Problematic Expense Guide - A to Z

• Wasteful Spending – The spending of University funds in a wasteful or careless manner is prohibited by State of New Mexico Law. 
  
  According to the Office of the New Mexico State Auditor, wasteful spending is extremely serious and is one of the leading causes of audit findings for New Mexico governmental entities like the University.  All University funds regardless of source are Public Funds belonging to the taxpayers of New Mexico and are legally required to be spent reasonably in the eyes of a prudent person. 

Wasteful spending exists in several forms, including Luxury Spending, NM Anti-Donation Law Violations and Careless Spending: 

• • LUXURY SPENDING - Payment or reimbursement for lavish, extravagant or luxury expenses where more reasonable options are available that meet our needs.  Examples of Unallowable Luxury Spending:
    
    
    • Gourmet or High-end dining at a cost per person that is not consistent with UNM Policy.
    • $300 headphones for online business meetings
    • $6,000 sofas
    • Luxury Travel, such as higher than economy airline tickets when economy seats are available, high-end or resort lodging when more reasonable options are available, luxury automobile rentals when not necessary to conduct University business.
      
      
  • NEW MEXICO ANTI-DONATION LAW VIOLATIONS - Spending University funds in a manner that provides little or no direct benefit to the University, but may instead directly benefit employees, other individuals or other organizations.  Examples of New Mexico Anti-Donation Law Violations:
    
    
    • Donations/Contributions – To Political, Religious or Charitable organizations, or any other organization or individual
    • Gifts – Congratulatory, Farewell, Sympathy, Bereavement, Thank you
    • Parties – Holiday Parties, Birthday Parties, Graduation Parties for Employees or Student Employees, Meals and Refreshments for social purposes, Celebrations that do not qualify as University business under UNM Policy
    • Food/refreshments for employee break rooms
    • Food/refreshments at events where no University business is conducted
    • Personal Entertainment Expenses for Employees – Sporting Events, Concerts & Performing Arts, Museums, Movies, Pickleball venues, Electronic game venues, Bowling, Golf Games, Museums
    • Massages for Employees
    • Identification Items – Driver’s Licenses, Passports, Identification Cards
    • Home Office Expenses – Furnishings, Utility Charges, Rent/Mortgage payments
    • Expenses for Employee Family Members and Friends
    • Fines and Penalties - Incurred by an employee in violation of public policy
    • Funeral/Memorial Expenses – Payments to host or attend
    • Supplies, Repairs, Maintenance & Services for Equipment/Property Not Owned by the University
    • Tuition and Related Costs (except as otherwise allowed under UNM Policy)
    • Stolen Personal Items, Replacement of
    • Conferences and Training Not related to an Employee's Job Duties
    • Vehicle Expenses for Privately Owned Vehicles
    • Unpaid Fiscal Agent Arrangements – Use of UNM Accounting systems and/or personnel
      
      
  • CARELESS SPENDING - Examples:
     
    • Unnecessary expenses where University funds are used to purchase goods or services that are not needed, or not used.
    • Payment for services that unnecessarily duplicate existing services
      • Ex - Payment or reimbursement for insurance coverage that duplicates existing University-wide insurance coverage
      • Ex - Payment or reimbursement for a website when free websites that meet our needs are available through UNM Information Technologies
    • Excessive Meal Tips (ex 35 - 40%)
    • Payment or reimbursement of Unallowable Expenses that are De minimis or Immaterial
    • Payment of New Mexico Gross Receipts Tax on the purchase of Goods

• • The Reason this is Unallowable – Wasteful spending of Public (Taxpayer) Funds is a violation of State law, and often results in major scandals and reputational damage to New Mexico Governmental entities through negative media coverage.  Such unwanted, negative media attention usually results in Special Audits by the Office of the New Mexico State Auditor, and, at times, the Office of the New Mexico Attorney General and the UNM Internal Audit department.  Consequently, wasteful spending is also one of the most common audit findings found in audits of New Mexico Governmental entities like the University.  Under State law, all University expenses must be reasonable in the eyes of a prudent person to be allowable.  While this doesn’t mean we are required to purchase poor quality goods and services, we are, however, prohibited from purchasing unnecessarily luxurious or extravagant goods and services, or receiving little or no benefit from the taxpayer funds we spend.  Spending University funds in a wasteful manner will result in audit findings.  Under New Mexico State Auditor statutes, waste is defined as “…the act of using or expending resources carelessly, extravagantly, or to no purpose."(NMAC 2.2.2.7(W). 
    
    
  • Allowable Exceptions:
    • Luxury travel may be allowed when no other economical options are available (must be documented in the Business Purpose of the transaction) – ex. only high-end airline seats, hotel rooms were available, at the time of booking, etc.
      
      
  • Possible Allowable Alternatives - Try this Instead:
    • If a unit has funds available at the UNM Foundation, the Foundation may be able to pay for these expenses directly. With the UNM Foundation existing as a legally separate Non-Profit entity and not a governmental entity like the University, New Mexico government spending restrictions do not apply to funds that are disbursed directly by the Foundation.