October 28th 2019 Compliance Team Talk Overview and Guidelines

Compliance Team Talk October 28th, 2019 Presented By: Caroline Kirkwood Compliance Manager Holly Moershel Compliance Auditor

2 Agenda Compliance Overview Review of Gift Cards Programs Pre-Approval Requirements Active program procedures Closing procedures Review of Petty Cash Funds

3 Financial Services Financial Services Office of Grants & Contracts Finance Office Bursars Office Compliance

Compliance Compliance is dedicated to delivering quality customer service, sustaining a friendly and professional work environment, and continuing to advance communication with the campus community. Compliance Responsibilities include: Assess risk areas at CU Denver, Anschutz Medical Campus and CU South Denver Conduct financial and operational reviews at the department or campus level Work to identify and create operational efficiencies Act as a resource on best practices Serve as the lead campus contact for the following functional areas: Events with Alcohol (on or off campus) Sponsorships/Donations to external organizations Petty Cash, Gift Card & Change Fund Requests Finance System Access Requests (PeopleSoft FIN, CU Marketplace, CU Data, CIW)

Gift Cards

6 Definition & Allowable Use Gift Cards are cash-like instruments used in lieu of cash or check Like cash, gift card handling must adhere to proper separation of duties and internal controls Only employees may be custodians No POIs or student workers Allowable use: Study Subject Compensation (up to $100) Employee Recognition (merit, length of service, safety, participation) Non Employee Participation/Recognition Door Prizes Awards Honoraria

7 Study Subject Compensation Gift Cards Surveys, clinical trials, and protocols COMIRB approval when required Limited to $100 or less per occurrence Tax reporting may be required Study Subject Payment Forms (SSP) SSP s must be used for: Payments > $100 Non U.S. Residents (non-resident aliens) https://www.cu.edu/psc/forms/study-subject-payment-ssp

8 Recognition & Awards Employee Recognition Merit, Safety, Length of Service, Participation HR Approved recognition program MUST be in place Taxable Recognition Reporting Form required & submitted to Employee Services Officer Approval Participation & Awards (Non-Employees) Door prizes, survey incentives, awards Tax reporting required from individuals receiving over $100 in calendar year

9 Tax Reporting Determined according to gift card use and dollar amount W-9 Collection is REQUIRED from individuals who receive greater than $100 in a calendar year (Jan 1 Dec 31) in the following instances: Study Subject Payments in full-board (invasive) protocols Non-employee Participation/Recognition 1099 MISC Spreadsheet is sent to the Procurement Service Center at the end of the year to report Financial Services will send reminder email with instructions before calendar year end

10 Prohibited Gift Cards may NOT be used to issue: Student Academic Awards (Financial Aid Office) Study Subject Payments over $100 Study Subject Payments to non U.S. Residents (non-resident aliens)

11 Gift Card Program Cycle Submit Form & Supporting Documentation to Answer any questions & wait for approval Complete Gift Card Authorization Request Form pcgc@ucdenver.edu from Finance Office (pcgc@ucdenver.edu) pcgc@ucdenver.edu pcgc@ucdenver.edu for processing Email Purchase Gift Cards (as needed to avoid a surplus inventory) Distribute gift cards, track distribution, reconcile program pcgc@ucdenver.edu pcgc@ucdenver.edu for any updates, and to close the program

12 Gift Card Authorization Request Form https://www.cu.edu/psc/policies/gift-card-authorization-request-gc

13 Supporting Documentation Internal Controls Documented Internal Controls are required at time of program set-up and must include the following: Custodian: Responsible for management of the gift card program Security: Gift Cards must be secured at all times (locked box, drawer, or cabinet) accessible only to the custodian Receipts/Issuance: Must be documented via tracking log and/or pre-numbered receipt book uniquely identifying each payment in order Audit Log: Log/Spreadsheet of purchases and distributions must be kept and tie receipts and purchases back for audit purposes. COMIRB Approval Required for Study Subject Payments HR Approved Recognition Program Required for recognition/participation programs where Employees receive gift cards in any dollar amount

14 After Approval Purchasing Cards Don t Over Purchase! Only amount of cards needed in short term (1-2 week period) Purchase with Procurement Card or PO in CU Marketplace Where to record the expense: 495102 Study Subjects 550105 Perf/Supporting Awards Non Cash Non Employee 550106 Non Cash Recognition Employees 550108 Non Cash Participation/Recognition Non Employee

15 Custody & Safeguarding Custody Custodian is responsible for ensuring all purchasing, security, dispensing, tracking, and replenishing procedures are followed If another individual must distribute cards a transfer memorandum should be completed to temporarily transfer the responsibility of custody. Safeguarding Gift Cards must be secured at all times (ie. In a locked box, inside a locked cabinet/drawer) and accessible only by the custodian Not combined with other items or gift card programs

16 Tracking Distribution Cards on hand & distribution should be documented in a tracking log or pre-numbered receipt book Information collected must include: Recipient Name or Study Subject ID Date Purchased Date Distributed Purpose of Payment Serial Number (or Order Number for electronic cards) Payment Amount Signature or Initials of recipient (or Email Address for electronic cards)

17 Reconciliation & Audit Reconciliation Custodian should reconcile gift card program each time new cards are purchased Department Approver should reconcile gift card program with the custodian on a quarterly basis Cards Distributed + Cards on Hand = # Purchased Audit Financial Services will periodically audit records related to gift cards. All gift card inventories and documentation must be available for audit.

18 Lost Cards Any shortage must be reported immediately to Compliance (pcgc@ucdenver.edu) Custodians are responsible for lost or stolen gift cards Finance Office will provide next steps

19 Changes to an Authorized Gift Card Program Changes to an authorization can include: Denominations Authorized Amount Speedtype Extension Location Custodian To update an authorization: Complete a blank Gift Card Authorization request form identifying the needed changes, have custodian & unit authorizer sign Send update request form, original approval, tracking logs, receipts from program, and updated internal controls to pcgc@ucdenver.edu for processing Address any questions and wait for approval before implementing the change

20 Closure When a gift card program is no longer active it should be closed. Provide the following documentation/information to pcgc@ucdenver.edu for a closure review: Gift Card Authorization documentation/updates Tracking Logs Purchase Receipts Number of remaining gift cards on hand

21 Extra Cards Gift Cards should be purchased as needed to avoid having extra cards on hand at the end of a program If you have extra cards: Notify Compliance (pcgc@ucdenver.edu) for guidance Expenses placed on restricted funding source (fund 30,31,34,35) need to be transferred to an unrestricted department speedtype See if vendor will allow a return Identify another active gift card program that could use the cards

Petty Cash Funds

23 Definition & Allowable Use Petty Cash Funds must ALWAYS have receipts for expenditures paid out of the fund and/or cash that total the authorized amount More restricted than gift cards due to increased risk should only be used in cases where SSP or Gift Cards would not be appropriate Only employees may be custodians No POIs or student workers Should not exceed 1 month s worth of payments Allowable use: Study Subject Compensation Survey Incentives

24 Prohibited Petty Cash Funds may NOT be used for the following: Alcoholic beverages for personal consumption Student awards Flowers, coffee, or other personal consumable items Study Subject Payments greater than $100 Study Subject Payments made to non-U.S. residents (non-resident aliens) Travel expenses (except parking/transportation services at a university site for non-employees) Payroll expenses Official functions Personal check cashing Purchases of items for re-sale (e.g., buying/selling stamps to organizational unit staff) Personal loans To open accounts at banks or other financial institutions Services (other than Study Subject Payments) Honoraria payments Purchasing cash equivalents (gift cards, money orders, etc.) without campus controller delegate approval Payments to other university organizational units Employee reimbursements Cannot be established using Agency Funds (Fund 80)

25 Similarities & Differences to Gift Cards Similarities: Can be audited by Finance at any time Safeguarding/Custody Tax Reporting requirements Differences: Set up requires strong rationale for use of Petty Cash instead of Gift Cards or SSP Form New funds will typically be reviewed within the first 6 months Cash requested through Payment Authorization Additional requirements and steps to manage fund Replenishment Process Receipts required

26 Replenishing the Fund The funds must be replenished as follows: At least once per quarter At the end of the fiscal year (June) Any time the designated custodian changes Any time a shortage is detected Receipts must be attached to the Payment Authorization for replenishment. The dollar amounts on the receipts must exactly match the dollar amounts requested for replenishment. Payment Authorization & Unreimbursed receipts should be submitted to the PSC for processing

27 Additional Resources & Questions The Finance Office has created a variety of How To Resource Guides accessible here (Compliance Website) Additional Petty Cash Fund, or Gift Card questions can be routed to the Compliance team at pcgc@ucdenver.edu Relevant Policies & Procedures: PSC Procedural Statement: Gift Cards PSC Procedural Statement: Study Subject Payments PSC Procedural Statement: Recognition & Training PSC Procedural Statement: Sensitive Expenses PSC Procedural Statement: Petty Cash & Change Funds