Problematic Expense Guide - A to Z
- Reimbursement for Services Paid to Vendors/Contractors – The reimbursement for services paid out-of-pocket to a vendor or contractor is a prohibited use of University funds.
- The Reason this is Unallowable – The UNM Purchasing department allows employees to be reimbursed for purchases of goods up to $1,000, but not services. The reimbursement of services is not authorized due to more stringent compliance requirements and other conditions than on the purchase of goods. With services, for example, there are additional tax considerations such as IRS Employee vs Contractor determination and required tax reporting on IRS forms 1099-NEC, 1099-MISC or 1042-S. The purchase of services is also generally more complicated than the purchase of goods from a contract standpoint, as there can be contract provisions and/or conflict of interest issues which preclude the University from doing business with a vendor. An employee who purchases services out-of-pocket from a vendor or contractor runs the risk of not being reimbursed due to an unallowable/unlawful cost or transaction.
- Possible Allowable Alternatives - Try this Instead:
- Please follow standard UNM Procurement rules for purchases of services. Services from vendors or contractors should only be procured through requisition/Purchase Order or P-Card. The University does not have a standard process to reimburse employees for the purchase of services. Please contact the UNM Purchasing department with questions.
- The Reason this is Unallowable – The UNM Purchasing department allows employees to be reimbursed for purchases of goods up to $1,000, but not services. The reimbursement of services is not authorized due to more stringent compliance requirements and other conditions than on the purchase of goods. With services, for example, there are additional tax considerations such as IRS Employee vs Contractor determination and required tax reporting on IRS forms 1099-NEC, 1099-MISC or 1042-S. The purchase of services is also generally more complicated than the purchase of goods from a contract standpoint, as there can be contract provisions and/or conflict of interest issues which preclude the University from doing business with a vendor. An employee who purchases services out-of-pocket from a vendor or contractor runs the risk of not being reimbursed due to an unallowable/unlawful cost or transaction.
