4.8 Travel Advances and Corporate Credit Cards
Travel advance refers to any payment to an employee for travel expenses made prior to the time that expenses will be incurred for a scheduled, future trip. Please refer to Sections 6.3 through 6.5 of the Statewide Travel Policy for guidance on travel advances. More specific guidance on authority and approval procedures is addressed in the following sections.
Note: Institutions are authorized to set specific policies and procedures regarding travel advances, provided the policies and procedures do not conflict with any regulations addressed in Statewide Travel Policy.
Office of Planning and Budget OPB Policy Memorandum No. 1 (Revision 6, January 2104) Section 3 defines the Internal Revenue Service Requirements for travel advances. Employees who receive corporate charge cards are authorized to use the charge cards for business purposes only.
4.8.1 Authority to Advance Cash for Travel
Since corporate charge cards are now available to employees, institutions should minimize the use of cash advances. However, institutional personnel still should consider issuing cash advances for the following circumstances:
- For justifiable reason(s), the employee has not received a corporate charge card;
- For employees who generally do not travel and are making a one-time trip; or
- For special exceptions approved by the department head, dean or his/her designee.
Note: The Office of Planning and Budget OPB Policy Memorandum No. 1 (Revision 6, January 2104) states that travel advances are available only to an employee whose current annual salary is $50,000 or less when traveling within the United States. Travel advances are available to an employee, regardless of salary level, for international travel.
The department head, dean, or his/her designee is authorized to advance state funds to employees traveling on behalf of the state. Funds may be advanced for anticipated subsistence (meals and lodging), as well as for mileage and other transportation costs that are reimbursable under these travel regulations. Travel advances are not required by state law or by these regulations, but are left to the discretion of the department head, dean, or his/her designee.
4.8.2 Approval of Cash Advances for Travel
Department heads, deans, or their designees are required to specifically authorize each cash advance made to an employee. The written authorization for a cash advance should be included on the Travel Cash Advance Authorization form. This form also should be signed by the employee to document that the cash advance was received.
4.8.3 Amount of Cash Advance
Each institution may establish its own policies regarding cash advance limits. Institutions should consider the nature and probable duration of the travel when determining cash advance limits. The amount of a cash advance shall be related to the estimated cost of travel, as outlined on the travel authorization form, but shall be held to a minimum and allowed only when the department head, dean, or his/her designee determines that an advance is warranted.
4.8.4 Employee and Institution Accountability of Funds Advanced
Each employee receiving a cash advance shall sign and date the travel advance authorization form, acknowledging cash advance of the funds. All employees are fully responsible for funds advanced to them and shall account for the funds in accordance with the statewide travel regulations. Employees are liable for any advanced funds that are lost or stolen.
Neither state law nor these regulations, however, in any way relieve the department head, dean, or his/her designee from the responsibility of accounting for all funds expended for travel purposes.
4.8.5 Recovery of Cash Advances Made for Specific Trips
When the actual travel expenditures reported on the travel expense statement exceed the amount of the cash advance, the employee shall be reimbursed for the additional travel costs incurred. Cash advances for specific trips shall be recovered under the following three circumstances:
- When the actual travel expenditures reported on the travel expense statement are less than the amount of the cash advance, the employee shall reimburse the institution for the difference. This reimbursement shall be made at the same time that the travel expense statement is submitted.
- In the event of cancellation or indefinite postponement of authorized travel, any cash advances that were made shall be refunded immediately.
- Outstanding travel advances should be recovered from terminating employees. The department head, dean, or his/her designee shall establish procedures to ensure that terminating employees do not have outstanding cash advances and have turned in their corporate charge cards.
4.8.6 Recovery of Cash Advances for Continuous Travel
For cases in which an employee is in a continuous travel status and has been given a blanket routine travel authorization, the full recovery of any cash advance is not required until the employee is removed from continuous travel status. Both the employee and the department head, dean, or his/her designee shall be responsible for ensuring that the cash advance does not exceed the expected travel expenses for one (1) pay period. Travel expenses incurred during each pay period shall be reported on the travel expense statement and submitted at the end of the period. Any reimbursement of funds to the employee must not increase the outstanding cash advance above the authorized limit.
4.8.7 Corporate Charge Cards
Corporate charge cards may be issued to eligible employees upon approval by the department head, dean, or his/her designee and the company issuing the corporate charge card. Corporate charge cards are beneficial because they:
- Reduce the employee’s and the institution’s cash flow by minimizing the need for cash advances;
- Reduce the frequency of reimbursements for travel expenses;
- Require no annual membership fee or finance charges if paid within the terms of the agreement;
- Provide emergency cash to the employee;
- Eliminate the need for the institution to direct pay airline tickets, travel agents, and car rental agencies;
- Provide guarantee for hotel rooms and other services requiring a deposit; and,
- Provide the institution with various financial reports regarding employee travel expenses.
Corporate charge cards are issued directly to the employee, and all expenses charged to the corporate charge card are paid by the employee. Therefore, there is no liability to the state or an institution, even if the employee defaults.