GAP 200.032, Research Subject Payments using Short-Term Cash Funds (STCFs)

I.    General

II.   Requesting a Research Subject STCF

III.  Cash Fund Disbursements After Fund Has Been Approved/Established

IV.  Controls For Handling and Maintaining Research Subject STCFs

V.   Procedures to Replenish Cash after Subjects are Paid

VI.  Losses and Thefts

V.   Disbursement and Repayment Timelines

VI.  Closing a Cash Fund

 

 

I. General

Distribution of University funds to research subjects should be made using the Duke ClinCard, a reloadable debit card.  This payment method provides increased efficiencies and internal controls, reducing the potential for loss or misappropriation of funds.  For information regarding the application and administration of this payment method, consult General Accounting Procedure 200.420, Processing Payments to Research Participants.

In limited instances, it may be appropriate to compensate/reimburse research subjects by cash using a pre-approved research subject short-term cash fund. This is generally appropriate in the following circumstances:

• High volume of small dollar research subject payments that do not exceed $50 each.
• No subject will receive more than $200 in aggregate compensation for the study.
• High volume of minor research subject reimbursements for miscellaneous expenses incurred for participation in a study (bus/taxi fare, parking, mileage, meal reimbursement). Such expenses must be documented by original receipt and reimbursement must match the expense.

In order to meet IRS tax reporting requirements, research subject compensation - whether paid by check or in cash and regardless of amount - requires documentation of amounts paid to the subject, to include name, SSN (or ITIN), and address.

An approved research subject short-term cash fund must not be used for incidental department operating expenses and should never be used to compensate/reimburse Duke employees, including reimbursing an employee for expenses incurred related to administering a study.

Research subjects STCFs are not an expense when received by the department. Instead, these funds are a loan from the general fund of the University that must be properly safeguarded by an established custodian and 1) supported by receipts when the funds are paid out or 2) returned when the fund is no longer being used and/or closed.

 

II. Requesting a Research Subject Short-Term Cash Fund (STCF)

To request a STCF for research subject payments, complete a Request to Establish a Research Subject Short-term Cash Fund and submit to University Cashiering.

University Cashiering will review the request and forward to the Associate Vice President & Associate Treasurer for final approval. Please allow 7-10 business days for the form to be processed after it is received by University Cashiering. The fiduciary on the request will be contacted if there are any questions. In cases where payment via check is deemed more appropriate, the fiduciary listed on the request will be contacted to review that option.

 

III. Cash Fund Disbursements After Fund Has Been Approved/Established

Funds are distributed to fund custodians in the University Cashiering office in Smith Building, 114 S. Buchanan Blvd, Bay 8, Room B-103.

• Cashier gives the requested funds to the custodian along with a receipt which the custodian signs to acknowledge receipt of the funds. The signed receipt is kept in the Cashier’s Office and a second copy of the receipt is given to the custodian for their records.
• For cash requests of $500 or more, or for specific denominations for any amount, custodian sends email to cashier@duke.edu
• Authorized individuals are required to present a valid Duke ID for pickup of funds.
• Available funds depend upon the fund limit and upon receipts cleared by Accounts Payable.

 

IV. Controls for Handling Research Subject Short Term Cash Funds

The following procedures must be followed for each fund. Non-compliance with these procedures will result in immediate dissolution of the fund.

• Only the custodian should have physical custody of the fund.
• Funds should be kept in a secure location as documented in the original request to establish the fund.
• As funds are paid to subjects, documentation for these payments should be collected and maintained by the custodian.
• The STCF should not be used to issue funds to foreign nationals. In order to comply with US Department of Homeland Security and Internal Revenue Service (IRS) regulations, certain documentation is required for foreign nationals to receive funds. Guidance on paying foreign nationals can be found on the Procurement & Accounts Payable website.
• Only STCFs should be used to compensate participants. Personal funds should never be used in place of STCFs.
• The custodian should verify the balance of the fund each time it is used with a minimum of one count per month (using Cash Fund Reconciliation Form).
• Form to be maintained within department.
• The fiduciary has ultimate responsibility for the accounting records and should monitor the balancing process and review documentation of cash on hand and payments made.
• At all times, documented expenditures/payments plus cash on hand should equal the amount advanced to the fund.
• The fiduciary of the fund should establish an alternate custodian who will be responsible for physical custody of the fund when the custodian is absent.
• The fund is not to be used to
  • cash personal checks for employees or students
  • make loans to any person or reimburse subjects for expenses outside of the scope of the fund’s purpose
  • make payments to employees or independent contractors for services
• Each fund should be reviewed by the fiduciary at least quarterly to determine that the above procedures are being followed and the fund is being adequately controlled, and that the need for the fund continues to exist. The fiduciary should document the review and maintain the documentation in the department.
• Duke Police must be notified of any thefts or misappropriation of a fund.
• All STCFs are subject to surprise audits of balances and procedures by University Cashiering and/or Internal Audit.

 

V. Procedures to Replenish Cash after Subjects are Paid

As funds advanced are paid out to subjects for compensation, the custodian may need to replenish the supply of cash available to researchers in order to allow the study to continue. To replenish cash paid to research subjects, the custodian should:

• Complete an Electronic Accounts Payable Check Request via the Duke@Work portal to document the payments made for subject participation and clear the funds advanced.
• Attach scanned copies of all original receipts in cases where research subjects have been reimbursed for expenses related directly to the study.
• Make sure the completed Electronic Accounts Payable Check Request is routed to and approved by both the custodian and the fiduciary of the fund. Both are attesting that supporting documentation is accurate and represents cash payments made to research subjects. Important: The Fiduciary assigned to the Cash Fund must approve the Electronic Accounts Payable Check Request form. This documentation must account for all funds disbursed. The properly completed Electronic Accounts Payable Check Request and supporting documents must be turned in to Accounts Payable.
• Remember that only amounts disbursed from STCFs to research subjects can be submitted to Accounts Payable for reimbursement. For example, payments made by employees to cover study expenses are not deemed STCF research subject payments, and may not be included in a request for STCF reimbursement.
• Remember that Accounts Payable must approve the requests before additional funds can be advanced.
• Be aware that Accounts Payable will process correctly completed forms in a timely manner, with funds usually replenished and available for withdrawal within 5 - 7 business days.
• Work with Accounts Payable to resolve any discrepancies noted with the Electronic AP Check Request and supporting documents.
• Maintain copies of all documentation provided to Accounts Payable.
• Be aware that University Cashiering will send an email confirmation to the custodian once the funds have been replenished.

 

VI. Losses and Thefts

All differences in the fund should be reported immediately to the Fiduciary and University Cashiering.

• In the event of a theft, a police report must be obtained.
• In the event of a loss of funds, a memo must be written to explain the circumstances surrounding the loss. The custodian and fiduciary must sign the memo.
• Complete an Electronic Accounts Payable Check Request via the Duke@Work portal to document the loss and replenish the fund.
• Attach a scanned copy of the original police report or loss memo to the check request.
• Charge any shortages and thefts to the department’s operating cost center using G/L Account 695600 (Losses, Damages, and Write-offs).

Supply a copy of the police report or loss memo to University Cashiering.

 

VII. Disbursement and Repayment Timelines

Funds should be used within a 30-day period.

• University Cashiering will monitor fund balances and receipt activity to identify funds outstanding for more than 30 days. If funds are outstanding for more than 30 days, an e-mail reminder will be sent to the custodian, and copied to the fiduciary and business manager. A hold may be placed on the funds until the account is brought current.
• If funds are outstanding for more than 60 days, the Duke Office of Audit, Risk and Compliance may be notified. Additional advances will be frozen until fund has been cleared.

 

VIII. Closing a Cash Fund

To close a cash fund:

• Complete the Close Fund Request form. The form must be signed by the department head, the custodian and the fiduciary.
• Complete an Electronic Accounts Payable Check Request form for all outstanding receipts. See Section V.
• Submit both completed forms, and any remaining cash, to University Cashiering, Smith Building Bay 8, Room B-103.

If a fund has a zero balance and has been inactive for more than 90 days, it will be closed.