8.3.2 Reconciliation of a Cash Advance

Policy Statement

A reconciliation of a cash advance tracks the disbursement of funds for accountability and tax reporting purposes. A reconciliation occurs when an advance is replenished or closed. A cash advance must also be reconciled by the responsible unit at least every 90 days from the advance start date or last reconciliation date to meet fiscal and calendar year tax reporting requirements; however, monthly reconciliations are recommended.

A cash advance that is not reconciled as required, may be suspended and cannot be replenished. Failure to close or reconcile a cash advance, as required, may result in an employee not being allowed future advances.

Reason for the Policy

To reconcile a cash advance as needed.

Applicability of the Policy

Whenever a cash advance must be reconciled.

Procedure

Cash advances do not have to be closed and then reopened to meet fiscal and calendar year reporting requirements unless a study exceeds 18 months. Custodians should always attempt to reconcile as promptly as possible, observing the minimum reconciliation standards.

If, within 60 days of the closing of the study the advance cannot be closed and no additional funds are needed as a replenishment, the custodian should reconcile the undisbursed advance funds (including undisbursed gift cards, etc.) and disbursements using the Cash Advance Settlement Log. This documentation must be signed by the custodian and retained in the unit’s records.

When an advance is not closed within 60 days of the closing of the study or within 60 days of the advance end-date (whichever is sooner), the unreconciled portion of the advance may be reported as taxable income to the custodian in accordance with IRS regulations and may also be deducted from the employee’s wages or subject to collection.