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Authorization and Procedure
The UNC Charlotte Purchasing Department is designated process and permit owner for all tax-free industrial alcohol purchased by the University. The procurement and use of tax-free ethyl alcohol is authorized by special permit granted to the University by the U.S. Treasury Alcohol and Tobacco Tax and Trade Bureau. This procedure outlines the process and responsibilities for tax-free alcohol usage, procurement, receiving, storage, record keeping, ATF requirements and audit readiness of tax-free alcohol.
Authorized Usage
- General reagent work in chemical laboratories ethyl alcohol cannot be used for any purpose other than that listed on the permit. The use of tax-free alcohol is controlled as follows:
- Tax-free alcohol must never be sold;
- Tax-free alcohol must be used on the premises named in the permit;
- Tax-free alcohol must never be used in the manufacture of food flavors, flavoring extract, food products, or beverages;
- Tax-free alcohol cannot be loaned to another person or institution, even if such person or institution is also authorized to use tax-free alcohol;
- Tax-free alcohol cannot be sold or issued to doctors for use in private practice, even if these services are performed in the hospital.
- Research laboratories authorized to use tax-free alcohol in pure research must discontinue using tax-free alcohol when the research program is completed or discontinued.
- Tax-free alcohol must not be used as a cleaning agent in repair work or machine shops.
Purchasing
Ethyl alcohol orders are processed only through the UNC Charlotte Purchasing Department. Authorized end-user departments will complete the Banner on-line system requisition for all alcohol orders. A minimum two weeks must be factored as lead-time for alcohol delivery after completing the requisition. It is the end-user department’s responsibility to insure adequate but measured and controlled amounts of alcohol supply is on-hand for between orders use.The Purchasing Department will complete the purchase order and forward a photocopy of its permit with the purchase order listing the authorized end user department.Receiving
When tax-free alcohol is received, it shall be placed in the storage facilities and kept there under lock until withdrawn for use. The using department may not remove tax-free alcohol from the original packages or containers in which received until the alcohol is withdrawn for use. If the tax-free alcohol is transferred to “safety” containers in accordance with fire code regulations, the containers to which they are transferred shall be appropriately marked to identify the package from which transferred, the quantity transferred, the date of transfer, and the name and address of the vendor. Any losses in transit or damage must be noted and the permittee must note any loss or deficiency in the shipment on the record of receipt. The original vendor packing slip must immediately be sent to purchasing to file with the hard copy of purchase order.
Storage
Biology and Chemistry Department must store alcohol to prevent unauthorized access and be equipped for locking and locked when unattended. A storage cabinet or locker kept inside a room which is locked when unattended is considered to be adequately secured. Storage facility must be of sufficient capacity to hold the maximum quantity of tax-free alcohol which will be on hand at one time. Stationary storage tanks used to hold tax-free alcohol shall be equipped for locking in such a manner as to control access to the spirits. All stationary storage tanks shall be equipped with an accurate means of measuring the spirits.
Record Keeping
The Purchasing Department will maintain a separate filing system to accurately account for the receipt of all tax-free alcohol. At a minimum these records will consist of the alcohol purchase orders, vendor packing slips signed by the receiving departments authorized end user. Records of receipt shall have only the quantity of tax-free alcohol actually received. Losses in transit shall not be considered as received, but may be the subject of a claim for allowances of losses.
End using departments handling alcohol shall keep accurate records of all receipts, shipments, usage, destructions and claims pertaining to the withdrawal and use of tax-free alcohol. These records shall be in sufficient detail to enable the permittee to reconcile any losses or gains for the semi-annual inventory. All records required shall identify tax-free alcohol by proof, date of transaction, and quantity involved and. Records shall be kept current at all times.
For the purpose of this subpart, tax-free or recovered alcohol shall be considered as “used” when permanently removed from a supply storeroom, compartment, or tank for any authorized use. Records of usage shall identify the tax-free alcohol by quantity, proof, and purpose of removal (office, department or location to which dispensed). This record shall list separately, the usage of tax-free alcohol from recovered alcohol or alcohol received.
Audits
All alcohol releases are checked by Federal auditors for strict compliance with the permit as well as for quantities used. The Director of Purchasing will secure and maintain the alcohol permit. The alcohol permit will be kept posted and available for inspection on the permit premises. Auditors may also check the supplies of the using department. End-user department must maintain complete and accurate records of all alcohol usage and up to date documented evidence of compliance upon request from auditor.
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