INCENTIVE GIFT CARDS POLICY – DRAFT
Incentive gift cards may be used as a tool to meet the business purposes of the University. Normally, Incentive gift cards can be used to support research study participants and for awards or prizes to support student activities. As cash-equivalent instruments, incentive gift cards are governed by internal control requirements and may be subject to tax reporting. These requirements must be followed and communicated to those involved before purchase or distribution of any incentive gift cards. When incentive gift cards are distributed, they must be distributed in accordance with the guidelines set forth in this policy.
This policy applies to all University personnel and includes incentive gift cards funded by any source of funds where payments will be made by the University to include a grant or research contract, self-generated, or any other procurement exempt funds. Incentive gift cards are treated as cash and any misuse will be handled as misuse of University cash in accordance with policy. The portions of the policy related to tax reporting are also applicable to distributions of any gifts and awards of non-cash tangible items with a fair market value greater than $50, if funded by the University.
III. Allowable Uses and Limits
Incentive gift cards may only be distributed for the following purposes:
Incentive gift cards cannot be used as a bonus, awards, honoraria, or other means of compensation to employees. Such payments must be processed through the payroll system. If there is any question about a particular situation, please consult with Human Resources
IV. Internal Controls
Incentive gift cards must be safeguarded at all times and accounted for as if they were cash. The Responsible Employee has primary responsibility for safekeeping, maintenance and proper usage of the incentive gift cards and for advising faculty, staff or students who handle the cards that they must follow this policy. For grants, the PI must maintain all records regarding the Research participants. The following controls are required at a minimum:
The Responsible Employee holds custody over the cards and should always know where they are located. Custody may be transferred temporarily from the Responsible Employee to other departmental personnel for disbursement purposes, but the Responsible Employee still holds primary responsibility for the safekeeping of the cards
B. Physical Access
Incentive gift cards must be secured at all times (e.g. in a locked box in a locked cabinet or drawer) with limited access. Incentive gift cards should not be taken home or off campus for safekeeping.
Gift card disbursements must be documented on the appropriate distribution log, designed to uniquely identify each payment in order to document the use of the card for audit and tax purposes. Because of IRS requirements, a recipient cannot receive the incentive gift cards if he or she refuses to provide the requested information. If the Responsible Employee disburses the card without obtaining this information, he or she may be personally responsible for funding the gift card purchase. Due to the nature of the data collected on the Research Subject Incentive Distribution Log, the Log must be treated as confidential information.
Departments holding more than one gift card must perform a physical inventory at least on a weekly basis, with the results reconciled to the current distribution log. The inventory should be performed by someone other than the Responsible Employee but in the presence of the Responsible Employee. Any discrepancies must be reported immediately to Cash and Treasury.
V. Tax Reporting
The giving of awards or incentive gift cards may create a tax liability for the recipient. For the purpose of this policy, the University considers incentive gift cards with a face value of $50 or less to be de minimis and no tax reporting will be required on the issuance of a single gift card. This does not release the issuing department from tracking and maintaining reports on the recipients of the cards. For University employees who receive incentive gift cards over $50 either on a single or cumulative basis during a single calendar year, the total value of the card(s) will be reported as income to the recipient. (note – this may not apply if the employee is participating in research dissimilar to their normal job functions). For students, who receive incentive gift cards over $600 on a single or cumulative basis during a single calendar year, the total of the cards will be reported to the IRS via Form 1099. In any case, records of recipient information are necessary and required for expenditure justification.
VI. Lost Cards
The Responsible Employee will be held responsible for any incentive gift cards in their possession that are lost or misplaced. Any shortage must be reported immediately to Internal Audit.
Internal Audit may investigate the circumstances surrounding the loss. If the investigation findings demonstrate the Responsible Employee did not use adequate internal controls, as defined by this policy, he or she cannot be the Responsible Employee for any future gift card disbursements and may be asked to reimburse the shortfall with personal funds.
If the investigation indicates there might have been an intentional misappropriation of the incentive gift cards, Internal Audit will turn over to proper individuals to determine the appropriate next steps. Consequences may include termination of employment and referral of the matter to a law enforcement agency.
A. Incentive Gift Card means a stored-value or similar instrument issued in lieu of cash or check. For purposes of this policy, “incentive gift card” includes gift certificates, cash cards, and online eIncentive gift cards (eCards).
B. Responsible Employee means the faculty or staff member in the department disbursing the incentive gift cards that is responsible for the documentation, internal control and other requirements of this policy. For sponsored projects, the Principal Investigator (PI) is the Responsible Employee and cannot delegate this role.
C. Research Participant means an individual with whom an investigator conducts research and obtains data through intervention or interaction with the individual.