SOP-PURCH-11: Out of Pocket Reimbursements

Number: SOP-PURCH-11

Subject: Out of Pocket Reimbursements

Summary: Compliance requirements of non-travel out of pocket reimbursements.

Source: University Procurement Services

Date of Issue: 07/01/2019

Date of Revision: 11/12/2025

Procedure

Employee, student, and supplier purchases made with personal funds may be reimbursable if they meet the business connection and substantiation requirements stated in policy FIN-ACC-620, IU’s Accountable Plan, and the compliance requirements defined in the “Rationale” section of this Procedure.

The type of individual receiving the reimbursement determines what system is used to process the reimbursement request.

Employees

System used: Emburse Enterprise

Non-travel reimbursements are requested using the Out-of-Pocket Reimbursement Report. Faculty and staff may submit their own expense reports, or a delegate may submit the report on their behalf.

Visit the Out-of-Pocket Reimbursement Documentation Library to learn how to submit this report in Emburse.

Students

System used: The Student Information System (SIS) or Emburse Enterprise, depending on whether the purchase was an academic or business expense.

Always consult the Student Payment Guidelines when issuing payment to a student.

Academic expense reimbursements are requested via SIS and are not subject to the timelines and tax impacts defined in IU’s Accountable Plan policy. Students do not have access to SIS. Reimbursements must be requested by the department on behalf of the student.

Contact the Office of Student Financial Assistance (OSFA) by emailing deptsch@iu.edu if you have questions related to determining if reimbursement is an academic expense or need help entering a reimbursement in SIS.

Non-travel business expenses are reimbursed via Emburse Enterprise using the Out-of-Pocket Reimbursement report. Students that are not employed by IU do not have access to Emburse and cannot submit their own expense reports. Department staff must request super delegate access and submit the report on behalf of the student.

Visit the Out-of-Pocket Reimbursement Documentation Library to learn how to submit this report in Emburse.

Suppliers

System used: BUY.IU

Supplier non-travel out of pocket purchases are rare and reimbursed in BUY.IU using the Reimbursement for Supplier Out of Pocket Expense check request form. Check requests submitted 61 or more days after the purchase are tax reportable. The supplier must have a registration type of Individual Profile, Profile 1 – Full – US, or Profile 2 – Full – Foreign to be reimbursed.

Visit the Out-of-Pocket Reimbursement Documentation Library to learn how to submit this BUY.IU check request form.

Reimbursement of unallowable items

In rare, extenuating circumstances, it may be necessary to purchase an unallowable item with personal funds. Reimbursement of unallowable items must be approved by the Purchasing Category Manager for that type of good. Reimbursement requests denied by the Purchasing Category Manager cannot be reimbursed.

The expense owner is responsible for completing the following steps to request Purchasing’s approval prior to submitting the reimbursement request:

1. Submit a Support Form using the “Out of Pocket Reimbursements” and “Allowability (Out of Pocket Reimbursements)” options. Describe why the purchase was an emergency and had to be purchased with personal funds instead of using an IU procurement method.
2. Attach the Purchasing Category Manager’s approval to the Out of Pocket Reimbursement report in Emburse in addition to the required substantiation documentation. Submit the reimbursement for review by the document approver.

Capital assets

Capital assets are listed in SOP-CARD-04: Restricted Items and cannot be reimbursed. In the unlikely circumstance that a capital asset must be purchased with personal funds, follow the steps outlined above in the “Reimbursement of unallowable items” section of this Procedure. If/after the reimbursement is issued, the purchase must be capitalized in the Kuali Financial System (KFS) using a General Accounting Adjustment (GEC) document. Review the KFS GEC Create an Asset video for guidance on this process.

Definitions

Academic expense:

The purchase was made to support a student’s own education. The student and their education are the primary beneficiaries of the purchase. The purchase did not provide a business-related benefit to IU.

Business expense:

The purchase was made to conduct business which supported IU’s mission of teaching, research, and/or public service.

Capital asset:

Item with a value of $5,000 or more.

Emergency situation:

A rare, unpredictable event which does not allow the purchaser to follow IU’s purchasing hierarchy described in SOP-PURCH-38: Ways to Make a Purchase due to time constraints.

Expense owner:

The individual requesting reimbursement and receiving the funds. The person who purchased the item being reimbursed.

Reimbursement:

Repaying an individual for a purchase they made using personal funds.