Intent and objectives
To ensure that University funds are expensed appropriately and that the authorisation of expenses is consistent across the University.
To ensure that the authorisation, accounting treatment and overall responsibility for the authorisation of expenditure complies with RMIT University’s legislation, Australian Accounting Standards and other relevant State and Federal legislation.
This policy is applicable to all types of expenses.
Expenses are the gross outflow of economic benefits during the period arising in the course of ordinary activities when those outflows result in decreases in equity.
For RMIT University, possible types of expenses are:
a. Recurrent and non-recurrent expenses related to the day to day activities of staff and students.
b. Personal expenses incurred by staff in the course of employment.
c. Personal expenses incurred by students in the course of their study which are deemed suitable for reimbursement.
1. Authorisation of expenditure
1.1 The University will ensure that all expenses it incurs are based on contracts with suppliers (external public and private sector organisations and individuals).
1.2 Contracts must be signed on behalf of RMIT University only by persons who are fully aware of the University’s obligations attached to the expenses incurred and in accordance with the Delegations Policy and schedules.
1.3 Personal expenses are not reimbursed by the University, unless incurred for business purposes and authorised by the relevant authority. The process for the reimbursement of personal expenses and recording of general expenses occurs as per the Expenditure and Accounts Payable Procedure.
2. Recognition and measurement
2.1 Expenses are recognised when a decrease in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably.
2.2 RMIT University is required to use the accrual accounting method, which means that expenses are recognised when incurred, except where a contract or the nature of government funding does not permit recognition of expenses in any other period other than that in which it was spent as cash by the University. Expenses are linked to revenue recognition.
2.3 The basis of recognition and measurement of revenue from business activities is listed in the Revenue Recognition Procedure.
2.4 Expenses for a business activity are recognised in the same period the revenue is recorded for that business activity. (See Revenue Recognition Policy and Revenue Recognition Procedure).
2.5 All effort must be made to ensure that unnecessary expenses are not incurred and that all expenditures are properly recorded.
3. Overall responsibility
3.1 The Executive Director Financial Services is responsible for the recognition and classification of expenditure.[Next: Supporting documents and information ]