Governance Scope: All Full-Time, Part-Time, and Contract Employees
1. Purpose & Policy Overview
This policy establishes official guidelines for authorized employees of Family Promise of Puget Sound to use personal funds or personal payment cards for necessary, direct operational and program expenses on behalf of the organization.
2. Authorization of Personal Funds Usage
Employees are permitted to utilize personal payment methods (cash, personal debit, or personal credit cards) for minor, pre-approved business purchases (e.g., shelter supplies, minor maintenance hardware, or immediate client needs).
3. Employee Benefit: Credit Card Points and Rewards
* Accrual of Personal Rewards: Employees who utilize personal credit cards for authorized Family Promise of Puget Sound expenses are explicitly permitted to accrue and retain all personal card rewards, cashback, or airline miles generated by those transactions.
* No Liability to the Organization: The retention of rewards by the employee causes no additional financial liability, increased cost, or tax burden to Family Promise of Puget Sound.
* IRS Compliance: In accordance with standard IRS interpretations, rewards earned on personal expenditures reimbursed under an Accountable Plan do not constitute taxable income to the employee.
4. Accounting & Short-Term Loan Treatment
To comply with GAAP and maintain audit-ready general ledger records:
1. Short-Term Liability Entry: Out-of-pocket employee expenses are logged in the accounting system as a credit to Employee Payables (a short-term liability), representing a temporary short-term loan extended by the employee to Family Promise of Puget Sound.
2. Expense Classification: The purchase is debited immediately to the appropriate program or administrative expense category.
5. IRS Accountable Plan Rules & Reimbursement Requirements
To qualify for tax-free reimbursement, all expense claims submitted to Family Promise of Puget Sound must strictly meet the following requirements:
* Business Purpose: Every purchase must serve a direct, verifiable mission or operational purpose for Family Promise of Puget Sound.
* Timely Substantiation: Employees must submit an itemized receipt, date, vendor name, and stated business purpose within 60 days of incurring the expense.
* Prompt Settlement: Family Promise of Puget Sound will reimburse approved claims within 30 days of substantiation via regular payroll runs or direct disbursement. Reimbursements paid under this plan are non-taxable and will not appear as taxable wages on Form W-2.