Policy: 301-Custodian Funds
Date: 12/11/2007 (Last updated 01/14/2010)

Statement of Policy:

All custodian funds may only be given to authorized/permanent UW employees or Department. The custodian funds are issued for a specific purpose and may not be used for any other purpose than expressed on the Custodian Fund Request Form. The use of custodian funds must be properly accounted for within 30 days after the end of the custodian fund time period.

All custodian funds require, at minimum, monthly review and reconciliation to the authorized custodian fund levels and quarterly reporting of expenditures by using the Custodian Fund Accounting Form.

Custodian funds are intended to allow authorized UW employees/departments to make the above listed payments more quickly and efficiently than the normal payment process. It is essential for the individual or department responsible for the custodian funds to maintain timely, accurate, and complete accounting records, custodian fund information, and bank account reconciliation. Custodian funds are provided from the Department funding accounts, and must be accounted for and repaid as required by the custodian agreement within 30 days of the custodian fund time period end date. Any portion of the custodian funds not accounted for must be returned to UW Cash Management in the form of a check payable to “University of Wisconsin-Madison” and attached to the Custodian Fund Accounting form.

Research Subjects

Payments to research subjects are paid by either a PIR Form (Payment to Individual Form), Replenishable custodian funds, or Temporary custodian funds. In general, a log must be kept for all disbursements, including name, mailing address, social security number, signature of recipient, amount paid to each individual, and payment date except for de minimis. 

Payments to a Nonresident Alien (NRA): 

All payments to NRA’s must be processed through a Payment to Individual Report (PIR) and must include documentation as outlined in http://www.bussvc.wisc.edu/howto/acct/requiredtx.html. All other policy and procedural guidelines regarding research subject payments remain the same except for the de minimis amount section of Policy: 103-Payments to Human Subjects (http://www.bussvc.wisc.edu/acct/policy/human_subjects/humanpol.html).  The de minimis amount section does not apply to payments to NRA’s because of the documentation required by the IRS for all payments to NRA’s, as noted above.

De minimis payments:

De minimis payments are less than $100 per transaction and less than $300 in total for an individual. For de minimis payments, you are not required, but encouraged to obtain a social security number and signature from each subject. 

Research Payments:

One-time Research Subject Payments to UW students which are $100 or less per calendar are deemed independent contractors of the institution and do not need to be paid through payroll. Any payments greater than $100 to a UW student must be paid through payroll. See FPPP #31 for more details.

All payments $300 and over to an individual must be submitted on the PIR Form including the home mailing address and the social security number. 

Research payments to UW employees are treated the same as non-employees. These payments are not considered income or wages and therefore UW employees will not need to be pay rolled for their services. All other policy and procedural guidelines regarding research subject payments remain the same for these payments. Please refer to the e-mail that was sent to DBR’s on 11/14/08.

See the web pages for Policy: 103-Payments to Human Subjects and Policy: 101-Payments to Individual.

Temporary

Temporary custodian funds are only available to authorized/permanent UW Madison employees for project/program expenses. These custodian funds are issued to the custodian only and cannot be issued for another person working for the custodian.

Temporary custodian funds are for time periods of three months or less and can be expensed in increments or all at once. This is done by providing the custodian funds on the department's funding sources and accounting for expenditures by expensing them to specific funding strings. Please attach the Custodian Fund Budget Information Form to the Custodian Fund Request Form and the Custodian Fund Individual/Department Custodian Agreement.

Replenishable

Replenishable funds are custodian funds available to Departments or extramural projects.

Replenishable funds are generally set up for a period of one year to three years. They require a UW Madison checking account established and set up by UW Cash Management. These bank accounts cannot be used to purchase gift cards nor to request cash withdrawls. The balance in the bank account is kept at the authorized custodian fund amount by recording expenditures on the Custodian Fund Accounting Form and using specific department funding strings. At a minimum, monthly review and reconciliation to authorized custodian fund levels are required for all activity incurred within these checking accounts. Quarterly reporting of expenditures is required by using the Custodian Fund Accounting Form.

Change

Made for an indefinite time period to a Department operating a cashiering function which requires making change for retail sales and/or a petty cash expenditure operation. This is done by providing the custodian funds on the department's funding sources. A balance in the account is kept at the authorized amount by accounting for expenditures on a monthly basis and charging them directly to specific funding strings.

All types of custodian funds require the completion of the Custodian Fund Individual/Department Custodial Agreement, signed by authorized departmental personnel and monthly reconciliation of the authorized custodian fund amount to the cash on hand or bank account balance.

Related Procedure(s):

Who should know this policy?

Deans, Directors, and Staff dealing with custodian funds

Related Documents:

Contacts:

Sharon Hughes | Cash Management

uwtravel@bussvc.wisc.edu (for which expenses are allowed)

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