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Business and Financial Policies and Procedures

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 (P-Card) is not available or cannot be used to make the purchase.

All reimbursement requests for cash purchases must include a justification and/or documentation demonstrating the three requirements listed above.

Cash purchases must conform to the restrictions placed on purchases from university and state employees (See 7.2, Restricted Items and Purchases Requiring Special Approval). Cash purchases must also conform to the same prohibitions and restrictions established for P-Card use for certain commodities and services, such as alcoholic beverages, firearms and ammunition, furniture, animals and radioactive chemicals (See 7.6, P-Card).

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

The University of Illinois System qualifies as an exempt organization and, therefore, is exempt from paying sales and use tax in certain states. See 18.6, Sales and Use Tax/Goods and Services Tax, for additional information, including sales and use tax assessed by other states.

Individuals making authorized cash purchases for approved university 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 reserves the right to deduct the amount of sales tax paid when reimbursing individuals for cash purchases.

Cash purchases that exceed the dollar threshold listed or do not comply with this policy may have the reimbursement request rejected and the individual will be responsible for the payment.

Reason for the Policy

This policy seeks to maximize the use of contracted University of Illinois System vendors or a University of Illinois issued P-Card, 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-University of Illinois System issued cash equivalents. Travel related purchases are subject to policies in 15 – Travel.

Procedure

To request reimbursement to an employee for a cash purchase, a Travel and Expense Management (TEM) expense report using the Purpose “Employee Misc Expense Reimbursement” 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 P-Card or University of Illinois System contract was not available for the purchase).

Departmental Petty Cash Fund - Individuals using personal funds for purchases of $100 or less may be reimbursed from an authorized departmental petty cash fund. The reimbursement is subject to the policies and procedures in 10, Cash Handling.

Individuals using Petty Cash for an authorized cash purchases must present a copy of the State of Illinois Sales Tax Exemption Letter to merchants and request that sales tax not be charged.

Related Policies and Procedures

7.6 – The University Purchasing Card (P-Card) – Purchasing Guidelines

Additional Resources

Strategic Procurement – Contracts & Awards
iBuy

Last Updated: September 28, 2017 | Approved: Senior Associate Vice President for Business and Finance | Effective: May 2004

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