Policy and Procedures for Cash Disbursements
Policy and Procedures for CASH DISBURSEMENTS
Cash Disbursements, via the University of Maryland College Park Foundation, are requested by the specific account holder in various schools and departments at College Park. Please use the Disbursement Request Form in Appendix H.
Control Objectives:
To ensure that cash is disbursed only upon proper authorization supported by the appropriate documentation, is for valid business purposes, and is properly recorded, all disbursements must:
• provide a direct benefit to a school, institute, agency, or program; • properly reported for tax purposes; • used in compliance with any donor restrictions
General Guidelines
Accountable Plan:
The Foundation has an "Accountable Plan". The term “Accountable Plan” was developed by the IRS to set forth rules, which define legitimate expense reimbursements.
A qualified Accountable Plan requires all expenditures to
• Have a bona-fide business purpose
The IRS may view a disbursement as providing a personal benefit if there is any doubt concerning its business purpose. Even though in some cases the business purpose may be implied, it must be specifically documented to pass IRS scrutiny.
Paying for or reimbursing for lavish or extravagant expenses in unacceptable. These terms are used in IRC Sec 162 and are repeatedly used in IRS documentation, usually with a statement that these expenses are non-deductible. The Foundation will determine at its sole discretion either not to pay or reimburse or to reduce payment requests for expenses, which are unreasonable.
• Be properly substantiated
The Foundation requires original receipts in the case where an employee is reimbursed for a portion of the expenses from University sources. In these instances, a copy of the receipt and the State reimbursement form will be accepted. Otherwise, the Foundation will not reimburse for expenses, which lack original receipts.
Credit card statements are
Cash Disbursements, via the University of Maryland College Park Foundation, are requested by the specific account holder in various schools and departments at College Park. Please use the Disbursement Request Form in Appendix H.
Control Objectives:
To ensure that cash is disbursed only upon proper authorization supported by the appropriate documentation, is for valid business purposes, and is properly recorded, all disbursements must:
• provide a direct benefit to a school, institute, agency, or program; • properly reported for tax purposes; • used in compliance with any donor restrictions
General Guidelines
Accountable Plan:
The Foundation has an "Accountable Plan". The term “Accountable Plan” was developed by the IRS to set forth rules, which define legitimate expense reimbursements.
A qualified Accountable Plan requires all expenditures to
• Have a bona-fide business purpose
The IRS may view a disbursement as providing a personal benefit if there is any doubt concerning its business purpose. Even though in some cases the business purpose may be implied, it must be specifically documented to pass IRS scrutiny.
Paying for or reimbursing for lavish or extravagant expenses in unacceptable. These terms are used in IRC Sec 162 and are repeatedly used in IRS documentation, usually with a statement that these expenses are non-deductible. The Foundation will determine at its sole discretion either not to pay or reimburse or to reduce payment requests for expenses, which are unreasonable.
• Be properly substantiated
The Foundation requires original receipts in the case where an employee is reimbursed for a portion of the expenses from University sources. In these instances, a copy of the receipt and the State reimbursement form will be accepted. Otherwise, the Foundation will not reimburse for expenses, which lack original receipts.
Credit card statements are