SECTION 10 - Cash Handling
SECTION 10.9 - Cash Advances For International
Activities
Date: June 2004
Approved: Senior Associate Vice President for Business
and Finance
University units may administer one or both of two types of international
activities located overseas: Study Abroad Programs and/or programs for research,
development, etc. The University provides these units with temporary cash
advances to fund their foreign program and study abroad operations. These
advances are used on-site to acquire goods and services in accordance with the
mission and intent of each specific international program.
Whenever possible, these advances should be deposited in foreign bank
accounts (see Section 14.10, Foreign Bank Accounts.
However, when the country's economic infrastructure is not
conducive to responsible stewardship through bank accounts (due to circumstances
such as highly unstable currencies and local economies, unsound banking systems,
or unusual local conditions), the advance may be retained in the form of
currency.
The unit representative or delegate assigned responsibility to administer the
specific program serves as custodian of the cash advance. The custodian is
fully responsible to assure the cash advance is properly secured, maintained,
and used for its established purpose.
CUSTODIAN RESPONSIBILITY
The custodian is accountable for all
aspects of maintaining the advance, including its safekeeping, appropriate usage
of the funds, and familiarity with this section and related cash handling
policies and procedures.
Specifically, the custodian:
- Initiates establishment of the advance and, if appropriate, establishes
the bank account.
- Does not allow anyone else access to program cash or bank accounts without
documented authorization to delegate access to others.
- Keeps the program advance intact and physically separate; it should never
be commingled with other cash on hand or deposited in the same bank account
with other funds.
- Exercises caution and prudence in the administration and safeguarding of
the program funds.
- Issues payments only for reimbursement of money actually expended for
program purposes. (In some cases, the custodian may issue temporary
advances from program funds if the intended use complies with the purpose of
the advance. The custodian, however, remains fully responsible for these
advances, and must take care in selecting appropriate situations and persons
to whom the cash will be entrusted.)
- If a person will be transporting cash or other monetary instruments to
another country in an aggregate amount of greater than $10,000, the Financial Crimes
Enforcement Network (FinCEN) requires that Form FinCEN 105, Report of
International Transportation of Currency or Monetary Instruments, must be
filed with the Bureau of Customs and Border Protections.
- Obtains documentation of transactions before expending funds.
Documentation must (1) show that payment to the vendor has occurred; (2) be
prepared on the original stationery, invoice, or other appropriate form of the
original vendor; (3) provide the date, amount, and description of transaction;
and (4) provide the signature of the program participant being reimbursed.
- Repays any money lost because of improper use of fund cash or failure to
properly safeguard the fund. Money lost due to circumstances beyond the
control of the custodian will be repaid from the unit's available operating
funds.
- Determines whether the advance balance should be increased, decreased, or
closed, and initiates the request for Office of Business and Financial
Services (OBFS), University Payables approval (see "Changing the Advance Amount" in
this section).
- Notifies the OBFS, University Payables immediately upon being relieved of
custodial responsibility or
changing address.
An Employee Travel/Miscellaneous Reimbursement Form
is used to
reimburse a program cash advance and must be processed as frequently as warranted by
the volume of expenditures. Reimbursement forms must always be submitted to replenish
the fund to its full balance as of June 30 of each year to assure that
expenditures are recorded in appropriate fiscal years. The custodian should
resolve all overages and shortages immediately. (See also "Reconciliation
of the Advance Amount" in this section.)
REQUESTING AN ADVANCE
The custodian of the unit's program advance must
submit an authorized request for advance form to the appropriate unit official
charged with approval of these requests (see
Section 15.2,
Travel and Off Campus Program Advances for specific information).
After unit approval has been obtained, the custodian must present the form to
the OBFS, University Payables for
approval. Once approved, the custodian may acquire the funds, payable
directly to the custodian, through wire transfer (see Section 8.7 -
Electronic Disbursements), foreign draft (see Section 8.8 -
Foreign Drafts) or check, from the OBFS, Bursar Office (UIS), Student Financial Services and Cashier Operations
(UIC), or Office of Student Accounts and Cashiers (UIUC).
Whenever possible, these advances should then be deposited in foreign bank
accounts in the name of the Board of Trustees of the University of Illinois (see
Section 14.10 - Foreign Bank
Accounts). If local conditions make depositing in
a foreign account undesirable (due to circumstances such as highly unstable
currencies and local economies, unsound banking systems, or unusual local
conditions), the cash advance should be converted to local currency and
safeguarded.
RECONCILIATION OF THE ADVANCE AMOUNT
The custodian is responsible for
maintaining a current reconciliation of the advance cash or bank account. That
is, current available cash plus expenditure documentation on hand must always
equal the balance originally advanced.
Overages in program funds are deposited to the University Miscellaneous
Income Fund when the advance is replenished. Shortages are personally
repaid by the custodian or by the unit, as applicable, and deposited into the
advance bank account or added to the cash on hand (see also "Custodian
Responsibility" in this section).
Unit heads must designate an employee not reporting to the custodian to
conduct, at a minimum, semi-annual unannounced verifications/reconciliations, as
well as resolve any overages/shortages (see Section 15.2,
Travel and Program Advance for specific information). Documentation of
the unannounced verification should be provided to the unit head and
retained. Additionally, the unit head must appoint an employee not
reporting to the custodian to reconcile the advance's bank statement monthly and
provide the unit head a copy of each monthly reconciliation for review and
approval. A copy of each bank statement and bank reconciliation must also
be forwarded to the OBFS, University Accounting and Financial Reporting.
REPLENISHMENT OF PROGRAM BANK ACCOUNT OR CASH ON HAND
Advances may be
replenished as needed, but not for amounts greater than the original advance and
only based upon required documentation of expenditures from the advance.
The custodian should review the level of fund activity periodically to determine
whether the advance amount should be increased or decreased.
The following steps are required to replenish the advance:
- An Employee Travel Miscellaneous Reimbursement Form should be prepared, payable to the custodian. In the body of the reimbursement form, list the
amount and description of each transaction to be reimbursed. If more space
is required to list all transactions, attach an addendum. The foreign exchange
rate at the date of reimbursement form preparation must be used to convert the transactions
to US currency values, according to official bank rates.
- All supporting documentation (such as, original paid receipt as
described under "Custodian Responsibility" in this section) should be attached to
the reimbursement form,
obtain authorized departmental approval signatures, then submit or take it to
the OBFS, University Payables for
further approval.
- The approved reimbursement form should be presented to the OBFS, Bursar Office (UIS),
University Payables (UIC), or Office of Student Accounts and Cashiers (UIUC) to obtain cash
immediately or route it through the OBFS, University Payables to generate a check. To obtain funds in the
form of a wire transfer, see Section 8.7 -
Electronic Disbursements; for foreign drafts, see Section 8.8 -
Foreign Drafts.
CHANGES IN CUSTODIAN
Before a new custodian can assume responsibility
for an advance, the existing custodian must immediately inform the OBFS, University Payables
of the change, reconcile the advance balance,
and replenish the advance (see "Replenishment of Program Bank Account or Cash on
Hand" in this section). In coordination with the existing custodian, the
new custodian must complete a new request for advance form under the name of the
new custodian and submit it to the OBFS, University Payables for approval (see
Section 15.2,
Travel and Off-Campus Program Advances for more information). The
approved request for advance form for the new custodian would replace the form
for the old custodian. Custody of the cash must then be transferred as follows:
Bank accounts - The existing and incoming (new) custodians must
jointly assure that authorization for signatures and other necessary
authorizations are processed with the foreign bank to transfer responsibility
for the account to the new custodian.
Currency on hand - The existing custodian must deliver the amount of
the currency to the new custodian who has secured approval for a new cash
advance in his/her name.
CHANGING THE ADVANCE AMOUNT
Sometimes fluctuations in program activity
may prompt the need to increase or decrease the advance. An advance may be
increased, decreased, or permanently transferred, only by formal approval of
both the custodian and the OBFS, University Payables.
If warranted by program activity, the custodian may contact the
OBFS, University Payables for approval to adjust
the advance. This approval is documented with a new, approved request for
advance form that reflects the adjusted balance (see Section 15.2,
Travel and Off-Campus Program Advances for specific information).
To increase the amount of the advance, the custodian must present to the
OBFS, Student Financial Services and
Cashier Operations (UIC), Bursar Office (UIS), or Office of Student Accounts and
Cashiers (UIUC) an approved request for advance form in the amount of the
increase. To reduce the amount of the advance, either cash, a check, or an
Employee Travel Miscellaneous Reimbursement Form must be received for deposit.
CLOSING THE ADVANCE
Approval procedures for closing the advance are
essentially the same as for those indicated under "Changing the Advance Amount,"
except the custodian must return the entire advance balance of cash for deposit
with the OBFS, Bursar Office (UIS),
Student Financial Services and Cashier Operations (UIC) or Office of Student
Accounts and Cashiers (UIUC) and, if applicable, close the bank account in
accordance with
Section 14.8
- Authorization to Open/Close Bank Accounts.
