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University of North Texas
Procedures for Purchase of Gift cards
Associated Policy:
10.006 – Cash Handling Controls
Date:
April 6, 2022
Policy Owner:
Walter Itoman, Assoc VP for Budget and Analytics
Primary Contact(s):
Department(s) Involved:
Budget, Compliance and Ethics
The following procedures outline the internal controls for the purchase, tracking and reporting of
gift cards for: (1) employees of UNT, (2), Participants in studies and (3) UNT students. The
following best practices have been identified and establish minimum requirements to be followed
in the purchase, distribution and safe keeping of gift cards.
I. General:
a. Generally, gift cards should not be used for payments, gifts, or any other purposes.
b. In the event that gift cards are the only efficient method available for the purpose proposed,
the cards must be treated as if they are cash money and individuals requesting gift cards must
follow the procedures in this document.
c. Regardless of the payment amount or method used, payment to university
faculty and staff participating as research subjects represents taxable income
to the recipient and are taxable on employee paychecks and subject to taxes.
d. Departments utilizing sponsored project funds for research payments are
encouraged to coordinate with their post-award office for the best method
to request funds in compliance with grant terms.
e. Payments of $600 or more in one calendar year to a non-employee requires
UNT System to issue a Form 1099 at the end of the calendar year. Therefore,
custodians must submit the following information about the participants by
sending an encrypted email to UNT System Tax at [email protected] after
Policy Logistics
Process Specifications
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each event or disbursement date:
i. participant name,
ii. address,
iii. social security number, and
iv. the amount paid.
These requirements also apply to research participants payments
administered through third party service providers.
f. Payments to nonresident aliens (individuals who are not US citizens,
permanent resident aliens, or resident aliens for tax purposes), regardless of
the amount, are subject to 30 percent federal income tax withholding. 30
percent federal tax withholding must be deducted from the amount of the
payment. Failure to withhold or report taxes withheld in a timely manner
could result in IRS penalties assessed in the case of an audit finding. Any
penalties assessed by the IRS due to non-compliance will be charged to the
respective department conducting the research/study. If a research study
intends to involve nonresident aliens, the PI should contact the Research
Compliance Office to assist with planning.
II. Approval Process:
a. University gift cards may be used to incentivize employees and students in the course of
research or studies. Gift card use for other reasons is discouraged by UNTS Procurement
Guidelines. Purchase of gift cards for research purposes must be approved by the Division of
Research and Innovation.
b. UNT purchasing cards (p-cards) should not be used for the purchase of gift cards. Any purchase
of gift cards using a p-card must be approved by University Compliance and Ethics.
c. Departments purchasing gift cards through the ePro requisition process must include the
following information in the justification:
i. State the name and telephone extension of the individual designated as custodian of
the gift cards.
ii. The custodian must be a full-time benefits eligible employee who will be designated as
the responsible party for custody of the cards at all times and is required to maintain a
Participant Disbursement Log (see section IV below).
III. Purchase and Storage:
a. All employees involved in distribution of cards must complete cash handling
training.
b. Log the gift card information (card number and dollar amount) into a tracking
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sheet immediately upon receipt and store in safe that is attached to building.
c. Perform a reconciliation of gift cards:
i. Reconciliation must be performed every 60 days
ii. Reconciler should be independent and not involved in receipt or
disbursement of the cards
iii. Validate recipients who signed for gift cards to the official
participant/winner list
iv. Validate gift cards disbursed plus remaining gift cards reconciled to
the original total number and amount of gift cards purchased
v. Supervisor reviews and verifies the reconciliation.
d. Conduct periodic review of remaining gift cards to ensure the amount
disbursed plus the amount in the safe reconciles to the total amount
purchased by Procurement.
e. Change safe combination when a staff member with knowledge of the safe
combination leaves employment
IV. Distribution and Reporting:
a. Maintain a separate Participant Disbursement Log for each program and note the PI /
Sponsor if research related
b. Log the following for each person who receives a gift card:
i. Last 4 digits of gift card number and amount of gift card (do not record PIN
in the log)
ii. Name, address, social security number and e‐mail or phone number. Note:
Social Security number is required for gift cards of $100 or more.
iii. If the gift card is less than $100:
• UNT Employees participating in confidential research studies
may provide an Employee ID number in lieu of the information in
(ii).
• the study ID associated with that individual may be used for non-
UNT employees however the participant must acknowledge on
the consent form that they will not collect more than $600
annually from UNT.
iv. Date gift card was disbursed to participant and disburser’s name
c. Maintain supporting documentation (e.g. procurement emails, copies of e‐mails
sent to/received from employee/participant).
d. All Participant Disbursement Logs that contain social security numbers should be
kept in a password protected file or in the safe with the gift cards as it is considered
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Category 1 data and must be safe guarded by the university.
e. An independent reconciler should validate the following:
i. Information on log (amount, gift card number) corresponds to the original e‐
mail received from Procurement and amount of the gift card corresponds to
the study/award document.
ii. Recipient e‐mail address corresponds to e‐mail address on distribution e‐
mail
iii. Recipient name, e‐mail address and phone number are listed on the official
participant list
iv. Request gift card recipients confirm by e‐mail they have received the gift
card (embed copy of e‐mail from recipient in Excel log)
f. Send log via encrypted email after each event or disbursement date:
i. For gift cards given to Faculty or Staff – UNTS Procurement at BSC-
ii. For gift cards given to Student, Volunteers, Individuals & Groups - UNT
System Tax at [email protected]
iii. For gift cards given to Research Study Participants – UNT System Tax at
V. Compliance
a. It is the Organization Department Holder or Project Holder’s responsibility to track and
resolve noncompliance issues.
b. Departments will adhere to their specific written procedures on how this is handled.
VI. Records Retention:
a. It is the Organization Department Holder or Project Holder’s responsibility to track and
maintain records for the department.
b. Departments will adhere to their specific written procedures on how this is handled.
c. Contact the Office of Records Management for additional, specific instruction.
