Handbook of Business Procedures

14.4. CASH PRIZES

A. Definition

Generally, a Cash Prize is a monetary award given to an individual as part of a judged competition. Cash Prizes are issued without restrictions on how award funds may be used. Neither financial need nor academic merit are considered when selecting a Cash Prize recipient. Cash Prizes may be issued to UT students, students of other institutions, or the public, depending on the eligibility requirements of the competition. Cash Prize amounts issued to non-employees are reported on a 1099-MISC tax form if they meet the cumulative reporting threshold of $600 in a calendar year.

B. Payment of Cash Prizes

Cash prizes awarded to nonemployee individuals must be processed using the FRMS Awards System. The following documentation must be sent to the Scholarship and Fellowship Services section of Accounting and Financial Management, in the order below, for a cash prize to receive final approval:

• A copy of the SS1 document cover sheet
• Documentation about the competition that includes eligibility information (e.g., a contest flyer, printed web page, etc.)
• A documented list of winners including their name, the amount of the prize received, and their EID (if applicable)

Send all documentation to the Scholarship Services Dropbox

C. Restrictions

The following prizes cannot be processed through the FRMS Scholarship/Fellowship System:

• Prizes issued to entities (i.e., not an individual); these must be processed on a *DEFINE VP2 document.
• Awards issued to an employee in relation to the performance of job duties; these must be processed through Payroll.
• Purchases of merchandise prizes; these must be processed on a *DEFINE VP1 or VP2 document.

For more information about how to process these types of payments, see the Handbook of Business Procedures, 9.1.8 Awards.

Part 14. Scholarships, Fellowships, and Cash Prizes - Table of Contents