Cash Advance Program

Cash Advances Are Short-Term Loans Offered by the University to...

Eligible University-Employed Recipients Who...

• Have UT-based research funds, and
• A UT business-related need to receive those funds
• In advance of travel and/or survey and study programs
• Being conducted in direct connection with their UT-based research
  -- a mouthful, but - that's what it is!
   

Cash Advances are LOANS FROM UT - that are handled independently of whatever account will eventually cover the charges. This university loan program comes with strict oversight from the IRS which is why the process is often laborious and protracted.

What Cash Advances Are Not:

A flexible way to pay local research affiliates in foreign countries, without:

1. The responsible party being on location to oversee all activity
2. A detailed, signed payment receipt/form from all workers there on the ground
    
   • Federal law via IRS policy expressly disallows this type of flexibe activity specifically with cash advance programs, regardless of whatever level of integrity and good stewardship our researchers may repeatedly demonstrate with university funds.

 

University stakeholders are exploring ways to make paying consultants and covering costs associated with international research easier - stay tuned as this develops - we will get any updates out far and wide, of course.

• In the meantime, if you're experiencing issues, delays, problems with requests and reconciliations at any stage of cash advance request, please reach out to the Office of Research & Graduate Studies, specifically the Research Support Office so we can troubleshoot for improvements.
   
• Please keep the Office of Research and its Research Support Office in the loop as we navigate trying to improve this complicated process together.
  • We want to help our researchers in the field as much as we can while also making sure these requests aren't backlogging our Research Administrators.

The University's Cash Advance Process is Onerous. 

But this ain't a UT thang...
Our program looks just like every other university's cash advance program.

• We investigated cash advance programs on other university sites and found that they all link to the same federal policy that ours does, along with descriptions of similarly onerous processes.
   
  • In some cases, they were a little more stringent or limited, in others, cash advances are extremely limited, such as only up to $100 and no more. Some universities just flat out don't allow cash advances, likely it's not worth it for them to step through creating a compliant program as required by the IRS - and also likely means they aren't categorized 'R1: Doctoral Universities – Very high research activity,' as UT Austin is.
     
    • Add to that, none of them are nearly as big as we are, so it became apparent that a simplified, efficient cash advance program on the scale at which we operate is a tall order. --Tall, but not insurmountable (says the optimist).
      
      A random selection of other University Cash Advance Programs 
      • Yale University
      • University of North Carolina at Chapel Hill
      • University of California Los Angeles
      • Tulane University
      • University of Minnesota
      • Ohio State University
      • University of California San Francisco
      • University of Missouri

It's Easy to Blame These Requirements on UT

• It's worth noting that the university incurs considerable cost in maintaining the cash advance program, via staff retained to specialize in this area and resources needed to support it.
   
  • Not just within the Cash Advance Desk team, but also the Tax Office, where this program is administered since, at the heart of it, the cash advance program is a tax exempt consideration.
     
• The requirements are not something UT does to us by way of administrative overreach into activities; they are mandated by federal regulations to be as involved as they are.
   
• Suggestions for changes would need to be directed to the source of this policy. <-- seriously.

 

There are a lot of requirements (see next section) in order for UT to Remain a Qualified Institution with what the IRS calls an Accountable Plan.

• Without this Accountable Plan in place, ALL cash advance requests would be processed via the non-compliant route, which means ALL reimbursements would be categorized as taxable income and added to the traveler's annual W-2 without exception.
   
  • ​​​​​​​And to add insult to injury, we'd still have to jump through all the usual hoops to process the reconciliation - we just wouldn't get the benefit of a tax-exempt reimbursement.

Here are the characteristics about cash advance requests that we cannot change:

• Travel status required for recipient of travel cash advance
• Employment (non-student) status required
• A significantly detailed cash advance request form
• Detailed spending plan (for travel cash advances)
• Costing basis & IRB Protocol (for when there are survey and other participants)
• Approval routing via department, account holder, central college office, and university
• Lead time required by each and every level of approval (even if not addressed in published processes)
• 30 days or less cash advance distribution requirement
• 3 day in advance promissory note process & required recipient signature
  • See promissory note example here
• Itemized receipts & invoices from recipient for ALL expenses
• Service/worker payment receipts/forms (signed by workers/participants)
• 6 month max time frame per cash advance request
• 2 WEEK RECEIPT TURN-IN TIMEFRAME at conclusion of trip
• 60 day finalized reconciliation - mandatory IRS deadline
• 120 day excess funds payback requirement - mandatory IRS deadline
• Non-compliant reconciliation converts to taxable income - Per IRS

 

All of the above are required as part of the university's cash advance process in order for UT to remain a qualified institution with what the IRS calls an Accountable Plan.

Without this Accountable Plan in place, ALL cash advance requests would be processed via the non-compliant route, which means ALL reimbursements would be categorized as taxable income and added to the traveler's annual W-2 without exception.

• And to add insult to injury, we'd still have to jump through all the usual hoops to process the reconciliation - we just wouldn't get the benefit of a tax-exempt reimbursement.

Clear Communication of Responsibilities - Expectations
The Way Policy and Process are Accessed - Visibility
How the Process is Carried Out - Transparency
Full Disclosure of Routing and Approval Paths - Timing
A Means for Tracking Progress and Following Up - Accountability 

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