Policy On Disbursements 08

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.
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 order to process payment requests. An exception is
granted 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 generally insufficiently detailed to provide adequate supporting
documentation. Original receipts for credit card purchases are obtainable from the vendor and should
always be attached to the check request. If the credit card receipt does not provide the name of the
person making payment, it is requested that a copy of the credit card showing only the last 4 digits of
the credit card that made the payment and the persons name on the card be provided.
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Exceptions to receipt requirement:
Business use of a personal car at standard mileage rate

Incidental tipping
Expenditures under $25
Per Diem based on University approved rate or U.S. State Department rate
(See section on CASH DISBURSEMENTS - TRAVEL REQUESTS on page 3 for more information)
Reconstruction of records is allowable if originals lost through circumstances beyond the taxpayers
control, such as fire, flood, etc. There may be some cases in which the Foundation will reimburse a
person for bona fide business expenses when receipts have been lost, but the reimbursement may have
to be included as taxable compensation.
IRS REQUIRES THAT PAYMENTS TO INDIVIDUALS WHICH DO NOT QUALIFY AS

ACCOUNTABLE PLAN, BE INCLUDED IN THE PERSONS INCOME, EITHER ON A W-2 OR
ON A FORM 1099.
Be accounted for on a timely basis
The Foundation will not reimburse for expenditures more than six months old. However if a person
receives a TRAVEL ADVANCE, IRS guidelines are more stringent. All travel advances must be
accounted for within 60 days. (See travel reimbursement procedures below. Deduct the amount
advanced from your requested reimbursement or remit a check made payable to the Foundation with a
non-gift deposit form if your advance exceeds the expenses).
Under Reg. 1.62-2 (f) an Accountable Plan must require persons to return within a reasonable period
of time the amounts reimbursed that exceeded substantiated business expenses (advances).
Reg. 1.62 (h) states that if a company has an Accountable Plan but the person does not return excess
amounts within reasonable time, the amount, which is taxable, is reported as compensation to the
person.
Procedures
Disbursement Requests
All requests for disbursements must be on a Disbursement Request Form. The form must be completed
in its entirety.
Detail the purpose for which the funds are to be used, (i.e., use for materials to be purchased,
reason for meeting and with whom. See section on Accountable Plan for more detailed
instruction for travel and other types of reimbursements.)
Original supporting documentation must be attached (i.e. detailed invoices or receipts for all
expenses over $25, for university employees a copy of approved Out-of State Travel
authorization). Balance due statements are not acceptable.
Meal reimbursements should include the table check as well as the proof of payment.
Two signatures are required the requester and the approver. The approver must be one of the
two persons who are listed on the account agreement form as having signature authority.
However, if the check is to be made payable to one of those persons, that persons supervisor
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must sign the form. It is vital to understand that their signature serves as certification of the
propriety of the requested expenditure to the best of their knowledge and belief
If the form is incomplete of its missing pertinent supporting documentation, the missing information
will be identified and the request returned to the sender.
Disbursement Request Forms received at the UMCPFs Business Office by 2:30 P.M. Thursday will
usually be available the following Wednesday. Because procedure requires all requests be reviewed
prior to check writing, request will be processed until the following week.
The foundation will not reimburse for:
Personal expenses i.e. meals, room, travel for a spouse or family, or when not on bona-fide
business;
Purchase and/or maintenance of equipment located at a home or other off-site location
Political contributions
Questionable items - those not in compliance with policies and grant requirements established
by USM, the granting agency, or the Foundation, or those that may give the perception of
misuse of charitable funds)
First or business class airline tickets, except for overseas travel, otherwise must be pre-
approved due to extenuating circumstances;
Loans to university employees or any other individual
Payments of fines, penalties or finance charges
Donations to other charitable organizations unless it is a de minimis amount given as an
expression of condolence or sympathy
Travel Reimbursements
An itinerary with a brief description of the business activity for each day must be provided. If
reimbursement request relates to attending a conference, a copy of the brochure with a note stating the
traveler attended the event, is acceptable.
Itemization of the expenses:
The hotel receipt must be a folio that itemizes the charges

Per Diem or actual costs (with receipts) may be used for meals
For domestic travel, use the Travel Meal Rates. Please see:
http://www.dbs.umd.edu/travel/services/rates.php
For foreign travel: use the State of Maryland. Please see:
http://www.dbs.umd.edu/travel/services/rates.php
If you are billing for actual meal expenses, include a receipt for all meals that exceed the per diem rate.
Amounts exceeding the per diem may be questioned.

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What are the guidelines for cash disbursements?

What are the procedures for requesting disbursements?

Policy and Procedures for CASH DISBURSEMENTS

provide a direct benefit to a school, institute, agency, or program;

A qualified Accountable Plan requires all expenditures to

Have a bona-fide business purpose

Business use of a personal car at standard mileage rate

IRS REQUIRES THAT PAYMENTS TO INDIVIDUALS WHICH DO NOT QUALIFY AS

Be accounted for on a timely basis

The foundation will not reimburse for:

Itemization of the expenses:

The hotel receipt must be a folio that itemizes the charges

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