9.15 Operational Advances

Definitions

1. Operational Advance: A cash advance used to provide operating funds to project directors and other authorized University employees, usually in a moderate amount, for expenses on field trips, payments to subjects in approved psychological/medical experiments, and various other circumstances, where it is not practical to use the campus purchasing and payment system. Such advances are designed to assist the project director or other authorized user in those cases where exact amounts and types of expenditures cannot be predicted, and where a local disbursing function is essential to the project, as in the case of a remote location. There are two types of operational advances:
   1. Regular One-Time Advance: Used for a relatively moderate amount of funds for a relatively short period of time. Multiple regular one-time advances are not allowed for the same individual. An outstanding regular one-time advance must be settled before another advance will be reviewed or approved.

   2. Revolving Advance: Used for a relatively large amount of funds for a relatively long period of time. It will permit the initial advance amount to be kept to a minimum, and will require the individual to periodically submit an accounting with receipts to obtain additional operating funds.

   The operational advance may not be used as a travel advance for travel purposes. Travel advances are available for approved trips in accordance with Policy 14.10, Travel.

2. Operational Advance Promissory Note: The employee who has requested and will be using the funds must sign the Operational Advance Promissory Note.  In the event the funds are to be used by a non-employee, the Operational Advance Promissory Note must be signed by a responsible employee, such as the principal investigator, department head, or dean who is personally responsible for seeing that the advance is settled.  The department completes the Operational Advance Promissory Note and submits it to Accounts Payable for processing.
   
   
3. Record of Operational Advance Expenditures: The Record of Operational Advance Expenditures or equivalent expense summary must be maintained to support the expenditures incurred using the advance.  This form is provided by Accounts Payable when the employee picks up their advance check.  A sample of the Record of Operational Advance Expenditures can be found on eForms.

   Policy Statements

4. Generally, an advance is available only to an individual who is an employee of the University of Arizona. In the case of unusual circumstances, an advance may be available to a non-employee of the University of Arizona on approval by the Director, Sponsored Projects Services, for sponsored project grant and contract accounts (3-000000 through 4-999990), or by the Comptroller - Financial Management, for all other accounts.

5. Operational advance funds must not be used for expenditures which are prohibited by University of Arizona policy or per a sponsor's funding agreement.

6. The expenditures must conform to the approved budget categories, and the expenditures must not result in excess costs beyond flexibility limits of the budget categories without prior written approval from the sponsor, for sponsored project grant and contract accounts (3-000000 through 4-999990), or from the Budget Office, for all other accounts. The user of advance funds should be aware of the status of the account prior to and during the period in which the funds are being spent.

7. At the time of settlement of the operational advance, any expenditures disallowed by a sponsor agreement may be charged to the user's department funds or, if the expenditure is not allowable from the department funds under University policy, the employee responsible for the funds may be held personally liable.

8. The use of operational advance funds is subject to Federal and/or University audit, and therefore, the individual who spends these funds is responsible for the proper disbursement of the funds, receipting, and record keeping according to sponsor and University requirements.

9. The employee who signed for the funds will be held personally liable for the funds advanced. In the event of termination of employment, the University Payroll Department may exercise the right-of-offset, or the University may take other legal action as appropriate.

   Requesting Advances - Tutorial

10. The department completes a Disbursement Voucher and attaches the signed Operational Advance Promissory Note. Send the original Promissory Note and DV cover sheet to FSO-Operations.

11. Once processing is complete, the employee/department will be contacted by Accounts Payable.  Advance checks must be picked up in person and cannot be sent to the department.  At Accounts Payable, the employee will be asked to sign the Promissory Note if this has not already been done, and will receive:
    • The Advance Check,
    • A copy of the signed Promissory Note,
    • The Record of Operational Advance Expenditures,
    • Subject Pay Memo, and
    • Overseas Travel Memo.

    Settling Advances - Tutorial

12. The advance must be settled within thirty days of the conclusion of the time during which funds were needed. If the period in which the advance is used extends longer than sixty days, partial settlements should be made to report actual expenditures every thirty days, if possible and practical. If the advance is not cleared on a timely basis, (defined as 120 days by the Internal Revenue Service (IRS) following the conclusion of the time during which funds were needed (Treas. Reg. § 162-2)), the appropriate fund accountant will contact the holder of the delinquent advance.

    If the fund accountant cannot resolve the delinquent advance, within the 120 day limit stipulated by the IRS, the fund accountant will refer the advance to Payroll for deduction from the holder's pay check. If the person who is responsible for the operational advance leaves the University without accounting for the advance, Accounts Receivable - Bursar's Office will assume responsibility for collecting the advance, including any associated collection fees.

13. The person responsible for the advance completes the Record of Operational Advance Expenditures or an equivalent expense summary form, organizes, and attaches all original itemized receipts substantiating the expenditures in chronological order by type of expenditure then forwards to the appropriate departmental representative.

14. The department prepares a new Distribution of Income and Expense (DI) for the actual expenses incurred, attaches the Record of Operational Advance Expenditures and receipts, and forwards all to FSO-Operations. The DI should be crediting the original account object code 8310 and debiting the appropriate account(s) and object code(s) based on the type of expenditures..
    1. Documentation needed for:

       1. Expenditures: Supported in detail with the Record of Operational Advance Expenditures (or equivalent expense summary form) and original itemized receipts.

       2. Payments to individuals, for example, subject pay: Include each payee's name legibly written or typed, social security number and home address. If the subject is paid in cash instead of by check, the subject must sign to acknowledge receipt.

          NOTE: SSN and home addresses are not required for one-time subject payments of less than or equal to $50.

       3. Final settlement of the advance with a balance due back to the University:  Do not send cash.  Submit a check or money order made payable to the University of Arizona, from the individual who used the advance.  Make the deposit through the Bursar's Office using a Cash Receipt. 

maintained by: Mark McGurk
last reviewed: 04/09/2012