A cost may be considered reasonable if the nature of the goods or services acquired, and the amount involved therefore, reflect the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made. An expense is considered reasonable if it is not extreme or excessive and reflects a fair and prudent decision and action to incur the expense. Reasonable means that the amount being spent reflects the value that normally would be spent in that specific situation. A necessary expense is a minimum purchase or service required to achieve a valid business objective. The primary beneficiary of a necessary business expense is the University, not the individual. Appropriate in that the expense is suitable and fitting in the context of the valid business purpose.Īn expense is necessary if there is a valid business purpose required to fulfill the mission of the University.Reasonable in that the expense is not extreme or excessive, and reflects a prudent decision to incur the expense and.Necessary to perform a valid business purpose fulfilling the mission of the University and.In order to be paid directly by the University or reimbursed to an individual, a business expense must be: Criteria for Determining a Permissible Expense All faculty and employees of the University are expected to exercise due diligence when generating, reviewing, and approving Transactions that commit to the expenditure of University Funds. As such, individuals using University resources for business, travel expenses, and/or purchasing items to be owned by NYU share the responsibility of ensuring that these resources are used appropriately, support the University mission, and comply with University policies, applicable laws and regulations, and donor restrictions. NYU employees and faculty are expected to employ sound expense management practices and exercise prudent financial management in their stewardship of University resources.
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