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SECTION 75: Disbursement Voucher (DV)

Last updated: February 2021
  1. Policies and Requirements
    1. DV Purpose
    2. DV Preparation
    3. DV Restrictions
    4. DV Routing
  2. Vendor
  3. DV Payments Report
  4. Special Handling
  5. Nonresident Alien Payees
  6. Exhibits/Forms

I. Policies and Requirements

  1. DV Purpose
    1. The Disbursement Voucher is to be used to pay for goods and non-payroll services when a requisition and purchase order are not required because of the nature of the payment. Use of the DV does not replace the normal purchasing procedure and therefore cannot be used in situations which require a requisition and purchase order. Use of the MSU Purchasing Card is recommended where permitted by MSU Policy and accepted by suppliers.
    2. Examples of permissible DV payments include:
      1. See MSU Procurement for proper procedures on obtaining goods and services. Payments for supplies totaling $2,500 or less where the MSU Purchasing Card cannot be used and items are not available through University Stores.
      2. Honoraria, speaker fees, and performer payments. See MBP Section 71 for additional information.
      3. Royalties and copyright fees.
      4. Conference and webinar registration fees only when the MSU Travel Card or Purchasing Card are not accepted. The DV must detail the attendee, date, and location of the conference.
      5. Payment of conference costs (facility, food service, etc.) where the University is the conference sponsor.
      6. Payment to a supplier for food purchased off campus while not in travel status consistent with the provisions of MBP Section 45.
      7. Memberships in professional organizations and associations when the MSU Purchasing Card is not accepted. Memberships must be in accordance with University policies outlined in MBP Section 47.
      8. Refunds. (NOTE: Refunds of $2.00 or less will not be issued.)
      9. Utility payments for University installations.
      10. Repairs totaling $2,500 or less to machinery and equipment not under a purchase order contract.
      11. Payment of off-campus lodging expenses for University guests.
      12. Advertising - Payments for newspaper ads, magazine ads, billboards, etc.
      13. Training seminars provided either on campus or off campus unless the training was included as a part of the negotiated purchase of equipment or software, etc.
      14. Prepayment for goods or services should generally be avoided. In unusual circumstances, prepayments should be clearly noted in the Explanation field with the reason for prepayment.
      15. Reimbursement to individuals who use their own funds for legitimate University business purposes.
        1. Reimbursement is limited to materials or services paid directly by the individual and must conform to MSU procurement policy.
        2. Reimbursements must be submitted within 90 days of the transaction/purchase date.
      16. Reimbursement of a petty cash advance fund.
      17. Payments to independent contractors or other IRS Form 1099 reportable payments (such as rents and royalties) should be made directly to the contractor/vendor via a DV or through a purchase order, not via a reimbursement.

      Under no circumstances are purchases made by individuals to be delivered to or through the University's Receiving Department. Purchases delivered in this manner (without a purchase order number) are not readily identifiable and cause severe delivery problems.

      Proof of receipt of goods (e.g. packing slip) is required (as part of the DV’s scanned attachments). If no receiving documentation is available, departmental approval of the DV certifies receipt of the goods.

  2. DV Preparation

    DVs are input by the initiating department using the KFS Financial System. Required fields are noted with an asterisk*. Refer to Exhibit 75–A for a list of Payment Reasons.

    Only one person or company can be paid on a single DV.

    The business purpose for payment must be indicated in the Explanation field and should include dates, where applicable, such as in the case of performers or memberships.

    A check (with stub) is the only document the vendor will receive. The DV includes a large Check Stub Text section in the Payment Information tab. Text included in this section will appear on the check stub and will be crucial information for the vendor to use to credit your payment. Use this section to include invoice number, account number, customer number, or other descriptive text to ensure that your payment will be properly credited by the vendor. Do not include the business purpose in the Check Stub Text field. In almost all cases, the Check Stub Text information will be sufficient. When vendor ACH payments are made, the Check Stub Text field is sent to the vendor. In very rare situations, a document may need to be sent with payment and this will require Special Handling (see item V).

    The Wire Transfer tab must be completed when payment is requested via a wire. Required fields are noted with an asterisk on the Wire Transfer tab. Banking information for an individual needs to be attached to the vendor record in KFS. Banking information for an entity/company must be attached to the DV, or to the vendor record in KFS. Banking information may be supplied using the Wire Transfer Form, email, invoice, or other method.

    Michigan sales and use tax should not be included in the total vendor payment as MSU is exempt. Exceptions are:

    1. When proceeds have been collected from participants or a taxable agency account is being used (non-MSU funds), in which case sales and use tax should be included.
    2. When processing a reimbursement where the individual already paid the sales or use tax.

    Supporting documentation, including itemized, paid receipts, invoices, or contracts explaining the reason for the payment, must be attached to the DV with a note in the Notes and Attachments tab. Departments must retain original invoices and receipts on file until the DV has posted to the general ledger.

    Reimbursement DVs that contain multiple receipts and business purposes should have a completed Reimbursement Worksheet (refer to Exhibit 75–B) attached to the DV. The worksheet provides a mechanism to list multiple business purposes, as well as facilitates a total reimbursement amount.

  3. DV Restrictions

    Disbursement Vouchers cannot be used to pay compensation or honoraria unless the payee meets the criteria of an independent contractor (see Section 76).

    Disbursement Vouchers cannot be used to pay enrolled students or employees for services of any kind. Payment must be processed through HR/Payroll.

    Disbursement Vouchers cannot be used to award scholarships or grants to currently enrolled students. These payments must be channeled through the scholarship authorization process in the Office of Financial Aid.

    Additional prohibited payments include:

    1. Infrastructure Planning and Facilities supplies including paint, plumbing, electrical, heating, ventilation and air conditioning or other building supplies where federal, state, local or University building codes apply.
    2. Purchase of hazardous materials including cleaning solvents, controlled substances, radioactive materials, weapons and ammunition.
    3. Recurring payments, such as equipment rentals or leases and standing open orders.
    4. Software not in compliance with UPL-IT Procurement policy, computers (desktop, laptop, tablet, etc.), printers and copiers
    5. Maintenance and repairs to machinery and equipment under a Purchase Order contract.
    6. Purchase of uncrewed aerial vehicles (UAVs) and uncrewed submersible vehicles (USVs), commonly referred to as “drones”. This includes both complete systems, and system components.

    Questions concerning the propriety of using a Disbursement Voucher should be addressed to the Accounting Office, Hannah Administration Building, 426 Auditorium Road Rm 360, telephone 355-5000, email

  4. DV Routing

    For all reimbursement related e-docs (including DV’s), if the Fiscal Officer (FO) is the payee or the custodian/recipient of a Cash Advance, the e-doc must be ad hoc routed and/or approved by a FO delegate, or an equivalent separately reporting position. Lack of the required ad hoc routing will result in Accounting's disapproval of the e-doc.

    For reimbursements to employees, if the employee is not the DV initiator, the DV must be ad hoc routed to the employee for approval/verification of expenses incurred. Lack of the required ad hoc routing will result in Accounting's disapproval of the e-doc. Students, on-call, temporary, and faculty no-pay employees should not have ad hoc approvals added to the DV.

    A DV charged to a research grant account (RC sub-fund) will automatically route to the Office of Contract and Grant Administration for approval.

    A Disbursement Voucher of $25,000 or more will automatically be routed for College/MAU level approval.

    After audit, Accounting will approve the DV for payment, or disapprove and provide an explanation. If disapproved, notification will be routed to the Action List of the initiator and all approvers.

    Checks are mailed directly to the payee, or, if reimbursing an employee who receives payroll via direct deposit, funds will be direct deposited. Vendors may also receive payment through one of several methods of electronic transfer (ACH, credit card, wire).

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II. Vendor

Vendors have to be pre-established and approved before a Disbursement Voucher can be initiated.

There are three types of vendors, plus employees, in the financial system.

  1. Special Payment (SP) Vendors
    • Used for research participant payments ($150 or less) or non-employee reimbursements.
      • Cumulative payments to any one participant of $600 or more during the calendar year require collection of the name, address, and social security number for tax reporting purposes and must be forwarded to Accounting (Administration Bldg, 426 Auditorium Rd, Rm 360) by December 31st.
    • Does not require a Tax ID.
    • Requires a remit address.
  2. Disbursement Voucher (DV) Vendors
    • Used for the purchase of goods or services.
    • Requires a Tax ID.
    • Requires a remit address.
    • W-9 is required for business entities.
  3. Purchase Order (PO) Vendors
    • Can be used on a DV. Can only be created by Purchasing.
  4. Employees
    • All employees are automatically entered via a feed from HR. No changes may be made to employees via the financial system.

Vendor additions: At the Main Menu screen under “Lookup and Maintenance”, select Vendor to go to the Vendor Lookup screen. Look up the Vendor to see if it is in the financial system. If yes, you may proceed to the DV and initiate payment to the vendor. If no, select create new in the upper right corner of the Vendor Lookup screen and complete the Vendor e-doc. The vendor’s W-9 must be scanned and attached in the Notes and Attachments section for all vendors except for sole proprietors/individuals.

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III. DV Payments Report

The BI report named “Voucher Payments by Payee” is available for users to run in order to ascertain DV payments to a particular payee. The report contains prompts to allow the user to filter for the data needed.

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IV. Special Handling

Special handling situations include checks or wires requiring expedited handling, routing checks to an address other than the payee’s, or including documents to accompany the mailed check.

Requests for expedited handling will be accommodated and processed on the next regularly scheduled check printing day. Checks are currently printed on Tuesday’s and Thursday’s. Requests received by Accounting by 10am on a check printing day will be processed that day. All others will be processed on the next check printing day. A request is deemed to be received by Accounting when a fully approved (including Contracts & Grants when applicable) DV is available for Accounting approval .

For all special handling situations, departments are assessed a processing fee of $15 per DV. The following steps must be completed:

  1. Check the Special Handling box and complete the Special Handling section of the DV.
  2. If other documents must be included with the check, scan and attach those documents to the DV and make a prominent notation in the Notes and Attachments tab (e.g. "PLEASE INCLUDE ATTACHED DOCUMENTS WITH CHECK WHEN MAILING" ) to properly identify those documents. The expectation is that the need for this type of special handling will be very rare. Use the Check Stub Text section of the DV to include invoice number, account number, customer number, etc. to ensure that your payment will be properly credited by the vendor.

When Special Handling is added to a DV, notification will be automatically sent to the Accounting Office after Fiscal Officer(s) approval of the DV.

If you require special handling on a direct deposit payment (employee reimbursement), do not check the Special Handling box. Instead, follow these steps:

  1. Add a note to the e-doc indicating your special handling request (RUSH DIRECT DEPOSIT) and an account to be charged the $15 fee.
  2. Send an email to with the exact same information requested in #1. In the subject line of the email, please indicate your e-doc number and the special handing reason.
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V. Nonresident Alien Payees

Payments to nonresident alien payees of compensation, rents, royalties, prizes, awards, scholarships or fellowships for non-enrolled students, allowances, and reimbursement of undocumented travel expenses are subject to special Internal Revenue Service rules. See Section 77 concerning payments to nonresident aliens.

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VI. Exhibits/Forms

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