RSCC Policy BA-10-01; Gift Cards

Roane State Community College

Policy Number: BA-10-01

Subject: Gift Cards

Purpose
To provide policies and procedures on the purchase, distribution, tracking and accounting for gift cards using college student activity fees, unrestricted, restricted, agency, Foundation or grant funds. As a cash-equivalent instrument, gift cards are governed by tax rules and internal control requirements. This policy states the circumstances when gift cards may be allowable, the tax implications to the recipient (students or volunteers). Any non-student college employee or a student who is employed by the college in a regular-part or full-time benefitted position are not eligible to receive gift cards.
Definitions
1. IRS: Internal Revenue Service
2. Gift Cards: A store-valued or similar instrument in lieu of cash or check, including without limitation, a gift certificate. Examples of gift cards:
  1. Anywhere/anytime cash such as Visa, American Express or money-orders.
  2. Store gift certificates or cards that are redeemable for a large variety of commodities, such as Walmart or grocery store gift cards.
  3. Gift cards or gift certificates to restaurants.
  4. Gift cards to the college bookstore.
  5. Virtual gift cards such as Amazon.
  6. Paper gift certificates are considered the same as gift cards.
3. Gift Card Log: Log to record gift information required by the Business Office to be able to issue applicable Form 1099 to the recipient unless a separate account code is utilized, if required.
4. Custodian: Individual charged with physically maintaining and securing the gift card instruments.
5. PI: Principal Investigator, if applicable for a grant.
6. IRS B Notice: Notice provided to employers indicating incomplete or incorrect data on IRS forms.
7. Form W-9: The form identifying the taxpayer identification number (TIN) and certifications required by the IRS.
8. Form 1042: Form completed by the college for annual withholding for U. S. source of income for foreign persons.
Policy/Guideline
This policy must be adhered to by all faculty and staff.
1. Gift cards may be allowed in situations where it is determined that expenditures are in the best interest of Roane State Community College (RSCC) and promote the purposes of the college. The determination of whether a gift card is allowable is dependent upon the selection of the recipient, the reason for the gift, the source of funding, and the recipient’s affiliation to Roane State.
2. Gift cards, regardless of the value, are considered cash equivalents by the Internal Revenue Service and are subject to tax reporting. Departments purchasing and distributing gift cards are responsible for compliance with IRS regulations and Roane State policies.
3. When Gifts Cards May Be Purchased
  Gift cards must have a value of $100 or less. Individual gift cards may not have a face value greater than $100 without prior approval from the Vice President of Business and Finance. Multiple gift cards may not be given to the same individual for the purposes of circumventing the $100 limit rule. Gift cards may be purchased under the following circumstances:
  1. A gift card may be purchased if it is not for a specific person, but for an approved event prize. These gift card purchases are limited to the departments under the supervision of the Director of Student Success, Director of Student Activities, Director of Institutional Research, Director of Recruitment, Directors of Campus Sites and also Grant managers when allowed within the grant. Exceptions will be made only with the approval of the Vice President of Business and Finance.
  2. Gift cards are limited to students only.
  3. Gift cards may be purchased as a thank you for a volunteer as long as the volunteer is not a college employee (temporary student employees are eligible) or a contractor currently under contract.
  4. The use of gift cards for sponsored project participants is permitted as incentives or awards of externally-funded sponsored project participants as described in the grant proposal. If the gift card was not described in the grant proposal, the purchase of a gift card on a sponsored project requires prior written approval from the sponsor. If prior approval is not obtained, the gift card purchase is not allowable on the grant. Gift cards for grant participants are limited to the $100 limit rule; however, if written into the grant the Vice President of Business and Finance will approve, but documentation on the purchase should reflect sufficient documentation.
  5. All other gift card purchases will be considered during the approval process.
4. When Gifts Cards May Not Be Purchased
  1. Gift cards may NOT be purchased for college specifically identified active non-student employees, or consultants employed by the college.
  2. Gift cards may NOT be purchased as gifts for graduating students.
  3. Gift cards may NOT be purchased as holiday or other gifts to employees or students.
  4. Gift cards may NOT be purchased to pay suppliers and consultants for goods and/or services received.
Procedures
The purpose and purchase of gift cards must be pre-approved by the Vice President of Business and Finance or their designee due to the fact that gift cards are the equivalent to cash and can have income tax implications.

The unit/department requesting the purchase of gift cards is responsible for overseeing gift card controls in the department. They are also responsible for safeguarding the gift cards at all times and for reviewing and reconciling the gift card purchases. The unit/department is responsible for obtaining and assuring the accurate completion of the W-9 form, if necessary, and submitting the completed form to Accounts Payable.
1. Obtaining Approval for Purchase
  1. Each requisitioner must verify and provide documentation either for the purpose or grant allowed expenses prior to obtaining gift cards.
  2. Instances where gift card purchases occur before approval is obtained may not be considered for reimbursement.
2. Purchasing a Gift Card
  1. Directors or grant managers must sign a Gift Card Purchase Agreement form which should be on file before the first gift card purchase.
  2. Gift cards may be purchased by using a purchase order. A purchase requisition with the appropriate approvals must be submitted through the normal requisition process. All supporting documentation should be attached including the Gift Card Purchase Agreement form and any supporting grant documentation. Requisitions should only be prepared for gift cards anticipated to be disbursed within 30 days.
  3. Individual gift cards may not have a face value greater than $100 without prior approval from the Chief Financial Officer or their designee unless grant allowed with documentation provided.
  4. Gift card purchases must meet all applicable purchase requirements as determined by the college’s purchasing manual.
Maintaining and Distributing Gift Cards
1. When gift cards are purchased, the Directors/Grant Managers must maintain documentation of the card number, card amount, recipient, and date of distribution recorded on the Acknowledgement of Gift form.
2. Grant managers will be responsible for managing the cumulative amount for a participant. If the amount goes above $599.99, they need to work with student services/human resources to make sure the social security number is on file.
3. The student receiving the gift card must complete the Acknowledgement of Gift form upon receiving the gift card.
4. Until disbursed, cards should be maintained in a secure, locked area.
5. The college is required to report payments exceeding $599.99 to US residents on Form 1099 and to foreign nationals on the appropriate Form 1042.
6. Any cards distributed to students enrolled for credit for supportive services or prize awards, may effect a student’s unmet need which as a result could alter the amount of aid they receive. Financial Aid office should be notified with a copy of the Acknowledgement of Gift form.
7. Acknowledgement of Gift form must be submitted to the Purchasing Office within 10 days of the final distribution. The documentation will be attached to the specific purchase order.
8. All cards should be distributed within 30 days or an explanation will need to be provided to the Purchasing Office with plans to distribute remaining cards in a timely manner.
Securing the Social Security Numbers for Gift Cards
Social Security Numbers (SSN) are considered personally identifiable information (PII). The collection and use of social security numbers has been approved as part of the Gift Card policy if necessary, but must be maintained securely.
Exceptions by the Chancellor/President
The Chancellor may suspend or revoke an institution’s ability to use gift cards under this policy. The suspension or revocation would normally be for non-compliance with the policy or other audit issues related to gift card usage. The college president may make other exceptions to the policy as deemed necessary including suspending or revoking a division’s ability to use gift cards under this policy.

TBR Policy Reference: 4.02.10.20

Original Date Effective: 09/09/2024

Original Approval By: Christopher L. Whaley, President

Office Responsible: Vice President for Business & Finance

Roane State Community College

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