Cash Advance for Travel
Cash advances are funds paid directly to an individual prior to College approved travel. They are recorded as a loan to that individual until documentation substantiating their use is returned to Accounts Payable. All requests for advances must be submitted on the Cash Advance Payment Order.
Travel Advances can be obtained by:
1. Approval of the person responsible for the operating budget or account to which expenses will ultimately be charged
2. Approval from appropriate Senior Staff member
3. Submit payment order for Authorization well in advance of the travel.
IRS regulations require all travel expenses to adhere to an "Accountable Plan". In circumstances in which they do not, reimbursed amounts must be treated as taxable income to the employee. An "Accountable Plan" requires that expenses have a legitimate business purpose and be substantiated with sufficient records. Any amount in excess of the cash advance must be returned.
IRS regulations indicate the following safe harbor method for the substantiation or return of advanced amounts:
1. An Advance will be made no more than 30 days before expenses are incurred.
2. The employee must substantiate expenses no more than 60 days after the expense is incurred.
3. The employee must return all unsubstantiated amounts no more than 120 days after expenses are incurred. After 120 days, unsubstantiated amounts are to be treated as a taxable income to the individual.
*All advances not complete by fiscal year end (June 30th), should have any expenses prior to that date submitted to Accounts Payable no later than July 15th.
Within this timeframe the following guidelines apply:
1. All travel advances and requests for reimbursement must be submitted on a Travel and Entertainment Expense Form.
2. The statement must include the following:
a. The destination and business purpose of the trip.
b. The business relationship of persons entertained, if applicable.
c. Original receipts, particularly supporting all lodging expense.
d. The request must be approved by a Senior Staff member. Senior Staff requests for reimbursement require the approval of another member of the Senior Staff.
Please read Kenyon's Travel and Entertainment Expense Policy for further information. As discussed in the Remittance Procedures , the College requires all expenses to be properly documented in order to comply with IRS regulations.