200.7 Petty Cash Procedure

200.7 Petty Cash Procedure

Petty Cash Procedure
Procedure # 200.7
Rev.: 0
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison maintains a series of funds, including Petty Cash, to assist in situations where use of the accounts payable process or a University Purchasing Card is not appropriate. Petty Cash is used by departments for handling small purchases that cannot be effectively handled by a University Purchasing Card or check. Petty Cash is not common on campus and is generally set up for less than $100.


II. Who is affected by this Procedure

This policy applies to all Deans, Directors, Financial Officers and staff associated with Petty Cash.


III. Procedure

A. Opening Petty Cash

The following steps represent the overall process for opening Petty Cash:

  1. Custodian obtains the NR Number from the NR Number Generator. The NR Number from the NR Number Generator is required on some of the necessary forms for opening Petty Cash.
  2. Custodian composes a Letter of Justification explaining the purpose of the Petty Cash.
  3. Custodian completes the Custodian Fund Request Form and Custodian Fund Agreement Form.
  4. Custodian and Reconciler review and sign the Memorandum of Understanding (MOU) for Petty Cash.
  5. Custodian routes the Letter of Justification, Custodian Fund Request Form, Custodian Fund Agreement Form, and MOU for Petty Cash to the Dean/Director’s office.
  6. Dean/Director’s office reviews the documents and signs the necessary forms.
  7. Dean/Director’s office keeps a copy of the forms for internal records.
  8. Dean/Director’s office sends original forms via inter-d mail to the Cash Management Office.
  9. Cash Management processes the request.

B. Maintaining Petty Cash

The following steps represent the overall process of maintaining Petty Cash:

  1. Perform and document weekly reconciliations by reconciling to the authorized advanced level.
  2. Replenish Petty Cash at least every 90 days or sooner, based on activity.
  3. Notify the Dean/Director’s office and Cash Management when there is a change in Custodian and/or Reconciler and prepare applicable Custodian Fund forms.
  4. Respond to Cash Management’s annual review request.

C. Closing Petty Cash

The following steps represent the overall process of closing Petty Cash:

  1. Contact Cash Management via the Custodian Funds e-mail address (cstdnfnd@bussvc.wisc.edu).

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the petty cash.
  • Reconciler – UW-Madison employee who is responsible for performing and documenting weekly reconciliations.

V. Related References


VI. Revisions

Procedure Number

200.7

Date Approved

June 29, 2018

Revision Dates

200.6 Change Fund Procedure

200.6 Change Fund Procedure

Change Fund Procedure
Procedure # 200.6
Rev.: 0
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison maintains a series of Custodian Funds, including Change Funds. Change Funds are used by departments that oversee retail operations and cash registers, which require coin/currency handling.


II. Who is affected by this Procedure

This policy applies to all Deans, Directors, Financial Officers, and staff associated with Change Funds.


III. Procedure

A. Opening a Change Fund

The following steps represent the overall process for opening a Change Fund:

  1. Custodian obtains the NR Number from the NR Number Generator. The NR Number from the NR Number Generator is required on some of the necessary forms for opening a Change Fund.
  2. Custodian composes a Letter of Justification explaining the purpose of the change fund.
  3. Custodian completes the Custodian Fund Request Form and Custodian Fund Agreement Form.
  4. Custodian completes the Bank Deposit Slip Order Form for revenue.
  5. Custodian completes the Plastic Bank Bag Order Form.
  6. Custodian completes the following if a cash vault location is needed to order different currency for the Change Fund:
    1. Bank Account Website Access Form (US Bank SinglePoint)
  7. Custodian and Reconciler review and sign the Memorandum of Understanding (MOU) for Change Funds.
  8. Custodian routes the Letter of Justification and signed forms to the Dean/Director’s office.
  9. Dean/Director’s office reviews the documents and signs the necessary forms.
  10. Dean/Director’s office keeps a copy of the forms for internal records.
  11. Dean/Director’s office sends original forms via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  12. Cash Management processes the request.

B. Maintaining a Change Fund

The following steps represent the overall process of maintaining a Change Fund:

  1. Perform and document daily reconciliations by reconciling to the authorized advanced level.
  2. Follow the coin request procedures to replenish the Change Fund.
  3. Notify the Dean/Director’s office and Cash Management when there is a change in Custodian and/or Reconciler and prepare applicable Custodian Fund forms.
  4. Respond to Cash Management’s annual review request.

C. Closing a Change Fund

The following step represents the overall process of closing a Change Fund:

  1. Contact Cash Management via the Custodian Funds e-mail address (cstdnfnd@bussvc.wisc.edu).

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the Change Fund.
  • Reconciler – UW-Madison employee who is responsible for performing and documenting daily reconciliations.

V. Related References


VI. Revisions

Procedure Number

200.6

Date Approved

June 29, 2018

Revision Dates

200.5 Administrative Bank Account Procedure

200.5 Administrative Bank Account Procedure

Administrative Bank Account Procedure
Procedure # 200.5
Rev.: 1
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison maintains Administrative bank accounts for departments within the Division of Business Services. For example, UW-Madison’s main deposit bank account is considered an Administrative bank account.


II. Who is affected by this Procedure

This procedure applies to all Deans, Directors, Financial Officers, and staff associated with Administrative Bank Accounts.


III. Procedure

A. Opening an Administrative Bank Account

The following step represents the overall process of opening an Administrative Bank Account:

  1. Contact Cash Management via the Custodian Funds e-mail address (cstdnfnd@bussvc.wisc.edu) to discuss the process of setting up an Administrative Bank Account.
  2. The following forms will be required once the set up process is determined with Cash Management:
    1. Custodian Fund Request Form
    2. Custodian Fund Agreement Form
    3. New Bank Account Form
    4. Bank Account Website Access Form (US Bank SinglePoint) for Custodian and Reconciler.
    5. US Bank Authorized Signature Form obtained from Cash Management and signed by the signer of the account.
    6. MOU for Administrative Bank Account – Custodian
    7. MOU for Administrative Bank Account – Signer
    8. MOU for Administrative Bank Account – Reconciler

B. Maintaining an Administrative Bank Account

The following step represents the overall process of maintaining an Administrative Bank Account:

  1. Reconciler completes and documents monthly bank reconciliations.

C. Closing an Administrative Bank Account

The following step represents the overall process of closing an Administrative Bank Account:

  1. Contact Cash Management via the Custodian Funds e-mail address (cstdnfnd@bussvc.wisc.edu).

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the administrative bank account.
  • Signer – UW-Madison employee responsible for ensuring all disbursements are logged and accounted for.
  • Reconciler – UW-Madison employee who is responsible for performing and documenting monthly reconciliations.

V. Related References


VI. Revisions

Procedure Number

200.5

Date Approved

June 29, 2018

Revision Dates

August 2, 2018 – Removed requirement to obtain NR number.

200.4 Transaction Balance Account Procedure

200.4 Transaction Balance Account Procedure

Transaction Balance Account (TBA) Procedure
Procedure # 200.4
Rev.: 1
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison maintains Transaction Balance Account (TBA) bank accounts for campus departments with a large volume of deposits. Thus, a TBA is a deposit bank account used for tracking a specific department’s deposits. The total daily deposit amount for a TBA is transferred to the UW-Madison’s main deposit account at the end of each day.


II. Who is affected by this Procedure

This procedure applies to all Deans, Directors, Financial Officers, and staff associated with Transaction Balance Accounts.


III. Procedure

A. Opening Transaction Balance Account

The following steps represent the overall process of opening a TBA:

  1. Custodian composes a Letter of Justification explaining the purpose of the account.
  2. Custodian completes the following forms and obtains the necessary departmental approvals:
    1. Custodian Fund Request Form
    2. Custodian Fund Agreement Form
    3. Bank Deposit Slip Order Form
    4. New Bank Account Form
    5. Bank Account Website Access Form (US Bank SinglePoint)
  3. Custodian e-mails the Cash Management Office (cstdnfnd@bussvc.wisc.edu) to obtain a US Bank Authorized Signature Form.
  4. Custodian signs the US Bank Authorized Signature Form.
  5. Custodian and Reconciler review and sign the Memorandum of Understanding (MOU) for TBA bank accounts.
  6. Custodian routes the Letter of Justification and all signed forms to the Dean/Director’s office.
  7. Dean/Director’s office reviews the documents and signs the necessary forms.
  8. Dean/Director’s office keeps a copy of the forms for internal records.
  9. Dean/Director’s office sends the original forms via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  10. Cash Management processes the opening request.
  11. Cash Management will notify the department when the US Bank TBA is set up.

B. Maintaining Transaction Balance Account

The following step represents the overall process of maintaining a TBA:

  1. Reconciler completes and documents monthly bank reconciliations.

C. Closing Transaction Balance Account

The following step represents the overall process of closing a TBA:

  1. Contact Cash Management via the Custodian Funds e-mail address (cstdnfnd@bussvc.wisc.edu).

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the transaction balance account.
  • Reconciler – UW-Madison employee who is responsible for performing and documenting monthly reconciliations.

V. Related Reference


VI. Revisions

Procedure Number

200.4

Date Approved

June 29, 2018

Revision Dates

August 2, 2018 – Removed requirement of Custodian to obtain NR Number.

200.3 Contingent Checking Account Procedure

200.3 Contingent Fund Procedure

Contingent Checking Account Procedure
Procedure # 200.3
Rev.: 0
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison maintains a series of funds, including Contingent Checking Accounts, to assist in situations where use of the accounts payable process or a University Purchasing Card is not appropriate. Contingent Checking Accounts are used to pay authorized vendors by check when the purchasing card cannot be used and when the accounts payable process is not an option.


II. Who is affected by this Procedure

This procedure applies to all Deans, Directors, Financial Officers, and staff associated with Contingent Checking Accounts.


III. Procedure

A. Opening Contingent Checking Account

The following steps represent the overall process for opening a Contingent Checking Account:

  1. Custodian obtains the NR Number from the NR Number Generator. The NR Number from the NR Number Generator is required on some of the necessary forms for opening a Contingent Checking Account.
  2. Custodian composes a Letter of Justification explaining the purpose of the study and how it is linked to the project.
  3. Custodian completes the following forms and obtains the necessary departmental approvals:
    1. Custodian Fund Request Form
    2. Custodian Fund Agreement Form
    3. Custodian Fund Budget Form
    4. New Bank Account Form
    5. Check Order Form
    6. Bank Account Website Access Form (US Bank SinglePoint)
  4. Custodian e-mails the Cash Management Office (cstdnfnd@bussvc.wisc.edu) to obtain a US Bank Authorized Signature Form. Custodian then provides the Signers with the US Bank Authorized Signature Form.
  5. Signers sign the US Bank Authorized Signature Form and provides it to the Custodian.
  6. Custodian reviews and signs the Memorandum of Understanding (MOU) for Contingent Funds – Custodian.
  7. Signers review and sign the MOU for Contingent Funds – Signer and provides it to the Custodian.
  8. Reconciler reviews and signs the MOU for Contingent Funds – Reconciler and provides it to the Custodian.
  9. Custodian routes the Letter of Justification and signed forms to the Dean/Director’s office.
  10. Dean/Director’s office reviews the documents and signs the necessary forms.
  11. Dean/Director’s office keeps a copy of the forms for internal records.
  12. Dean/Director’s office sends the original via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  13. Cash Management processes the opening request.
  14. Cash Management will notify the department when the US Bank checking account is set up and funds are deposited.
  15. The Custodian can check WISDM using account code 6167, on the balance sheet, to see if the request has been processed.

B. Maintaining Contingent Checking Account

The following steps represent the overall process for maintaining a Contingent Checking Account:

  1. Reconciliations
    1. Reconciler completes and documents monthly bank reconciliations between the US Bank SinglePoint bank statement and the check register on the Bank Reconciliation Worksheet within 30 days of month end.
    2. Reconciler submits the monthly bank reconciliation and check register to Cash Management via the Custodian Funds System and their Business Office within 30 days of month end.
  2. Replenishments
    1. Reconciler obtains the expense log, invoices, and completes the Custodian Fund Accounting Form to replenish the Contingent Checking Account at least every 90 days, based on activity.
    2. Reconciler obtains necessary departmental approvals for the Custodian Fund Accounting Form.
    3. Custodian routes the completed/signed Custodian Fund Accounting Form, expense log, and invoices to the Dean/Director’s office for review and approval.
    4. Dean/Director’s office reviews the documents and signs the Custodian Fund Accounting Form.
    5. Dean/Director’s office keeps a copy of the forms for internal records.
    6. Dean/Director’s office sends the original forms via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu) for processing.
    7. Cash Management processes the replenishment request.
  3. Other
    1. Any errors on the bank account are to be reported by the Reconciler within 30 days of month end to Cash Management via e-mail to cstdnfnd@bussvc.wisc.edu and your units’ Business Office.
    2. Reconciler is to ensure stop payments are placed for 24 months on all checks older than 90 days old by using US Bank SinglePoint.
    3. Respond to Cash Management’s periodic review request.

C. Closing Contingent Checking Account

The following steps represent the overall process for closing a Contingent Checking Account:

  1. Custodian completes the Custodian Fund Accounting Form and obtains the expense log.
  2. Custodian obtains the necessary departmental approvals for the Custodian Fund Accounting Form.
  3. The remaining checks are shredded by two individuals and the Check Shred Confirmation statement is signed by both individuals.
  4. Custodian routes the completed/signed Custodian Fund Accounting Form, expense log, and check shred confirmation to the Dean/Director’s office.
  5. Dean/Director’s office reviews documents and signs the Custodian Fund Accounting Form.
  6. Dean/Director’s office keeps a copy of the forms for internal records.
  7. Dean/Director’s office sends the original forms via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  8. Cash Management processes the closing request.

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the bank account activity.
  • Signer – UW-Madison employee responsible for writing and signing checks to the appropriate recipient and responsible for ensuring all checks are logged and accounted for.
  • Reconciler – UW-Madison employee who is responsible for performing and submitting monthly reconciliations.

V. Related References


Procedure Number

200.3

Date Approved

June 29, 2018

Revision Dates

200.2 Temporary Fund Procedure

200.2 Temporary Fund Procedure

Temporary Fund Procedure
Procedure # 200.2
Rev.: 0
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison conducts research studies that are less than 1 year and the research participants are compensated with payment by cash or gift cards. Temporary Funds are used when the research participant study will be for less than 1 year. Thus, it is not feasible to set up a UW-Madison checking account.


II. Who is affected by this Procedure

This procedure applies to all Deans, Directors, Financial Officers, and staff involved with research participant studies that provide payments by cash or gift card to research participants.


III. Procedure

A. Opening a Temporary Fund

The following steps represent the overall process for opening a Temporary Fund:

  1. Custodian obtains the NR Number from the NR Number Generator. The NR Number from the NR Number Generator is required on some of the necessary forms for opening a Temporary Fund.
  2. Custodian completes the following forms and obtains the necessary departmental approvals:
    1. Custodian Fund Request Form, including the justification on the form explaining the purpose of the study and how it is linked to the project.
    2. Custodian Fund Budget Form
    3. Custodian Fund Agreement Form
  3. If 133 or 144 funds will be used to purchase gift cards, the Custodian or Dean/Director’s office needs to obtain written approval from Research and Sponsored Programs (RSP).
  4. Custodian routes the signed forms and if applicable written approval from RSP to purchase gift cards and/or the exempt self-certification paperwork from the Institutional Review Board (IRB) to the Dean/Director’s office.
  5. Dean/Director’s office verifies that the Custodian needs a Temporary Fund by verifying that:
    1. The research study will be for less than 1 year.
    2. The research study has an IRB Number or self-certification paperwork showing that no IRB approval or certification is necessary.
    3. Each payment to a research participant will be $249 or less.
    4. The payment to each research participant is by cash or gift cards.
  6. Dean/Director’s office verifies accurate funding information.
  7. Dean/Director’s office reviews the documentation and signs the necessary forms.
  8. Dean/Director’s office keeps a copy of the forms for internal records.
  9. Dean/Director’s office sends the original forms via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  10. Cash Management processes the request. Custodian Fund Requests will be processed no sooner than 15 business days before the beginning date indicated on the Custodian Fund Request Form. Accounting Services will either mail a check to the address indicated on the Custodian Fund Request Form or the check will be available for pick-up. See Policy 106 on check distribution for more information.

NOTE: Once Cash Management receives the request, it takes 7 to 15 business days for a request to route through the system before a check is issued.

B. Maintaining a Temporary Fund
The following steps represent the overall process of maintaining a Temporary Fund:

  1. Maintain a research participant log.
  2. Maintain security of cash and/or gift cards.

C. Closing a Temporary Fund
The following steps represent the overall process for closing a Temporary Fund:

  1. Custodian completes the Custodian Fund Accounting Form and obtains the research participant log.
  2. Custodian obtains the necessary departmental approvals for the Custodian Fund Accounting Form.
  3. If the full amount of the Temporary Fund is not used, the Custodian writes a personal check to the University of Wisconsin – Madison for the remainder of the Temporary Fund that was not distributed to research participants.
  4. Custodian routes the completed/signed Custodian Fund Accounting Form, research participant log, and if necessary the personal check to the Dean/Director’s office.
  5. Dean/Director’s office reviews the documents and signs the Custodian Fund Accounting Form.
  6. Dean/Director’s office keeps a copy of the documents for internal records.
  7. Dean/Director’s office sends the original documents and if necessary a personal check from the Custodian to the Cash Management Office. Ensure the personal check is restrictively endorsed “For Deposit Only” on the back of the check.
  8. Cash Management processes the closing request.

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the cash advance for research participant studies.

V. Related References


VI. Revisions

Procedure Number

200.2

Date Approved

June 29, 2018

Revision Dates

200.1 Replenishable Checking Account Procedure

200.1 Replenishable Checking Account Procedure

Replenishable Checking Account Procedure
Procedure # 200.1
Rev.: 0
Effective Date: June 29, 2018

Related Policy: 200: Custodian Funds Policy
Functional Owner: Cash Management, Business Services
Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Contents

I. Procedure Statement
II. Who is Affected by this Procedure
III. Procedure
IV. Definitions
V. Related References
VI. Revisions


I. Procedure Statement

The University of Wisconsin-Madison conducts research studies that are 1 year or longer and the research participants are compensated with payment by check. Replenishable Bank Accounts are used for these research participant studies.


II. Who is affected by this Procedure

This procedure applies to all Deans, Directors, Financial Officers, and staff involved with research participant studies that provide payments by check to research participants.


III. Procedure

A. Opening Replenishable Checking Account

The following steps represent the overall process for opening a Replenishable Checking Account:

  1. Custodian obtains the NR Number from the NR Number Generator. The NR Number from the NR Number Generator is required on some of the necessary forms for opening a Replenishable Checking Account.
  2. Custodian composes a Letter of Justification explaining the purpose of the study and how it is linked to the project.
  3. Custodian completes the following forms and obtains the necessary departmental approvals:
    1. Custodian Fund Request Form
    2. Custodian Fund Agreement Form
    3. Custodian Fund Budget Form
    4. New Bank Account Form
    5. Check Order Form
    6. Bank Account Website Access Form (US Bank SinglePoint)
  4. Custodian e-mails the Cash Management Office (cstdnfnd@bussvc.wisc.edu) to obtain a US Bank Authorized Signature Form. Custodian then provides the Signers with the US Bank Authorized Signature Form.
  5. Signers sign the US Bank Authorized Signature Form and provides it to the Custodian.
  6. Custodian reviews and signs the Memorandum of Understanding (MOU) for Replenishable Checking Account – Custodian.
  7. Signers review and sign the MOU for Replenishable Checking Account – Signer and provides it to the Custodian.
  8. Reconciler reviews and signs the MOU for Replenishable Checking Account – Reconciler and provides it to the Custodian.
  9. Custodian routes the Letter of Justification and signed forms to the Dean/Director’s office.
  10. Dean/Director’s office verifies that the Custodian needs a Replenishable Checking Account by verifying that:
    1. The research study will be for 1 year or longer.
    2. The research study has an Institutional Review Board (IRB) Number or self-certification paperwork showing that no IRB approval or certification is necessary.
    3. Each payment to a research participant will be $249 or less.
    4. The payment(s) to the research participants will be made by check.
    5. At least 10 checks will be written per month.
  11. Dean/Director’s office verifies accurate funding information.
  12. Dean/Director’s office reviews the documentation and signs the necessary forms.
  13. Dean/Director’s office keeps a copy of the forms for internal records.
  14. Dean/Director’s office sends the original forms to via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  15. Cash Management processes the request.
  16. Cash Management will notify the department and Dean/Director’s office when the US Bank checking account is set up and checks are ordered.
  17. The Custodian can check WISDM using account code 6167, on the balance sheet, to see if the request has been processed. On the Transaction Search page in WISDM, ensure the Show Balance Account checkbox is checked.

B. Maintaining Replenishable Checking Account

The following steps represent the overall process of maintaining a Replenishable Checking Account:

  1. Reconciliations
    1. Reconciler completes and documents monthly bank reconciliations between the US Bank SinglePoint bank statement and the check register on the Bank Reconciliation Worksheet within 30 days of month end.
    2. Reconciler submits the monthly bank reconciliation and check register, and all supporting documentation via the Custodian Fund System and their Dean’s/Business Office within 30 days of month end.
  2. Replenishments
    1. Reconciler obtains the research participant log, without HIPAA or sensitive information, and completes the Custodian Fund Accounting Form to replenish the Replenishable Checking Account at least every 90 days, based on activity.
    2. Reconciler obtains necessary departmental approvals for the Custodian Fund Accounting Form.
    3. Custodian routes the completed/signed Custodian Fund Accounting Form, along with the research participant log, reconciliation(s), bank statement(s), list of outstanding check(s), and stop payment report from US Bank SinglePoint to the Dean/Director’s office for review and approval.
    4. Dean/Director’s office reviews the documents and signs the Custodian Fund Accounting Form.
    5. Department keeps a copy of the forms for internal records. Department is the official record holder.
    6. Dean/Director’s office sends the original forms via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
    7. Cash Management processes the replenishment request.
  3. Other
    1. Any errors on the bank account are to be reported by the Reconciler via e-mail to Cash Management (cstdnfnd@bussvc.wisc.edu) and their Dean’s/Business Office within 30 days of month end.
    2. Reconciler is to ensure stop payments are placed for 24 months on all checks older than 90 days old by using US Bank SinglePoint.
    3. Notify the Dean/Director’s office and Cash Management when there is a change in Custodian, Reconciler, and/or Signers and prepare applicable Custodian Fund forms.
    4. Respond to Cash Management’s periodic review request.

C. Closing Replenishable Checking Account

The following steps represent the overall process of closing a Replenishable Checking Account:

  1. Custodian completes the Custodian Fund Accounting Form and obtains the research participant log.
  2. Custodian obtains the necessary departmental approvals for the Custodian Fund Accounting Form.
  3. The remaining checks are shredded by two individuals and the Check Shred Confirmation statement is signed by both individuals and provided to the Custodian.
  4. Custodian routes the completed/signed Custodian Fund Accounting Form, research participant log, and check shred confirmation to the Dean/Director’s office.
  5. Dean/Director’s office reviews the documents and signs the Custodian Fund Accounting Form.
  6. Dean/Director’s office keeps a copy of the documents for internal records.
  7. Dean/Director’s office sends the original documents via inter-d mail or e-mail to the Cash Management Office (cstdnfnd@bussvc.wisc.edu).
  8. Cash Management processes the closing request.

IV. Definitions

  • Custodian – UW-Madison employee who is responsible for monitoring the cash advance for research participant studies.
  • Signer – UW-Madison employee responsible for writing and signing checks to the appropriate recipient and responsible for ensuring all checks are logged and accounted for.
  • Reconciler – UW-Madison employee who is responsible for performing and submitting monthly reconciliations.

V. Related References


VI. Revisions

Procedure Number

200.1

Date Approved

June 29, 2018

Revision Dates

 

 

 

200 Custodian Funds Policy

200 Custodian Funds Policy

UW-Madison Administrative Policy
Policy # 200
Custodian Funds Policy

Effective Date: June 29, 2018
Last Updated: September 12, 2018
Last Reviewed: September 12, 2018
Next Review: TBD

Functional Owner: Cash Management, Business Services
Executive Sponsor: Asst. Vice Chancellor for Business Services
Policy Contact: Custodian Funds Mailbox: cstdnfnd@bussvc.wisc.edu


Policy Summary

UW-Madison often conducts research studies that include research participants. This policy applies to the methods of compensation to study participants when compensation is offered in recognition of their willingness to participate in the research study. Research conducted involving research participants is overseen by UW-Madison’s Institutional Review Board (IRB). Its purpose is to facilitate human subjects research and to ensure the rights and welfare of human subjects are protected during their participation. All plans to compensate research participants in research studies must receive prior approval or an exemption from the IRB. Options for payment include check, cash, or gift cards via Custodian Funds. Payments to research participants are to be processed using either one of the following Custodian Funds:

A. Replenishable Account, which is used when the research participant study will be for 1 year or longer and payment to research participants will be by check.

B. Temporary Fund, which is used to pay research participants by cash or gift cards when a research study will be for less than 1 year. Thus, it is not feasible to set up a UW-Madison checking account.

In addition, UW-Madison maintains the following custodian funds for business process purposes:

C. Contingent Checking Accounts are used to pay authorized vendors by check when the purchasing card cannot be used and when the accounts payable process is not an option.

D. Transaction Balance Accounts (TBA) are deposit bank accounts for tracking specific department deposits. The deposits are transferred to UW-Madison’s main deposit account at the end of each day.

E. Administrative Bank Accounts are used by departments within the Division of Business Services.

F. Change Funds are used by departments that operate retail operations and cash registers, which require coin/currency handling.

G. Petty Cash is used by departments for handling small purchases that cannot be effectively handled by a University Purchasing Card or check.


Policy Application

This policy applies to all Deans, Directors, Financial Officers, and staff associated with custodian funds.


Rationale

Research relies on volunteers to participate in studies. It is not uncommon for a researcher to reimburse research participants for participation in a study. Some studies may also offer compensation as a means to attract volunteers.


Policy Detail

For all types of Custodian Funds, there is a required in-person training session for all individuals to attend that are involved with the management and control of Custodian Funds. The information for this in-person training session is available on Accounting Services Training webpage (https://businessservices.wisc.edu/about/training/). After the training session is completed, a certificate of completion is obtained by correctly answering multiple-choice questions. An annual online refresher training is required.

The following includes the policy details for each type of Custodian Fund:

A. Replenishable Checking Accounts are used to pay research subjects by check when a research study will be for 1 year or longer.

  1. Custodian, Signers, and Reconciler are UW-Madison employees.
  2. There is no conflict of interest and no related parties between Custodian, Signers, and Reconciler.
  3. All research participant studies are to be approved or an exemption formally documented and provided by the Institutional Review Board (IRB).
  4. Family Educational Rights and Privacy Act (FERPA), Health Insurance Portability and Accountability Act (HIPAA), IRB, and all other UW policies are followed.
  5. All payments of $250 or more are to be completed through the Payment to Individual Report (PIR) process with Accounts Payable and supported with a completed and signed W-9 form.
  6. There will be a minimum of two and a maximum of four signers authorized to sign checks.
  7. At least 10 checks will be written per month.
  8. Replenishments are based on checks written. All checks are to be written out directly to the appropriate recipient in accordance with the purposes of the account and in chronological order. Payments will not include travel, meals, or hotel. See Expense Reimbursement procedures.
  9. Cash will not be advanced out of the checking account.
  10. Personal funds will not be used to maintain the checking account balance.
  11. Checking account is to maintain a positive balance.
  12. Monthly bank reconciliations are to be completed, documented, and sent to Cash Management and the Dean’s/Business Office within 30 days of month end.
  13. Any errors on the bank account are to be reported within 30 days of month end.
  14. Replenishments are to be done at least every 90 days, based on activity.
  15. Stop payments for 24 months are to be placed on all checks older than 90 days old.
  16. Tax reporting is to be completed for payments that are $600 or more in total to research participants that participate in one or more UW-Madison research study in a calendar year.
  17. Replenishable Checking Accounts will be reviewed periodically by Cash Management.
  18. The procedures for opening, maintaining, and closing a Replenishable Checking Account are in Procedure 200.1: Replenishable Checking Accounts.

B. Temporary Funds are used to pay research participants by cash or gift cards when a research study will be for less than 1 year. Thus, it is not feasible to set up a UW-Madison checking account.

  1. Temporary Custodian Funds are open for 3 months or less, at a time.
    1. Note that if cash or gift cards are needed to pay research participants studies beyond 3 months and less than 1 year, then a Temporary Custodian Fund needs to be opened for 3 months and then closed after the 3 months. Then another Temporary Custodian Fund would need to be opened for an additional 3 months or less, depending on the needs of the research study.
  2. Custodian is a UW-Madison employee.
  3. The individual(s) giving the cash or gift cards to the research participants is a UW-Madison employee.
  4. All research participant studies are to be approved or an exemption formally documented and provided by the Institutional Review Board (IRB).
  5. All payments of $250 or more are to be completed through the Payment to Individual Report (PIR) process with Accounts Payable and supported with a completed and signed W-9 form.
  6. The documentation for closing a Temporary Fund is due to Cash Management within 30 days of the end of the Temporary Fund.
  7. Past Due Notices are sent by Cash Management if the closing documentation is not received by Cash Management within the 30-day deadline.
  8. GPR funds will be charged if closing documentation is not received.
  9. The procedures for opening, maintaining, and closing a Temporary Fund are in Procedure 200.2: Temporary Funds.

C. Contingent Checking Accounts are used to pay authorized vendors by check when the purchasing card cannot be used and when the accounts payable process is not an option.

  1. Contingent Checking Accounts are opened for 1 year or longer.
  2. Custodian, Signers, and Reconciler are UW-Madison employees.
  3. There is no conflict of interest and no related parties between Custodian, Signers, and Reconciler.
  4. Family Educational Rights and Privacy Act (FERPA), Health Insurance Portability and Accountability Act (HIPAA), Institutional Review Board (IRB), and all other UW policies are followed.
  5. Individual check payments may not exceed $5,000.00 per UW Madison Purchasing policies.
  6. There will be a minimum of two and a maximum of four signers authorized to sign checks.
  7. Replenishments are based on checks written. All checks are to be written out directly to the appropriate recipient in accordance with the purposes of the account and in chronological order. Payments will not include travel, meals, or hotel. See Expense Reimbursement procedures.
  8. Cash will not be advanced out of the checking account.
  9. Personal funds will not be used to maintain the checking account balance.
  10. Checking account is to maintain a positive bank balance
  11. Monthly bank reconciliations are to be completed, documented, and sent to Cash Management and the Dean’s/Business Office within 30 days of month end.
  12. Any errors on the bank account are to be reported within 30 days of month end.
  13. Replenishments are to be done at least every 90 days, based on activity.
  14. Stop payments for 24 months are to be placed on all checks older than 90 days old.
  15. Contingent Checking Accounts will be reviewed periodically by Cash Management.
  16. The procedures for opening, maintaining, and closing a Contingent Checking Account are in Procedure 200.3: Contingent Funds.

D. Transaction Balance Accounts (TBA) are deposit bank accounts for tracking specific department deposits. The deposits are transferred to UW-Madison’s main deposit account at the end of each day.

  1. The procedures for opening, maintaining, and closing a TBA are in Procedure 200.4: Transaction Balance Accounts.
  2. Custodian and Reconciler are UW-Madison employees.
  3. There is no conflict of interest and no related parties between Custodian and Reconciler.
  4. Cash will not be advanced out of the bank account.
  5. Personal funds will not be used to maintain the bank account balance.

E. Administrative Bank Accounts are used by departments within Business Services.

  1. The procedures for opening, maintaining, and closing an Administrative Bank Account are in Procedure 200.5: Administrative Bank Accounts.
  2. Custodian, Signers, and Reconciler are UW-Madison employees.
  3. There is no conflict of interest and no related parties between Custodian, Signers, and Reconciler.
  4. Cash will not be advanced out of the bank account.
  5. Personal funds will not be used to maintain the bank account balance.

F. Change Funds are used by departments that operate retail operations and cash registers which require coin/currency handling.

  1. Change Funds are used for point of sale/retail operations.
  2. Change Funds are for the period of time needed for the point of sale operation to manage currency and its change.
  3. The Change Fund will not be used as Petty Cash. Change Fund cash will not be used to purchase product/food/expenditures needed for the point of sale operation.
  4. Cash will not be advanced out of the Change Fund.
  5. Personal funds will not be used to maintain the Change Fund.
  6. Refunds will not be issued from the Change Fund.
  7. Custodian must be a UW-Madison employee.
  8. Daily reconciliations of the Change Fund will be performed and documented.
  9. Coin request procedure will be followed to replenish change for point of sale/retail operations.
  10. Change Funds will be reviewed yearly by Cash Management.
  11. The procedures for opening, maintaining, and closing a Change Fund are in Procedure 200.6: Change Funds.

G. Petty Cash is used by departments for handling small purchases that cannot be effectively handled by a University Purchasing Card or check. Petty Cash is generally set up for less than $100.

  1. Cash will not be advanced from Petty Cash.
  2. Personal funds will not be used to maintain Petty Cash.
  3. Custodian must be a UW-Madison employee.
  4. Weekly reconciliations of the Petty Cash will be performed and documented.
  5. Replenishments of the Petty Cash are to be done at least every 90 days, based on activity.
  6. Refunds will not be issued from Petty Cash.
  7. Petty Cash Funds will be reviewed yearly by Cash Management.
  8. The procedures for opening, maintaining, and closing Petty Cash are in Procedure 200.7: Petty Cash.

Consequences for Non-Compliance

Employees will not be reimbursed if research participant payments to study participants are paid using a Personal Credit Card or personal funds. Employees would have to reimburse the University if research participant payments to study participants are paid using a Purchasing Card (P Card) or University Personal Liability Credit Card (Corporate Card).

Improper or fraudulent use of any amounts may result in disciplinary action up to and including termination of employment.


Supporting Tools


Definitions

  • Custodian Funds – Funds or accounts set up to serve the various cash related needs of UW-Madison, such as paying research participants or business processes.

General Responsibilities

Cash Management Office: Responsible for oversight of Custodian Funds and processing requests for opening, maintaining, and closing Custodian Funds.

Dean/Director’s Office: Provides signature as approval for Custodian Fund activities, such as opening, maintaining, and/or closing Custodian Funds. Also, helps with the oversight of their Custodian Funds.

Campus Department: Provides signature as approval for Custodian Fund activities, such as opening, maintaining, and/or closing Custodian Funds. Also, helps with the oversight of their Custodian Funds.


Links to Related Policies