) by an authorized department representative stating the reason for the change, as well as, referring to the Purchase Order number and the supplier involved. This policy particularly applies to those circumstances where increase in the dollar amount of the order is required. Written approval for increases in PO amounts must be from the budget manager and must be approved the President for items totaling over $1,000. No changes to the Purchase Order amounts will be made without this documentation. If you need to made a change to a vendor after an approved purchase order is received you will need to cancel that purchase order and submit a new purchase requisition.


                      VENDOR QUOTES

                      Small Purchases (< $1,000)

                      Purchases under $1,000 require little formal documentation; they are likely to be purchases, with prices that are readily available from many vendors. A copy of prices checked from a catalog, internet or sales rep should be attached to the purchase requisition. Conduct all business transactions in a manner that maximizes opportunities, increases quality (if a factor), and reduces the cost of the purchase.

                      Medium/Small Purchases ($1,000 to $5,000)

                      Purchases from $1,000 to $5,000 should have written quotations and simple purchase or performance descriptions. Inquire in the open market to ensure an advantageous price and quality. The purchase requisitions should document the inquiries made and offers received from at least three sources.

                      Medium/Large Purchases ($10,000 to $150,000) – Up to the “Simplified Acquisition Threshold” (currently $100,000)

                      Purchases from $10,000 to $150,000 should be treated more formally, though the acquisition procedures can still be somewhat streamlined. Purchases over $10,000 require greater documentation of cost allowability, review, and the vendor selection.

                      Request competitive quotes, in writing, from at least three different sources. The file shall document each invitation made and offer received. Document Prices: Maintain files on all quotations solicited and offers or bids received and any criteria for selection. In all instances in which the lowest bid is not awarded in the contract, justification for the selection must be contained in the file.

                      Multiple Vendor Quote Exceptions

                      There are some circumstances where competition is not needed or is not appropriate. These include ongoing, multi‐year professional services agreements and situations where there is only a single or sole source for the product or service.

                      1. Multi‐year agreements
                        Certain agreements for professional services that typically span multiple years such as legal, audit, investment management, food services, health service, etc. do not need to be re‐ competed on a recurring basis. These arrangements are, however, still subject to periodic review and competition where and when appropriate.
                      2. Sole source provider
                        A sole source provider is one who is the only practical option for a good or service to be used by the University.
                        Examples of legitimate sole source vendors include:
                        a. Only a particular brand or "make" is compatible with existing equipment or inventory.
                        b. Only one supplier is capable of providing the required goods or service.
                        c. An emergency condition exists which makes soliciting three bids impractical.
                        d. Warranty provisions demand parts or interfacing items offered by a particular manufacturer.
                        e. A specific source is mandated by law, regulation, donor specification or terms of a grant. Use of a sole source provider must be specified with the purchase request along with a written justification.

                      ACCOUNT NUMBERS

                      The Business office is responsible for establishing account and department numbers. Department numbers represent the source of funds by department. Account numbers represent the type of revenue or expense to be transacted to each department. Each department is assigned an account/department number(s) in order to detail and control expenditure activity for their area(s) of responsibility. All Purchase Requisitions must carry the complete 15 digit account number to be charged in order that required approvals may be obtained prior to its receipt in the business office for proper encumbrance and payment once the procurement process is complete.


                      After good/services are received, submit a signed invoice to document approval for payment. If Business procedures are followed, Accounts Payable pays for the order within MHU University’s payment terms. Accounts Payable will question all bills that cannot be associated with an authorized purchase order. They also will question any expense reports that include the purchase of equipment, software, or other goods and services that would normally require a purchase order. Additional documentation may result in a delayed payment.

                      Checks are processed on Friday for pick-up. An email will be sent if you have requested to pick up the check. Due to the volume of transactions, off-cycle processing of checks will not be accommodated.


                        Budget managers need to review the encumbrances and actual expenses via the online reporting (Synoptix) at least on a monthly basis. Any corrections/questions should be addressed in a timely manner. This is a critical component to ensure that accounts are appropriately charged. Any changes in budget managers’ report access should be the appropriate leadership team member.