Handbook of Operating Procedures > Series 400 Budget, Finance and Operations > 4.6.5 Handling of Cash, Cash Equivalents and Petty Cash Funds

4.6.5 Handling of Cash, Cash Equivalents and Petty Cash Funds

A. Purpose

The purpose of this policy is to (1) establish guidelines related to the handling and processing of payments made to The University of Texas at Tyler (UT Tyler), including The University of Texas Health Science Center at Tyler (UT Health Science Center) and to define those areas on campus authorized to collect these payments, (2) set forth guidelines for the approval and establishment of petty cash funds and to provide guidance on the proper management of those funds, and (3) set forth guidelines for the approval and disbursement of cash equivalents used as awards or as payment to research study participants.

B. Persons Affected

This policy impacts all employees of UT Tyler who handle cash, cash equivalents or petty cash funds regardless of the source of funding.

C. Definitions

1. Appropriated Funds – Any funds appropriated to UT Tyler by the State Legislature including Education and General funds and Tobacco Settlement Funds.Gift card/gift certificate purchases are prohibited from Appropriated funds.
2. Cash – U.S. currency and coin
3. Cash equivalents – Money orders, travelers’ checks, cashiers’ checks, certified checks, credit/debit cards, gift cards, gift certificates and wire transfers.
4. Cash handling department – Campus operating unit authorized to collect UT Tyler funds; deposits all funds collected to the Cashier’s Office.
5. Cashier’s Office – campus operating unit from which collections are deposited directly to a UT Tyler or UT Health Science Center bank account.
6. Change fund – fund exclusively restricted for the use of providing change when processing authorized collections of cash in the department.It shall NOT be used for cash purchases, making loans to employees or students, or cashing checks.
7. Responsible Official - COO, CFO, or CBO – The Chief Operating Officer, Chief Fiscal Officer, or Chief Business Officer of UT Tyler or of UT Health Science Center.
8. Custodian – A responsible employee appointed by the responsible official, entrusted with the responsibility of safeguarding the assigned funds.For sponsored projects, the Principal Investigator is the Custodian and shall not delegate this role.
9. Gift Card – A stored-value or similar instrument issued in lieu of cash, check, or direct deposit.For the purposes of this policy, “gift card” includes gift certificates.
10. Petty Cash – funds maintained by a custodian for the purpose of obtaining miscellaneous items or paying for unanticipated operating expenses.
11. Research Study Subject – An individual about whom a Principal Investigator conducts research and obtains data through intervention or interaction with the individual.
12. UT Tyler Funds – includes cash, checks, cashiers’ checks, certified checks, money orders, travelers’ checks, credit/debit cards, gift cards and wire transfers.

D. Policy and Procedures

Ensure any cash handling and petty cash funds for UT Tyler is compliant by following the UTS 166 Policy.

1. Cash Handling Policy Statement. All payments to UT Tyler or UT Health Science Center should be made, ideally, at the respective campus’ Cashier’s Office.  However, if a department provides a documented reason as to why payments cannot appropriately be made at the Cashier’s Office, the responsible official may authorize the cash handling department and custodian to collect these payments on a temporary or permanent basis.  Note:  payments delivered inadvertently to a department should be taken to the Cashier’s Office within (1) one business days of receipt. 
2. Petty Cash Fund Policy Statement. If a department provides documented justification, the responsible official may permit the department to maintain a petty cash fund, as described in this policy.  Individual petty cash transactions may not exceed $100 and must be supported by a petty cash voucher and receipt.   
3. Petty Cash Prohibitions. Petty cash shall not be used for the following:
   1. Travel expense reimbursements
   2. Travel advances
   3. Payment for items that are to be purchased through the purchasing system according to the UT Tyler policy
   4. Payments to employees for services, awards, bonuses, etc. Payments to employees shall be paid through the payroll process
   5. Payments of a taxable or non-taxable benefit to an individual. These shall be processed through payroll
   6. Payments to university service centers
   7. Personal borrowing (IOUs)
4. Gift Card Policy Statement. 
   1. Allowable Uses
      1. As incentives for Research Study Subjects in subjects approved by established  Institution Review Board (IRB).
      2. UT Health Science Center grant funding use for participants, study subjects, etc.
      3. As prizes, recognition awards or tokens of appreciation for students. Such cash equivalent distribution to students or non-service provider participants may be reportable to the Internal Revenue Service (IRS).
      4. Where funded by UT Tyler, as prizes or awards to employees which are awarded by means of random drawing or distribution.  Such employee prizes or awards are taxable to the employee recipient.
   2. Prohibitions
      1. Predetermined prizes are considered compensation to employees and are not authorized to be paid by means of a gift card.
      2. Gift cards shall not be used as a bonus, honoraria, or other means of compensation to employees. Such payments must be processed through the payroll system.
   3. Limitation
      1. UT Tyler: Cash equivalent requests require approval in advance by a Responsible Official.
      2. UT Health Science Tyler: All gift card requests regardless of amount must be approved by responsible official.
   4. Tax Reporting
      1. Gift cards are taxable to the recipient and must be reported to the IRS.
      2. IRS regulations require reporting of non-employee awards or payments made by UT Tyler totaling $600 or more in a calendar year and reported on form 1099-MISC.
      3. Gifts to employees funded by UT Tyler regardless of source of funds must be taxed as ordinary income to the employee.  Gifts, rewards, and gestures of appreciation shall not be provided to employees as disguised compensation.  The value of gift cards will be included on in an employee’s annual taxable gross income and reported on the annual W-2 report.
5. Internal Control. The Custodian has the primary responsibility for custody and safekeeping, maintenance, required accounting and documentation, and proper usage of authorized cash and cash equivalents.
6. Cash Handling, Petty Cash Fund and Gift Card/Cash Equivalent Procedures. Detailed cash handling procedures, petty cash fund procedures, gift card or other cash equivalent procedures and related forms for each can be found on the institution’s website.  

E. Audit

All change funds, petty cash drawers and other cash on hand, are subject to periodic, unannounced cash counts by management and/or Internal Audit.  Additionally, the UT Tyler Institutional Audit Committee may request an operational audit of the area with the change drawer at any time.

F. Review

This policy shall be reviewed every five years or as legislation changes.