Michigan State University
Controller's Office

Administration Bldg
426 Auditorium Rd, Rm 305
East Lansing, MI 48824
517 355-5020

SECTION 61: Cash Advances: Travel and Research Participants

Last updated: September 2016

I. Types of Cash Advances

  1. Travel - Specifically for MSU business travel outside the United States or Chief of Parties traveling domestically or internationally with non-MSU employees or student groups. See Section 70 for eligibility and limitation details.
  2. Research Participants – Cash payments made to individuals for their participation as human subjects for a research project.

II. General

  1. Cash advances are not charged to the department's account, but are carried as receivables by the MSU Controller’s Office. The department's account is charged as reimbursements are submitted.
  2. The account fiscal officer and custodian acknowledge that they have read and are aware of the following responsibilities. Any penalties or interest incurred as a result of lack of adherence to the following will be the responsibility of the department.
    1. Payments in any amount made to non-resident aliens must comply with Section 77.
    2. Payments to research subjects totaling $600 or more (either individually or cumulatively) during a calendar year may be reportable to the Internal Revenue Service. In these situations, please call Accounting (355-5000) for reporting requirements.
    3. Individuals applying for cash advances (“Advancees”) must sign a promissory note accepting fiscal responsibility for the funds being provided to them by Michigan State University for travel, research, sponsored events, or other approved university activities. By signing the promissory note, the “Advancee” is agreeing to timely submission of receipts and supporting documentation via the MSU Finance System. Timely equates to prior to the due date stated on the promissory note. If the “Advancee” is participating in other MSU sponsored programs, such as the Corporate Travel Card, and is not complying with stated and agreed upon payment terms of such programs, the individual will not be provided a cash advance.
  3. For research participant payments, departments should also consider the MSU Purchasing Card (P-Card) as an alternative. The P-Card may be used to purchase gift cards for participant payments. A detailed distribution log must be maintained with Card receipts.
  4. It is the responsibility of the custodian and/or unit administrator to inform the issuing office in writing when there is a change of a staff member who is responsible for the cash advance fund. A new note must be signed by the individual assuming responsibility of the fund whenever a change in custodian occurs.
  5. The minimum amount for an advance is $300. Travelers are not eligible for advances if the CAF limits reimbursement on expenditures to less than $300. The amount of each advance is to be determined by the Fiscal Officer. The advance is to cover reimbursable costs and should not exceed estimated expenditures. Any limitations on the reimbursement amount must be set by the Fiscal Officer prior to issuance of an advance.
  6. No advance will be issued when the intended account to be charged is an agency account (account numbers beginning with “A").
  7. CASH ADVANCES WILL NOT BE ISSUED TO ANYONE WITH AN ADVANCE THAT HAS A “PAST DUE” STATUS. THAT ADVANCE MUST BE FULLY RECONCILED PRIOR TO THE ISSUANCE OF A NEW CASH ADVANCE.

III. Use of Travel and Research Advance Funds

  1. The handling of the cash advance fund is the responsibility of the individual authorized by the Fiscal Officer or administrative head. UNDER NO CIRCUMSTANCES SHOULD THIS FUND BE USED FOR REASONS UNRELATED TO THE STATED BUSINESS PURPOSE OF THE ADVANCE.
  2. Travel advances cannot be obtained by one person to cover multiple individuals' expenses.
  3. No advance will be issued to cover conference registration fees or hotel deposit fees. Conference fees should be paid by an MSU P-Card wherever possible.
  4. No advance will be issued for stipends, honorariums or consulting fees.
  5. No travel advance will be issued to cover the cost of airfare/rail. Michigan State University travelers are encouraged to prepay airfare/rail through one of the University’s Preferred Travel Agencies.

IV. Obtaining the Cash Advance Funds

  1. Procedure
    1. Travel and Research advances may be obtained by completing a Cash Advance Form (CAF) and attaching it to an Internal Billing (IB).
    2. The advance recipient is to prepare a Cash Advance Form (CAF) detailing the amount and purpose of the advance.
      1. An Internal Billing (IB) with request for a travel advance of $25,000 or more must be ad hoc routed to AVP/Dean/Associate or Assistant Dean/College Budget Officer for approval.
    3. An Initiator (the advance recipient, the account Fiscal Officer (FO), etc.) will complete an Internal Billing (IB) document to charge the $15 advance fee to a departmental account string (object code 6489) and credit income to account number XT022906, object code 4050.
      1. In the ‘Description’ field of the IB, the Initiator is required to enter “Advance-Traveler’s Last Name”.
      2. In the ‘Explanation’ field of the IB, the Initiator will include a brief reason for the advance request.
      3. Initiator is required to attach the completed CAF to the IB.
    4. The IB will automatically route for approval to the FO on the account charged (except if the FO is also the Initiator). By approving the IB, the Fiscal Officer is:
      1. Approving the $15 advance fee;
      2. Approving the cash advance amount noted on the CAF.
      3. Guaranteeing repayment of a travel advance from departmental funds if the appropriate vouchers are not submitted.
    5. Once approved at the departmental and college level (when required), the IB will route to Central Accounting for approval. As long as the amounts, account numbers, and object codes are correct, and the Cash Advance Form has been attached, Accounting will approve the document, making it FINAL.
    6. The advance recipient must visit the Accounting Office, 426 Auditorium Road, Administration Building Room 360, in person to obtain the Promissory Note for the advance.
      1. Advances are available for pick up between 8:30 a.m. to 4:00 p.m. Monday through Friday, phone 355–5000.
      2. The applicant must also present the Internal Billing Document Number.
      3. Valid signed photo identification is required.
    7. A non–interest bearing promissory note will be issued for each advance which specifies the repayment date.
      1. Advance recipients will sign their Promissory Note in triplicate and proceed to the MSU Cashier’s Office, Administration Building Room 110 to cash the note.
      2. Advances may be received in either of the following two ways:
        1. Cash — the promissory note may be exchanged for cash in the Cashier's Office (110 Administration Building).
          1. The Cashier’s Office should be notified at least 2 days prior to the desired pick up date if the advance recipient is requesting cash in specific denominations or advances greater than $5,000.
          2. If exchange of the note is done by a person other than the traveler, it will be issued by check only, made payable to the traveler.
        2. Check — the promissory note for any amount may be redeemed for a check in the Cashier's Office.
    8. Faculty, staff or graduate students requesting an advance must do so in person. No third–party advances will be issued unless the traveler is away from the East Lansing area through the departure date. In this case, the advance will be issued as a check made payable to the advance recipient only and will require their endorsement prior to deposit.
      1. A travel advance may be obtained no more than 7 calendar days prior to departure unless an exception is granted for unusual circumstances.
    9. If an advance is requested for approved undergraduate student travel, the authorization part of the Cash Advance Form (CAF) must be prepared in the name of the student(s) and a faculty or staff member responsible for the student(s). The promissory note will be issued to the faculty or staff member who may then cash it and distribute it to the student(s). The faculty or staff member will be held responsible for the repayment of the advance.
    10. When the traveler or researcher is away from the East Lansing area and requests an additional advance, a new CAF and IB must be completed and approved prior to an additional advance being issued.

V. Repaying Travel and Research Advance Funds

  1. Due date for reporting and/or repayment of travel and research advances is clearly printed on the Promissory Note signed and received by the advance recipient.
    1. For Travel Advances, reporting and/or repayment of advances are due no later than 30 days after the date the trip is completed (return date).
    2. Research Advance reporting and/or repayment of advances are due on the date indicated on the Cash Advance Form submitted with the cash advance request. Typically, this is no more than 90 days from the date of issue.
    3. Due dates may be extended on a case by case basis upon approval of a written request submitted to the University Travel Office prior to the original due date.
    4. Failure to promptly repay a travel advance may result in the traveler incurring taxable income for the outstanding amount.
    5. Repayment of the unpaid advance will remain an obligation of the traveler.
    6. In the rare cases where an advance is issued for a period greater than 90 days, advance recipients are expected to report expenditures periodically and at least every 90 days.
  2. When research or travel is canceled, for any reason, the cash advance must be repaid immediately. If research or travel is rescheduled, a new Cash Advance Form (CAF) and Internal Billing (IB) must be issued. Failure to promptly repay the advance upon cancellation will be considered misuse and grounds for cancellation of travel advance privileges.
  3. Any remaining cash on hand should be returned to Central Accounting or the Cashier's Office, Monday-Friday, 8:30A.M. - 4:30P.M. When repaying by cash or check, reference the 5-digit advance number so that proper credit is given.
  4. The advance recipient must reconcile the entire advance either through reporting of expenditures, repayment of funds, or a combination of both on or before the due date of the advance.
  5. If the advance recipient transfers to another University department or terminates employment at Michigan State University, the advance recipient must reconcile the entire advance prior to leaving.
  6. If a travel advance is not paid by the due date, the amount may be deducted from the employee's payroll or stipend check. If payroll or stipend deductions are required to repay a traveler's advance, loss of the cash advance privileges may result.
  7. For travel advances that enter the 60 day past due category (90 days since the end of travel) during a given month and remain as such at month end, a $25 fee will be charged to the MSU account of record.
    1. The fee will continue to be charged at the end of ensuing months until a Travel Expense Report and DI are approved and the advance is formally closed with the Travel Office.
    2. If an advance becomes outstanding for 90 days or more (120 days since the return date), the MSU Travel office will take steps to collect the amount due from the traveler up to and including payroll deductions.
    3. In addition, the advance recipient may be permanently barred from obtaining future cash advances, especially in cases of repeated instances of overdue advances.
  8. Departmental cash funds are reviewed periodically by Internal Audit.

VI. Reporting Travel and Research Advance Funds

  1. Travel Advance Reporting Procedures
    1. See Section 70, IV. Travel Expense Report (TER), for further details.
    2. Highlights of the Travel Expense Report:
      1. Preparers should note the Travel Advance number in the description field.
      2. Section A provides for recording of any prepaid airfare/rail invoice(s) and amount purchased through a MSU Preferred Travel Agency.
      3. Section B should include transportation into/out of destination and any transportation while in travel status.
      4. Section C should contain any additional information to support travel expenses claimed on the TER.
      5. Section D is where travel expenses can be assigned to an MSU accounting string. Data in this section is to be entered on the Distribution of Income and Expense (DI).
      6. The total claim (or limit) in Section E must match the total of Section D.
  2. Research Advance Reporting Procedures
    1. The Non-Travel Advance Reconciliation Worksheet is very similar to the Non-Travel Reimbursement Worksheet.
    2. Highlights of the Non-Travel Advance Reconciliation Worksheet:
      1. Preparers should note the Research Advance number at the top of the form.
      2. The Payee name, MSU NetID (if applicable), status, department, department address, and account name should be documented at the top of the form.
      3. Expenditures should be itemized with a full description, business purpose, and amount. Research subject payee names should not be included. Departments are required to maintain proof of payments made to research subjects via cash, check, and non-cash payments such as gift cards. This can be in the form of a log or pre-numbered departmental receipts. The recipient is required to sign the log or the receipt to indicate the payment was received. In cases where signatures cannot be obtained, a detailed explanation must be included in the department records (date gift cards were mailed, etc.).
      4. University departments are required to track the names, addresses, total amount, and if any one payment is over $150, Social Security Number, of all non-check payments (mainly, cash and gift cards) made by the University to individual research subjects each calendar year. Cumulative payments to any one participant of $600 or greater must be forwarded to Accounting (Administration Bldg, 426 Auditorium Road Room 360) by December 31st of every year.
  3. Distribution of Income & Expense (DI) Procedures
    1. The Distribution of Income and Expense (DI) must contain the following information:
      1. The DI must reflect the amount of total travel expenses incurred or limit (if applicable) and applicable accounting string information.
      2. The Advance Number, Name in which the Travel Advance was issued, and the Traveler’s Name (if different) must be documented on the DI.
      3. Within the DI, the Accounting Line “From” is used to relieve the Controller’s Office account of the travel advance expense. The Total from the TER must be recorded with the following account information:
        1. Account Number: XZ052171
        2. Object Code: 6173
        3. Amount: Total from TER
    2. Within the Distribution of Income and Expense (DI), the Accounting Lines “To” should match Section D on the Travel Expense Report. Travel expenses will be charged according to the information on the DI.
    3. The Travel Expense Report or Non-Travel Advance Worksheet and images of all receipts must be attached to the DI.
    4. Receipts must be scanned following MSU procedures for imaging: http://archives.msu.edu/records/scanning.php?records_scanning.
    5. If the advance recipient is a MSU employee, they must “approve” the Distribution of Income and Expense document.
      1. If the MSU employee advance recipient is the DI initiator, this approval is completed upon submission of the DI.
      2. If not, the initiator must ad hoc route the DI to the applicable employee advance recipient and the employee must approve the DI before further routing will continue.
    6. If the Advance Recipient is not a MSU employee, no ad hoc routing of the DI is necessary for non-employees.
    7. For accounts beginning with “RC” (grant accounts), Contract and Grant Administration must approve the DI. Therefore, the DI initiator must ad hoc route the DI for approval to the group “CGA Processor Level 1”.
    8. If the Travel Expense Report, Non-Travel Advance Reconciliation Worksheet, or the DI is incorrect, the DI will be disapproved by Accounting. A new DI must be created with all required attachments and submitted through the required workflow.
    9. Three outcomes are possible when reconciling travel advances:
      1. The advance recipient spends exactly the amount of the advance. In this case, the applicable worksheet and receipts are attached to the DI and submitted through the required workflow as outlined above. There is no reimbursement to the advance recipient or refund to MSU.
      2. The advance recipient owes MSU money because the entirety of the cash advance was not spent. In this case, the advance recipient writes a check or remits cash to MSU which is deposited by the advance recipient (referencing the Advance Number) in the Cashier’s Office, Hannah Administration Building, 426 Auditorium Road, Room 110. The applicable worksheet and receipts are attached to the DI and submitted through workflow as outlined above.
      3. The advance recipient is owed money because expenses were greater than the cash advance. In this case, the applicable worksheet and receipts are attached to the DI and submitted as outlined above. Once Accounting approves the worksheet and DI, Accounting will process a reimbursement for the balance due the advance recipient. In this case, the advance recipient will receive a check (direct deposit is not available).

VII. Exhibits/Forms