A. SUMMARY OF ADMINISTRATIVE PROCEDURE
This procedure pertains to all advances made by check or cash for travel or other business expense; the procedure establishes maximum advance amounts and requires timely accounting by employees. Unreturned advances will be subject to collection through payroll withholding if necessary for collection.
1. Internal Revenue Service Regulations (Sec. 1.62-2) requires that cash advances and expense reimbursements must be reported as income on an employee's Form W-2 subject to income tax withholding UNLESS paid under an "Accountable Plan." An Accountable Plan is one that satisfies three requirements:
a. Has a business connection - Advances must be limited to reasonable job-related expenses expected to be incurred by the employee, and the expense type may be allowable as a tax deduction.
b. Substantiated - The employee must supply the employer with detailed expense records as would be required if he/she had to substantiate a business expense deduction on his/her own personal tax return. In the case of business meals, date, place, amount, applicable receipts, names of persons accompanying employee, and business purpose must be documented.
c. Unspent Advance Must Be Returned - Employees are required to return to the employer, within a reasonable period, any amount advanced that is in excess of the substantiated expenses.
USNH will avoid income tax withholding on cash advances and expense reimbursements by meeting all requirements for an Accountable Plan and insisting that all employees comply with these requirements.
2. Administrative Procedures
a. Business Connection - Employees traveling more than one business day while on official USNH business may receive an advance to cover an estimate of the reasonable business expenses expected to be incurred during their travel. Employees are strongly encouraged to use a personal charge card, or a USNH Purchasing Card when allowed, to reduce the need for cash advances.
If it is not possible to use a charge card, a USNH purchase order should be issued to the vendor to avoid the need for a cash advance. Advances will not normally be granted for airline tickets, hotel or conference fees, or items that should be secured through standard procedures preceding the travel. Advances are to be used for incidental business expenses. Examples of these expenses include transportation to/from an airport, parking, tips given to porters, baggage carriers, bellhops/hotel maids. Security deposits for temporary lodging/housing where an employee will be staying while traveling on USNH business are also eligible for travel advances. In this case, the employee must return the entire amount of the original deposit upon their return. Any amount retained by the landlord is to be paid by the employee. All requests for advances must be documented by estimating anticipated expenses and submitting on the standard USNH Pre-Approval/Advance Form as described in Procedure 07-117, Travel Pre-Approval/Advance.
b. Substantiation - All travel expenses must be substantiated with original receipts accompanying an itemized USNH Personal Reimbursement Form (or on a Petty Cash Voucher in the case of travel paid from petty cash). Any advances must be referenced on the reimbursement form to ensure that the reimbursement total is appropriately reduced by the amount advanced.
c. Unspent Advances Must Be Returned - All unspent or unsubstantiated advances for travel and other business expenses must be returned to the USNH Travel coordinator or the Campus Travel Manager, BSC Director or designee with proper substantiation within 10 business days after completion of the related trip. Employees failing to return unused USNH cash advances or proper substantiation within 10 business days will be subject to payroll deduction for the amount not returned or unsubstantiated after adequate written reminders have been given to the employee. Employees with outstanding advances are not eligible to receive additional advances until any outstanding advances are cleared.
d. Advance Reasonably Calculated - Advances must be kept to a minimum and should be used only for minor expenses. Travel advances are generally limited to $300 per person per week maximum unless specifically approved in writing by the campus Chief Financial Officer (CFO) or his/her designee. Special arrangements which follow the intent of these procedures may be required for athletic team travel, and other group activities. Requests for advances must be approved by the responsible dean/director/department head using standard institutional forms. Advances should be processed through the USNH Travel Coordinator or Campus Travel Manager, BSC Director or designee at least four business days before the check is needed. Advances are released two business days prior to the travel departure date.
e. Advances to non-employees - Advances of USNH funds will not be made to persons who are not currently affiliated with USNH. For this purpose, current USNH students, when functioning in an official capacity are considered affiliated with USNH. Advances will not be provided to any consultants. Consultants incurring travel costs associated with their work for USNH must invoice their travel expenses as a fee for services, and the cost should be charged to account codes in the 717-Professional services range.
B. DETAILED OPERATING PROCEDURES
1. Responsibilities of USNH Disbursement Services
a. Maintain a detailed list of all employees with advances outstanding. The list will include the employee's name and USNH ID#, the amount of the advance, the date the advance was issued, the date the advance is expected to be returned (e.g., trip return date plus 10 days), and the dates reminders were sent to the employee. The list must be reconciled each month and sent to the USNH Director of Accounts Payable and Payroll by the 10th day of the following month, even if no employee is presently delinquent.
b. Send a standard written reminder to the Campus Travel Manager, BSC Director or designee with information necessary to process the USNH Personal Reimbursement request to substantiate the expenses associated with the trip. The reminder should state the facts and site this procedure. A copy of the reminder will be sent to the advance recipient and the dean/director/department head who authorized the advance. If the substantiation is not received, a second reminder will be sent about two weeks from the date of the first reminder.
c. On the 10th of each month the USNH Disbursements will complete a listing of all outstanding advances reconciled to Banner. Where two or more reminders have been sent to an employee with no response, the outstanding amount will be deducted from the employee's next paycheck.
d. Initiate Payroll Deduction. USNH Disbursements Services will initiate the deduction and send a notice when the deduction will take place to the Campus Travel Manager, BSC Director or designee by forwarding a reference to the JV document to transfer the money into the campus travel advance account. The campus representative will notify the employee of the date and amount of the payroll deduction.
e. USNH Disbursements Services will clear/cancel any open credit invoice transactions in the Banner System.
2. Responsibilities of the Campus Travel Manager, BSC Director or other designee
If the USNH Director of Accounts Payable and Payroll delegates travel advance responsibilities to the Campus Travel Manager, BSC Director or other designee, the Campus Travel Manager, BSC Director or designee are responsible for completing all tasks outlined in section B.1. above.
The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.