7.4 Cash Purchases

Policy Statement

Purchases made with cash or non-University-of-Illinois-System-issued cash equivalents less than $500 may be made if:

• the unit head determines that the best interests of the unit and the university are served;
• a University of Illinois System contract is not available for the purchase; and,
• a purchasing card (PCard) is not available or cannot be used to make the purchase.

Cash purchases must conform to the restrictions placed on purchases made by system, university, and state employees (see 7.2 Purchase of Goods and Services—Restricted Items and Purchases Requiring Special Approval). Cash purchases must also conform to the same prohibitions and restrictions established for PCard use for certain commodities and services, such as alcoholic beverages, firearms and ammunition, furniture, animals, and radioactive chemicals (see 8.12.4 Restricted & Prohibited PCard Purchases).

Cash purchases cannot be artificially divided to circumvent the dollar thresholds established in this policy.

The system qualifies as a tax-exempt organization and, therefore, is exempt from paying sales and use tax in certain states. For additional information, including sales and use tax assessed by other states, see 18.6 Sales and Use Tax/Goods and Services Tax.

Individuals making authorized cash purchases for approved university or system business purposes must present a copy of the State of Illinois Sales Tax Exemption Letter to merchants and request that sales tax not be charged. If an individual fails to obtain the proper sales tax exemption at the time of the purchase, the University of Illinois System will deduct the amount of sales tax paid when reimbursing individuals for cash purchases.

Reimbursement requests for cash purchases that exceed the dollar threshold listed or do not comply with this policy may be rejected and the individual will be responsible for the payment.

Reason for the Policy

This policy seeks to maximize the use of contracted system vendors or a system-issued PCard, to minimize payment processing requirements for a purchase, before considering a cash purchase.

Applicability of the Policy

This policy applies to all purchases made with cash and non-system-issued cash equivalents. Travel-related purchases are subject to policies in 15 Travel. Business meal and refreshment related purchases are subject to policies in 8.1.1 Business Meals, Food Supplies, and Alcohol.

Procedure

To request reimbursement to an employee for a cash purchase, an Emburse expense report must be submitted for the purchase. These reimbursements are subject to the less than $500 limit and must be accompanied by supporting documentation (such as an original receipt) and justification demonstrating that a PCard or system contract was not available for the purchase should be retained in the unit.