Section: GENERAL ACCOUNTING
|Section 3000 Policies|
Policy Number: 3103.05
Policy Title: Advances, Deposits and Prepayments
Policy Effective Date: January 1, 2012
Last Revision Date: October 6, 2011
(see revision history)
It is the policy of the CSU to authorize advance payments, deposits and prepayments for goods and services when these methods are more cost effective than the normal method of payment in arrears. Campuses must develop written procedures that implement this policy.
Campuses must define conditions and evaluation methods to determine when advances, deposits, and prepayments are deemed appropriate.
All prepayments, advances and deposits must be tracked and reconciled to the final disbursement.
- Payroll advances may only be requested by authorized payroll staff. The specific purpose for the advance must be written on the request.
- Campuses will make advance payments to employees for salary earned only when (1) there have been errors or delays in submitting or processing documents making it impossible for the State Controller's Office to prepare and deliver proper salary warrants within the customary payroll time schedule, or (2) separating employees are in immediate need of their final salary payments, or (3) when necessary to alleviate serious, unforeseeable hardship.
- Campuses must prepare written procedures to be followed before advances are given, including approval processes.
- Payroll advances will be issued for amounts as close as possible to the actual net payments which will be made in the future by the State Controller's Office, less other amounts due to the campus. The salary advance can be based on the employee's prior period pay or by computing the amount due for the advance period.
- Campuses must pay the difference between the employee's full net pay and the salary advance upon receipt of the Controller's warrant for the full salary payment. If the warrant is less than what was advanced, the campus must create a receivable and apply standard collections procedures.
- Travel advances are governed by the CSU travel policy (see Guidelines below).
- A traveler should have only one outstanding cash advance at a time.
- Unused advances must be returned to the University immediately after travel is concluded and may not be applied to other business expenses or business travel.
- Sixty days after a trip is expected to be completed, the Accounting Office should initiate proceedings for the recovery of any outstanding cash advances. Any advances that cannot be recovered from the traveler will be charged to the account indicated on the Travel Advance Request or Check Request forms or as designated by the accounting office.
- A traveler’s failure to comply with their travel advance responsibilities may result in their temporary or permanent ineligibility to receive travel advances. Campuses must establish procedures that describe conditions by which travel advance privileges are suspended and revoked. Campuses may establish supplementary procedures outlining conditions by which travel advance privileges may be reinstated.
Vendor Prepayments & Deposits:
- Vendor prepayments are encouraged when downstream benefits such as fewer check runs and reduced postage costs are realized.
- Campuses must establish criteria for the prepayment of goods and services.
- Prepayment requests must have the appropriate documentation and be approved by authorized personnel.
Benjamin F. Quillian
Executive Vice-Chancellor/Chief Financial Officer
Approved: October 31, 2011
APPLICABILITY AND AREAS OF RESPONSIBILITY
RESOURCES AND REFERENCE MATERIALS
ICSUAM 3601.01 CSU Travel Policy
G-001 Travel Procedures and Regulations
Sound Business Practices:
Laws, State Codes, Regulations and Mandates:
COGNIZANT OFFICE(S)CO Manager:
Mr. Robert Eaton
Senior Director, Financing and Treasury
CSU Office of the Chancellor
Banking Services Analyst
Manager, Accounts Payable
Director, Fiscal Services
San Luis Obispo
Manager, Accounts Payable
Manager, Accounts Payables and Recievables
Director, Student Financial Operations
FOA, Accounts Payable Managers