9.15 Operational Advances

Last Revised Date
Monday, June 4, 2018 - 4:13 pm
Purpose: Inform University personnel of the policies and procedures required to establish and settle operational advances.
Policy Owner: Comptroller-Financial Management
Tutorial: https://upktraining.uits.arizona.edu/odstrack/content/financials/toc0.html

 Policy Statements | Requesting Advances | Settling Advances
Operational Advance Promissory Note | Record of Operational Advance Expenditures


  1. Operational Advance: A cash advance used to provide operating funds to project directors and other authorized University employees, for expenses such as field trips, payments to subjects in approved psychological/medical experiments, and various other circumstances, where it is not practical to use the campus purchasing and payment system. Such advances are designed to assist the project director or other authorized user in those cases where exact amounts and types of expenditures cannot be predicted, and where a local disbursing function is essential to the project, as in the case of a remote location. Multiple advances are not allowed for the same individual on the same account at the same time. An outstanding advance must be settled before another advance will be reviewed or approved.There are two types of operational advances:
    1. Regular One-Time Advance: A lump sum advance with a specified settlement date.
    2. Revolving Advance: An advance with a specified settlement date(s) that can be replenished as funds are spent.
    The operational advance may not be used as a travel advance for travel purposes. Travel advances are available for approved trips in accordance with Policy 14.10, Travel.
  2. Operational Advance Promissory Note: The employee who has requested and will be using the funds must sign the Operational Advance Promissory Note.  In the event the funds are to be used by a non-employee, the Operational Advance Promissory Note must be signed by a responsible employee, such as the principal investigator, department head, or dean who is personally responsible for seeing that the advance is settled.  The department completes the Operational Advance Promissory Note and submits it to Accounts Payable for processing.
  3. Record of Operational Advance Expenditures: The Record of Operational Advance Expenditures or equivalent expense summary must be maintained to support the expenditures incurred using the advance.  

Policy Statements

  1. Generally, an advance is available only to an individual who is an employee of the University of Arizona. In the case of unusual circumstances, an advance may be available to a non-employee of the University of Arizona on approval by the Director, Sponsored Projects & Contracting Services, for sponsored project grant and contract accounts (3000000 through 4999990), or by the Assistant Comptroller - Financial Management, for all other accounts.
  2. Operational advance funds cannot be used for expenditures which are prohibited by University of Arizona policy or per a sponsor's funding agreement.
  3. The expenditures must conform to the approved budget categories, and the expenditures cannot result in excess costs beyond flexibility limits of the budget categories without prior written approval from the sponsor, for sponsored project grant and contract accounts (3000000 through 4999999), or from the Budget Office, for all other accounts. The use of advance funds should be handled with an awareness of the status of the account prior to and during the period in which the funds are being spent.
  4. At the time of settlement of the operational advance, any expenditure disallowed by a sponsor agreement will be charged to the user's department funds or, if the expenditure is not allowable from the department funds under University policy, the employee responsible for the funds will be held personally liable.
  5. The use of operational advance funds is subject to Federal and/or University audit. The individual who spends these funds is responsible for the proper disbursement of the funds, receipting, and record keeping according to sponsor and University requirements.
  6. The employee who signed for the funds will be held personally liable for the funds advanced. In the event of termination of employment, the University Payroll Department may exercise the right-of-offset, or the University may take other legal action as appropriate.
  7. Operational Advance funds may be utilized to purchase prepaid cards/certificates for the purpose of distribution to participants for the mission of conducting University research. Prepaid cards/certificate should be purchased from an established business that will honor the card/certificate for a specified period of time. Prepaid card/certificate should contain no additional fees (i.e. Visa or American Express cards) or costs to the participant. Prepaid card/certificate must be purchased in small increments based on anticipated usage/length of study as unused prepaid card/certificate may not be utilized to settle the Operational Advance funds.
    • One time cash equivalent (prepaid card/certificate) less than $50 do not require the University to collect a Social Security Number for tax purposes.
    • One time or multiple cash equivalent ( certificate/card) exceeding $50 MUST obtain a Social Security Number and provide to central administration for potential tax reporting purposes.
    Distribution of prepaid card/certificate must be logged on an Operational Advance Expenditure Record.  Any remaining card/certificate after completion of the research study become the property of the Promissory note payee as they may not be used to settle the advance.

Requesting Advances

  1. The departmental business office completes a Disbursement Voucher (DV) in UAccess Financials and attaches a scanned copy of the signed Operational Advance Promissory Note. The disbursement date on the DV must be no more than 30 days prior to the use of funds. The original Promissory Note and DV cover sheet must be sent to FSO-Operations.
  2. Employees receiving Operational Advance funds may receive funds via a physical check or Direct Deposit (ACH) into their designated banking account identified in UAccess Employee. The direct deposit will appear in the payee’s banking account within 48 hours after the Disbursement Voucher is in FINAL status in UAccess Financials. Please contact Accounts Payable should the payee require the funds to be wire transferred or deposited into a project specific account.

    If payment is preferred by physical check the payee will be contacted by Accounts Payable when the check is available for pick up at University Services Building (USB) Room 402. The Payee must pick-up the check in person at the Accounts Payable office and sign for the check and Promissory Note if this has not already been completed.

Settling Advances 

  1. The advance must be settled within 30 days of the conclusion of the time during which funds were needed. If the period in which the advance is used extends longer than 60 days, partial settlements must be made to report actual expenditures every 30 days, when possible and at least every 90 days. If the advance is not settled in a timely manner, (defined as 120 days by the Internal Revenue Service (IRS) following the conclusion of the time during which funds were needed (Treas. Reg. § 162-2)), the appropriate fund accountant will contact the responsible parties.
  2. If the fund accountant is unable to resolve the delinquent advance, within the 120 day limit stipulated by the IRS, the fund accountant will refer the advance to Payroll for deduction from the holder's pay check. If the person who is responsible for the operational advance leaves the University without accounting for the advance, the department associated with the funding account assumes responsibility for the funds. Accounts Receivable - Bursar's Office will assist the department in the collection of the funds, including any associated collection fees.
  3. The person responsible for the advance completes the Record of Operational Advance Expenditures or an equivalent expense summary form, organizes, and attaches all original itemized receipts substantiating the expenditures in chronological order by type of expenditure then forwards to the appropriate departmental representative.
  4. The department prepares a new Distribution of Income and Expense (DI) for the actual expenses incurred. The Record of Operational Advance Expenditures and receipts must be forwarded to FSO-Operations with a copy of the original DV cover sheet. The DI should credit the original account object code 8310 (in the "From" line) and debit the appropriate account(s) and expenditure object code(s) (in the "To" line).
  5. Documentation needed:
    1. Expenditures: Supported in detail with the Operational Advance Expenditure Record (or equivalent expense summary form) and original itemized receipts.
    2. Payments to individuals, for example, subject pay: Include each payee's name legibly written or typed, social security number and home address. If the subject is paid in cash instead of by check, the subject must sign to acknowledge receipt. SSN and home address are not required for subject payments of less than or equal to $50; only the payee's signature is required.
    3. Payments to nonresident aliens are governed by policy 9.16 Payments to Nonresident Aliens, which contains detailed information about payments allowed and documentation required. Refer to policy 9.16 before payment is made to or on behalf of a nonresident alien as some visa types do not allow payments. For additional details on specific situations please contact FSO Tax Services.
  6. If a balance is due back to the University, do not send cash. Submit a check or money order made payable to the University of Arizona.  Make the deposit through the Bursar's Office using a Cash Receipt.