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Business and Financial Policies and Procedures

Definitions

Accounts Payable
Accounts payable is the amount owed for the purchase of goods or services at a specific date. University Payables (UPAY) is the OBFS unit responsible for paying these obligations.

ACH (Commonly Called Direct Deposit)
See Electronic Funds Transfer.

Award
A payment recognizing achievement with no restrictions.

Banner Vendor Number
Banner assigned number given to an individual or company used in Banner transactions.

Business Purpose
Explains how the expense was a legitimate business activity related to the mission of the University. Answers the question "why was the expense incurred and how did that benefit the University?"

Cash Equivalents
Cash equivalents include gift cards, gift codes and certificates (e-codes), checks, or other mechanism that has a cash value.

Close a Program Advance
A reconciliation event where the Custodian accounts for funds used when all funds have been used or returned to USFSCO; the funds do not need to be replenished and the program has ended.

Conferences
Conferences include seminars, workshops, or training for professional development purposes.

Custodian of a Program Advance (Custodian)
A Principal Investigator or designee responsible for the program. All employee groups are eligible to be custodians except undergraduate students, unpaid graduate students, hourly graduate students, extra help, and academic hourly. 

Disbursements
A payment which removes the accounting liability.

E-Invoice
Invoices electronically transmitted directly to University systems from the vendor.

Educational Assistance to Students
Educational payments to students include scholarships, grants, fellowships, traineeships, stipends, allowances, and assistantships. For additional information, consult:

Electronic Funds Transfer
An electronic payment message containing some amount of money, sent to a financial institution instructing it to make a deposit entry to one of its depositor's accounts. Common types of electronic funds transfers are: wire transfers and ACH (commonly called Direct Deposit).

Employees
For reimbursements and payments, individuals with paid positions at the University, including full time, part-time, hourly, students (including graduate assistants), and others.

Encumbrances
An encumbrance reserves funds for a specific future payment (expenditure). The payment is a legal obligation.

Expense Report (ER)
An expense report submitted in the University of Illinois System’s Travel and Expense Management system.

Foreign Draft
Foreign drafts are checks ordered from a bank to pay a payee in a foreign currency or in U.S. Dollars at a foreign location. For additional information, consult Request Payment by Foreign Draft.

Guests
Visitors from outside entities (such as visiting dignitaries, donors, and recruits) and students of the University of Illinois and other universities. Students who are also employees of the University are not considered guests at events that they attend in their roles as employees.

Half-day Event
An event that lasts at least three business hours.

Honorarium
An honorarium is a one-time payment made to an individual who is not an employee of the University, for a special and non-recurring activity or event for which a fee is not legally or traditionally required. The intent is to show appreciation for participation in University educational, research, or public service activities or events.

Human Subject
A living individual about whom an investigator obtains data through intervention or interaction with the individual, or, about whom an investigator obtains individually identifiable, confidential information.

Invoice
An invoice is a document issued by a seller to a buyer. In order to process, it must indicate the product, quantities, and agreed prices for the goods or services the seller has provided.

IRB
Institutional Review Board

IRS
U.S. Internal Revenue Service

IRS Accountable Plan Rules
The University is subject to the IRS Accountable Plan Rules which define the circumstances under which reimbursements are considered non-taxable income. These are:

  • The expense must have served a business purpose.
  • The employee has submitted receipts substantiating the date, time, place, and amount within a reasonable amount of time (defined as 60 days).
  • The employee returns excess advances or reimbursements within a reasonable amount of time (defined as 120 days).

ITIN
Individual’s Taxpayer Identification Number

Nonresident Alien
A nonresident alien is an individual who is not a U.S. citizen or a resident alien (see Resident Alien definition below). A resident of a foreign country under the residence article of an income tax treaty is a nonresident alien individual for purposes of withholding. See IRS Publication 515 and 18.2 Foreign Nationals for additional information.

Official Meetings
Official meetings include symposia, seminars, or consortia sponsored by educational institutions or organizations with which the University is associated.

One-time Advance
Used to fund a program that is not more than 30 days in duration.

Partial Close of a Program Advance
A reconciliation event where the Custodian accounts for funds used when all funds have not been used; the funds do not need to be replenished and the program is still active.

Presumption Rules
IRS rules used when the University of Illinois System cannot reliably associate a payment with valid documentation for tax reporting and withholding purposes. See IRS Publication 515 and 18.2 Foreign Nationals for additional information.

Prize
A payment for contests or competitions with no restrictions on how the winner uses the prize.

Professional and Artistic (P&A) Services
Professional and artistic services are primarily intellectual or creative in nature and qualified by education, experience, or technical ability.

Reception
An event that follows a seminar, lecture, or investiture ceremony, to which employees and guests are invited

Reconciliation
A reconciliation of a program advance tracks the disbursements of funds for accountability and tax reporting purposes.  A reconciliation occurs when a program advance is either (i) replenished; (ii) verified that no funds have been used; (iii) partially closed; or, (iv) closed.

Refreshments
Coffee, tea, bottled water, other non-alcoholic beverages, and light fare such as crackers, cheese, and cookies.

Reimbursement
Compensation to an individual or company who has incurred an expense on behalf of the University.

Replenishment of a Program Advance
A reconciliation event where the Custodian accounts for funds used, and requests funds for additional payments under the same program while the program is still active.

Resident Alien
A resident alien has a permanent residency card, or meets the substantial presence test. See IRS Publication 519 and 18.2 Foreign Nationals for additional information

Revolving Advance
Used to fund a program that is longer than 30 days in duration.

SSN
Social Security Number

Student Activities
Meals and/or refreshments provided for events for students such as student orientation receptions, field trips, summer programs, or lunch series with speakers.

Taxpayer Identification Number (TIN)
A Taxpayer Identification Number (TIN) is an identification number used by the Internal Revenue Service (IRS) to administer tax laws. TINs include SSNs and ITINs and are issued either by the Social Security Administration (SSA) or by the IRS.

Travel and Expense Management (TEM)
Travel and Expense Management system used for requesting and reconciling program advances.

UPAY
University Payables

UPB
University Payroll & Benefits

USFSCO
University Student Financial Services and Cashiering Operations

Verification of Non-Use of Funds
A reconciliation event where the Custodian verifies that funds have not been used, the funds do not need to be replenished and the program is still active.

Wire Transfer
See Electronic Funds Transfer.

Last Updated: November 15, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: September 2012

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