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Unauthorized Purchases

Summary: Review UC Policy and learn how to avoid making unauthorized purchases.

An unauthorized purchase is a purchase made outside of the Acceptable Methods for Buying Specific Goods and Services.

Examples of unauthorized purchases include:

• Employee purchases a new $250 printer for the office, writing a personal check for the purchase;
• Employee collaborates with a graphic designer to obtain a poster, then receives an invoice for graphic services and requests payment;
• Employee purchases a $1500 computer for new computer lab, using a personal credit card.

In the cases above, the employee made a purchase (committed funds) on behalf of the university without securing the appropriate approvals first. The purchased items may be appropriate for business use; however approvals for all university purchases need to be secured before the purchase is made.

Factors to consider with unauthorized purchases include the costs of processing invoices and checks, personnel time, and any travel involved to make such a purchase. Many times these costs offset savings in the purchase price.

Following one of the approved methods ensures that all approvals are properly documented and also ensures that the university receives the best price. In some cases, employees may not receive full reimbursement for a purchased item if it is determined that the university could have negotiated a better price.

See Financial Affairs Payment and Reimbursement Guides for details of reimbursements.

UC Policy

The amount of payment and conditions under which such payment must be made by an individual are discussed in Business and Finance Bulletin BUS-43, Part 3, Section VIII, "Unauthorized Purchases."

Business and Finance Bulletin BUS-43, Part 3, Section VIII Unauthorized Purchases

Responsibility - An individual who has not been delegated purchasing authority who makes an unauthorized purchase of goods or services shall be responsible for payment of the charges incurred. At the discretion of the Chancellor or Laboratory Director:

1. The unauthorized individual shall be required to pay either the full amount whenever the purchase is found to cover unneeded items or items whose purchase would not otherwise be authorized and the transaction cannot be canceled, or the amount of any cancellation charges incurred when cancellation can be arranged.
2. The unauthorized individual shall be required to pay only the difference between the charges such individual incurred and those the University would be reasonably expected to have incurred whenever the purchase is otherwise found to have been proper.

How to Avoid Unauthorized Purchases

Education is key. Let faculty and staff know what purchasing methods are available to them. Purchasing options to consider:

• Purchasing Card: The Pro-card can be used for many goods and for pre-approved service providers. See a list of restricted purchases.
• CruzBuy Purchase Order (PO): Purchase goods and services from UC contract suppliers and all other suppliers.
• Travel Card: Pay for UCSC business travel and conference fees and registration using the Travel Card.
• DIrect Payments: Use Direct Pay for copyrights, royalties, honoraria, medical services, petty cash disbursements, scholarships, or utilities.

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Last revised: October 10, 2008 (am)