November 29, 2001
January 2015 – changed Office of the Chancellor/OOC to System Office/SO
MINNESOTA STATE COLLEGES AND UNIVERSITIES
SYSTEM OFFICE
SPONSORSHIPS PROCEDURE
PART 1. PURPOSE
The System Office has had a number of purchases that list the purchase as a sponsorship.
In some cases it is evident what was received (for example meals at a banquet or
reception). In other cases, the supporting documentation for the payment does not clearly
state what was received as a result of the sponsorship payment.
PART 2. RESPONSIBILITY
MnSCU Board Policies Chapter 5.14, Part 2 Responsibilities, states:
The state colleges, universities, and system office are responsible
for procurement of necessary goods and services and the
implementation of contracts that maximize the use of financial
resources at the system office and each institution.
PART 3. DEFINITIONS
Minnesota Statutes 16C.02 Definitions defines goods & services as follows:
“Goods” means all types of personal property including
commodities, materials, supplies, and equipment. “Services”
means, unless otherwise indicated, both professional or technical
services and service performed under a service contract.
PART 4. COMPLIANCE
In order to ensure compliance with MnSCU Board Policies Chapter 5.14, it is necessary
that we provide documentation regarding the goods and services that are being
purchased. In order to be processed, purchase requests will need to provide specific
information on the goods or service being purchased. Sponsorship is not sufficient
information to allow processing of the purchase request.
The value of goods or services received must be reasonable to the amount expended.
When the reasonableness of the value received is unclear, a “prudent person” rule shall
be applied. For example, a banquet fee of $75 may list $40 of the fee as tax deductible.
On its face, the transaction may imply that the value received is only $35. Assuming the
only option for attendance is a $75 payment (the $40 is not discretionary), then the
question is whether the $75 payment is reasonable. If attendance could be justified
because of the access gained to an important event and the opportunity to build key
relationships, then a “prudent person” would likely judge the $75 payment as reasonable.
1
Transactions that produce no value to MnSCU are not allowed, however, unless directed
by explicit legal authority.
Examples:
Purchase requests for advertising will need to provide information or a description of the
advertising. The amount of the payment (sponsorship) should be in relation to the
amount/value of the advertising received.
Purchase requests for booth space or other space will need to provide information or a
description of the space rental. The amount of the payment (sponsorship) should be in
relation to the amount/value of the space rental received.
Purchase requests for attending a banquet or reception may need to be processed as a
special expense or Chancellor’s Expense Allowance Account depending on the nature of
the function/attendees. A Request for Approval of Special Expenses should accompany
the request for purchase and will need to provide information regarding the amount to be
paid and the number of meals included. In addition, a list of attendees should be
provided. For any attendees that are not a MnSCU board member, student or employee, a
justification should be included as to the rationale for their attendance.
Purchase requests for items such as participation in a golf outing being held as a fund
raising activity for a student fund raising organization would need to provide
documentation of public purpose or student benefit, be viewed as a reasonable
expenditure by a prudent person, and need to be processed through the Chancellor’s
Expenses Allowance Account.
Divisions or units that anticipate requesting these types of expenses should submit the
request to the Business Office well in advance. Adequate lead time is necessary so a
determination can be made as to proper processing and, where necessary, approval can be
obtained from the Chancellor’s Office for any expenses to be charged to the Chancellor’s
Expense Allowance Account.
2