Approved by: The President
History: Issued  July 8, 2024
Revised
Adoption Note – Replaces Prior Gift Card Policy and
embeds Gifts and Donations to External Party Policy
Related Policies: Procurement Policy; Procurement Card Policy;
Indemnification Policy; Record Retention Policy
Additional References: Contract Review Process
Policy Owner: Vice President for Finance and Administration, tel. (202)
319-5606
Contact Person: Assistant Controller, Finance Operations tel. (202) 319-
5546

Policy Statement

 

This Policy outlines guidelines for gifts, awards, and prizes to employees, students, and external parties, including tax withholding and reporting requirements. This Policy applies to all University trustees, officers, employees, and students regardless of funding sources. This Policy does not apply to scholarships or fellowships which are paid to benefit an individual in their educational or research pursuits. This Policy also does not apply to the receipt and management of philanthropic gifts to the University, governed by the Fundraising and Gift Acceptance Policy.

 

I. Definitions

  1.  Award: item of monetary value provided as the result of a competition or in recognition of an accomplishment, achievement, or performance; also refer to Prize
  2. Cash and Cash Equivalents: include checks, traveler's checks, money orders, gift cards, and gift certificates
  3. De Minimis: Noncash gift, prize, or award with so little value per Internal Revenue Service (IRS) guidelines that accounting for it would be unreasonable or administratively impractical (IRS threshold is $100 as of 2022). Examples of de minimis items include: mugs, t-shirts, items which may bear the University's logo, medals, trophies, plaques, books, occasional meals, occasional coffee, donuts, and beverages. Cash and cash equivalents are never considered de minimis.
  4. Donation: an unconditional, voluntary transfer of funds or property by the University to an individual or entity that is accompanied by philanthropic intent and for which the donor does not receive or expect anything of monetary value.
  5. Employee: Employees include faculty, staff, and student workers.
  6. Gift: A token of appreciation given without reciprocity, often used to strengthen or enhance business relationships; also see Donation
  7. Gift Card: a prepaid debit card issued physically or digitally that is to be used for purchases in place of cash
  8. Prize: received as a result of a game of chance, raffles, drawing, judged competition, or contest of skill, either with or without purchasing of a chance or ticket. Prizes may benefit student recruitment, employee morale, promoting interest, or encouraging participation.
  9. Responsible Employee: employee responsible for disbursing the award, gift, or prize and is also accountable for the documentation, internal control, and other policy requirements; the Principal Investigator (PI) is the responsible employee on a sponsored project and cannot delegate this role.
  10. Sponsorship: funds provided to an external organization for which the University receives return benefits, such as tickets to a luncheon, dinner, fundraising event, or public recognition in the form of an acknowledgment or advertisement.
  11. Study Subject: an individual about whom an investigator conducts research and obtains data through intervention or interaction with the individual.

II. General

 

The Catholic University of America is funded substantially from student-related charges and donor and governmental support. The reasonable expectation of these stakeholders is that these funds support the educational mission of the University. All non-de minimis gifts, prizes, and awards must be requested through the Gifts, Awards, and Prizes request form and approved by the appropriate department authority, Controller, and internal approver(s) as identified on the Gifts, Awards and Prizes Approval Matrix. The form can be accessed through Cardinal Station, Cardinal Financials under My forms. The following general principles should be considered and followed:

  1. University funds should not be used. Departments are encouraged to take up voluntary collections of personal funds to buy gifts when using university funds is inappropriate. Occasionally, a university department may find it appropriate to provide tokens of appreciation or gifts for special circumstances and life events such as individual recognition, retirement, or death of an employee or immediate family member.
  2. Approvals should be obtained in advance. Regardless of dollar amount and recipient, all gifts, awards, and prizes must have a valid, documented business purpose and comply with University policies and procedures including obtaining the requisite approvals and forms as identified in the Gift, Awards, and Prizes Matrix.
  3. University Donations to External Entities should align with the University's mission and goals. University funds shall not be donated, transferred, or otherwise given to an external individual or entities, nor applied to their obligations for any purpose other than to advance a specific goal integral to the University’s educational mission.
  4. Political Officials. Examples of inappropriate use of University resources include support for political activities including gifts or contributions to political parties, officials, or political action committees (PACs) or any similar organization that might put the University’s not for profit status at risk.
  5. Gifts to Foreign Officials. Foreign officials include all employees of non-U.S. national, state, provincial, and local governments and all their departments and agencies, from high-level officials to low-level employees. Gifts to Foreign officials are generally prohibited. In the event that a gift occurs, the gifts, awards, and prizes to foreign officials must comply with the provisions of the Foreign Corrupt Practices Act (FCPA).

 

III. Tax Considerations

  1. Employees

The Internal Revenue Service (IRS) considers gifts, awards, and prizes provided to employees (including student employees) as taxable compensation reportable on the employee's annual Form W-2 except in the following instances:

  • De minimis items
  • Prize or award resulting from a contest or raffle open to the general public. Such amounts will be reported as taxable income on the 1099-MISC income.
  • Length of service awards provided that the following applies:
  1. The award is presented during a meaningful presentation that emphasizes the purpose of the award.
  2. The award is a tangible item such as a plaque, watch, ring, pen, or similar item.
  3. The award is not received during the employee's first five years of employment or more often than  every five years.
  4. The value of the award does not exceed $400 per year per employee.

The Payroll department shall utilize its discretion to gross-up the amount reported as taxable income such that the value of the gift, prize, or award received by the recipient is the net value after taxes.  Length of service awards are submitted for approval of the University President by the Office of Human Resources for those employees that qualify.

B. External Parties and Non-University Employee

The IRS requires the University to report gifts, awards, and prizes exceeding $600.00 to external parties and non-University employees on Form 1099.  Amounts less than this threshold, including de-minimis items, are not reportable as they do not meet the required IRS reporting threshold.

C. Students

Students who are not employed by the University shall be treated in the same manner as External Parties and Non-University Employees.

D. Nonresident Aliens

Special withholding and reporting rules apply to payments made to nonresident aliens, including faculty, staff, students, and visitors. Payments to nonresident aliens will generally be reported on Form 1042-S and may be subject to a 30% foreign tax withholding as mandated by the IRS. Additional tax forms may be required depending on citizenship and immigration status. If an award is made to a nonresident alien, the responsible employee should contact the International Student and Scholar Services for guidance.

 

IV. Special Considerations

 

Gifts, awards and prizes require approval through the appropriate department authority. Gifts Awards and Prize requests are found on Cardinal Station through Forms in Cardinal Financial. The online forms will route to the appropriate approver(s).

A. Gift Card Requirements

Gift cards additionally require the Controller's approval and must be purchased centrally through the Office of Treasury Operations.  The purchase of gift cards with a University issued credit card, personal funds for University reimbursement, or other means is prohibited. 

Gift cards may be used for the following purposes:

  1. Compensation for Study Subjects in studies approved by the University's Institutional Review Board (IRB)
  2. Prizes for employees, students, and non-University employees

Gift cards may not be used to award a bonus, honoraria, or other means of compensation or to issue travel advances, travel/meal per diems, or expense reimbursements.  Such payments should be processed in accordance with Human Resources/Payroll or Accounts Payable policies.

To facilitate annual tax reporting requirements, no gift cards should be distributed from December 5th-31st except during the University's annual holiday celebration or other Presidential approved initiatives.

B. Study Subject/Research Participant

Federal and state regulations require that all sponsored program activities that involve human subjects be reviewed and approved by an Institutional Review Board (IRB). The IRB is responsible for determining that the appropriateness and timing of payments protects the confidentiality of the study subject or research participant. 

When gift cards are being purchased with grant funds, the following criteria must be met in addition to the other guidelines noted previously in the Policy:

  1. The gift card payment must be allowable by the grant.  Costs of the Study Subject payments must be included in the grant budget.
  2. The gift card must only be used for Study Subject and Research Participant payments.
  3. If the Institutional Review Board has approved a waiver of informed consent and authorization, no identifiers of the human subjects are required to be collected.  However, the Principal Investigator is required to maintain documentation of payments made to human research subjects for tax reporting purposes.  The University recognizes that the identity of research subjects is confidential and therefore documentation requirements are revised as follows: 
    1. To the extent gift cards provided to Study Subjects are less than $100 AND the Study Subject is not expected to receive cumulative payments over $600 for the calendar year, the Principal Investigator may provide a Gift, Award, and Prize Log listing "Research Participant" and the amount of the gift card only.
    2. If a gift card $100 or greater is provided to a Study Subject or at any time, it is anticipated that the Study Subject will receive $600 or more in a calendar year, the Principal Investigator is responsible for identifying the recipient and completing all personnel information on the Gift, Award, and Prize Log and collecting a completed IRS Form W-9 or other necessary tax forms.
    3. If a sponsored research study participant is a nonresident alien, the Principal Investigator should contact the Tax Department at cua-tax@cua.edu.  

 C. Internal Controls

1. Responsibility

The Responsible Employee has primary responsibility for safekeeping, maintenance and proper usage of the gift cards and for advising faculty, staff or students who handle the cards that they must follow this process. Gift cards must be safeguarded at all times and accounted for as if they were cash. For sponsored projects, the Principal Investigator must maintain all records regarding the Study Subjects.

2. Custody

The Responsible Employee holds custody of the cards (physical and digital) and should always know where they are. Custody may be transferred temporarily from the Responsible Employee to other departmental personnel for disbursement purposes, but the Responsible Employee still holds primary responsibility for the safekeeping of the cards.

The Treasury Services Office will record the serial numbers of physical gift cards distributed to departments for purposes of tracking custody of each card.

3. Physical Access

Physical Gift cards must be secured at all times (e.g. in a locked box in a locked cabinet or drawer) with limited access.

The Finance Division is responsible for safeguarding any gift card related tax documentation and must keep these records secured with limited access at all times.  The Treasury Services Office will keep any inventory in a safe.

4. Tracking

Physical gift card disbursements must be documented on the Gift, Award, and Prize Log. Because of IRS requirements, a recipient cannot receive a gift card if he or she refuses to provide the requested information. If the Responsible Employee disburses the card without obtaining this information or fails to provide a completed log, he or she may be personally responsible for funding the gift card purchase.

Digital gift cards require submission of recipient data through University approved digital gift card platforms in lieu of a Gift, Award, and Prize Log.

Due to the nature of the data collected on the  Gift, Award, and Prize Log, please treat the log as confidential information under the Information Assurance Policy.

5. Inventory

The Controller’s Office will maintain an inventory of gift cards not disbursed.

Departments holding more than one gift card must perform a physical inventory at least weekly. The inventory should be performed by someone other than the Responsible Employee but in the presence of the Responsible Employee. Any discrepancies must be reported immediately to the Controller.

6. Unused Cards

Physical and digital gift cards which have not been distributed by the requestor within 6 months of receipt should be returned to the Treasury Operations Office.

7. Lost Cards

The Responsible Employee will be held responsible for any gift cards in their possession that are lost or misplaced. Any shortage must be reported immediately to the Controller.

V. Failure to follow this Policy 

 

Individuals or units who violate this Policy may be required to reimburse the University for the cost of funds distributed and any necessary fees to facilitate such transactions.

Gifts, Awards, and Prizes Approval Matrix

All gifts, awards, and prizes must be approved by the appropriate department authority, Controller, and internal approver(s) as identified on the Gifts, Awards and Prizes Approval Matrix.  The IRS de minimis threshold is $100.

Distribution Type

Amount Range

Approval Authority

Gifts/Donations5

  Cash & Cash Equivalents

$500 or less

Department Head

Greater than $500

Academic Delegate

or

Admin Delegate

Sponsorship1

 

 

 

Individual tickets of $150 or less, or tables of $1,500 or less

Department Head

Individual tickets greater than $150, or tables of greater than $1,500

Academic Delegate

or

Admin Delegate

Gifts/Donations1, 2

  Non-Cash & In-Kind

Fair value for de minimis amounts ($100 or less)

Gift form not required

Fair value for amounts greater than de minimis up to $500

Department Head

Fair value for amounts greater than $500

Academic Delegate

or

Admin Delegate

Prizes1, 2

Awards

  Non-Cash & In-Kind

Fair value for de minimis amounts ($100 or less)

Gift form not required

 

Fair value for amounts greater than de minimis up to $500

Department Head

Fair value for amounts greater than $500

Academic Delegate

or

Admin Delegate

Prizes5

  Cash & Cash Equivalents

De minimis amount ($100 or less)

Gift form not required

$500 or less

Department Head

Greater than $500

Academic Delegate

or

Admin Delegate

Awards5

  Cash & Cash Equivalents

$500 or less

Department Head

Greater than $500

Academic Delegate

or

Admin Delegate

Foreign Officials3

Prohibited

N/A

Political Activities

Prohibited

N/A

Research/Study Participants4,5

   Cash and Cash Equivalents

All amounts

Principal Investigator

1 Items may be purchased on a procurement card within the respective transaction limit with advance approval from designated individuals

2 All noncash or in-kind contributions must be reported to the General Accounting Office. Information provided should include a complete description of the contribution provided and the approximate value.

3 All gifts, awards, and prizes to foreign officials are strongly discouraged and must comply with the Foreign Corrupt Practices Act (FCPA). Gifts may not be cash or cash-equivalent, lavish, or extravagant. 

4 Refer to  External Parties - Study Subject/Research Participants for additional requirements.

5All gift cards require approval by the Controller or their delegate before purchase.