Prize and Award Authorization / Project Assignment

Policy No: 
1.10
Type of Policy: 
Administrative
Last Revised: 
July 2006
Review Date: 
September 2016
Contact Name: 
Carol Gibson
Contact Title: 
Controller
Contact Email: 
cgibson@gatech.edu
Reason for Policy: 

The following procedure is intended to explain the method of authorizing payment of a prize or award and establishing a sponsored project in the accounting records of the Georgia Institute of Technology to charge expenditures related to prizes or awards.

Policy Statement: 

The Office of Grants and Contracts and/or the Accounting Services Office are charged with the establishment of sponsored projects in the Chart of Accounts and the accounting records of the Georgia Institute of Technology upon receipt of properly authorized/approved budgetary and invoicing documentation. Accounting Services is additionally charged with the review and approval of prize and award payments issued by the Georgia Institute of Technology. Requests for payment should include a valid GIT project number from which the payment should be made and must include adequate documentation describing the purpose of the payment (e.g. annual staff award, prize for participation in special program, etc.) Funding should come from sources that permit the prize and award payments, such as Georgia Tech Foundation and Georgia Tech Research Corporation, etc. NO STATE FUNDS ARE ALLOWED TO PAY PRIZES AND AWARDS.

Procedures: 

Prize and award recipients who have been employed in the current calendar year should be submitted on the prize and award form that can be obtained from the payroll department. Payroll Prize forms should be forwarded to Accounting Services for approval. The following steps will be taken upon receipt of a request for issuance of an award or prize:

  1. The Accounting Services Department will initially verify the purpose of the prize or award. The requesting department must include a description of the reasoning/rationale for the prize on the request form and attach any/all supporting documentation (e.g. attach a notice of annual competition.)
  2. The Accounting Services Department will review the request for an authorized sponsored project number to be charged for the prize and award. If this information is not clearly identified on the request, the initiating unit will be contacted in order to determine the project number. If no funding source can be identified, the request will be returned to the initiating department. If a project does not already exist in the accounting records of the Institute, the initiating department must request to establish a new sponsored project. If funding is from either the Georgia Tech Foundation or the Georgia Tech Research Corporation, instructions for establishing projects should be followed as described in the Policy and Procedure Manual. If funding is from external sources, a sponsored project should be initiated and requested through the Office of Sponsored Programs.
  3. The Accounting Services Department will verify budget availability prior to the approval of prize and award payments. The initiating department is responsible for all costs incurred if payments are not reimbursed from the designated sponsor. The departments should read the instructions carefully on the award and prize forms when calculating the award amount and estimated total department's expenditures. For more information regarding tax withholdings, refer to Payroll procedure “10.12 Employee Awards and Prizes”.
  4. Upon completion of the review of the prize or award request, the approved form will be forwarded to the appropriate office for payment.
    1. Forms for awards and prizes to recipients who have been employed in the current calendar year will be forwarded to the Payroll Department for payment. The Payroll Department will first verify GIT employment for the recipient. Payments will be posted to the accounting records as extra compensation -- account code 511910. The Employer portion of FICA at 7.65% should be included in the budgeted amount for payments to these recipients. Refer to Payroll procedure 10.12 regarding the gross up amount of award if the department is willing to absorb expenses for the employee's income taxes and FICA withholdings. Payment can either be added to the employee's next scheduled payroll or checks will be distributed to initiating departments.
    2. Payments made to prize and award recipients who have not been employed in the current calendar year will be processed through the Accounts Payable Department. A check in the award amount will be issued to the recipient using the account code 751120 for such payments. No tax will be withheld, but the recipient may receive a 1099 form if annual payments meet/exceed certain levels established by IRS guidelines. Recipients that have been classified as “non-resident aliens” may be taxed unless a current tax treaty exists between his/her home country and the United States. The department is required to provide the recipient's GTID on the prize form.