2.1 “Entertainment expense” means meal or other entertainment type expense incurred when hosting Employees and/or a non-Employee(s) for business-related reasons. This term includes entertainment expenses paid by or billed to the University on the Employee’s behalf.
2.2 “Reimbursable” means the expense is eligible for reimbursement by the University.
2.3 “Reimbursement”means payments made to an Employee by the University for substantiated entertainment expenses.
3.1 Authority. Authority to administer these regulations is assigned to the Director of Finance.
3.2 Reimbursable Expenses. In general, only those entertainment expenses which are reported as non-taxable to the Employee may be reimbursed.
3.3 Additional Department Rules. Departments may implement more restrictive internal regulations.
3.4 Special Situations. These regulations are not expected to cover every possible situation. Discuss items of an unusual nature with the Director of Finance before submitting request for payment or reimbursement.
3.5 Restricted Exceptions. Area Heads and/or Major Academic Unit Deans may make exceptions to these regulations in extenuating circumstances, subject to approval by the Director of Finance.
3.5.1 Submit documentation for exceptions to the Director of Finance before entertainment takes place, if possible, or with the request for reimbursement.
3.5.2 An exception shall be overruled when, in the judgment of the Director of Finance:
- It violates applicable laws or regulations;
- It violates University regulations; or,
- There is insufficient justification.
3.5.3 When the Director overrules, the Director will notify the Employee and the individual who made the exception.
3.5.4 In some circumstances, an exception may result in taxable income to the traveler, and reported as noted in 3.6.1 below.
3.6 Accountable Plan. The University’s entertainment expense policies and regulations are intended to be an "accountable plan." This means some entertainment expense reimbursements and direct payments are reported as non-taxable to the Employee, while others are reported as Employee compensation. To be reported as non-taxable, payments and reimbursements for entertainment expenses must meet four requirements:
- Advances and reimbursements made must be for deductible entertainment expenses;
- The amount of any cash advance for entertainment expenses must be reasonably related to the expenses expected to be incurred;
- A statement substantiating the amount, date, and business purpose of the expenses must be submitted by the Employee within 60 days after the entertainment takes place. A properly completed and approved entertainment expense report meets this requirement; and,
- Any portion of an advance in excess of expenses shall be returned to the University within 60 days after the entertainment takes place.
3.6.1 Expenses not substantiated and/or excess advances not returned within 60 days, will be treated as Employee compensation. These amounts are subject to payroll tax withholding, and are reported on the Employee’s W-2 form. The amount shall be shown on the Employee’s pay stub as non-cash compensation and payroll taxes withheld will reduce the Employee’s net pay.
3.7 Requirements. To be reimbursable, entertainment expenses must be ordinary and necessary and must meet the guidelines described in Section 3.8 or 3.9.
3.7.1 An ordinary expense is one that is common and accepted in the academic or administrative areas of higher education.
3.7.2 A necessary expense is one that is helpful and appropriate, although not necessarily required, for the University.
3.8 Directly-related to University Business.
3.8.1 This guideline considers whether the:
3.8.2 The guideline considers whether the Employee:
3.8.3 It is not necessary to devote more time to business than to entertainment in order to meet this guideline. However, the business discussion must be substantive. A token mention of business-related topics does not meet the directly-related guideline. Example situations are:
3.8.4 Entertainment expenses are not directly-related if the Employee is not present, or in situations where there are substantial distractions that generally prevent the active conduct of substantive business. Examples of such situations include, but are not limited to a meeting/discussion:
3.9 Associated with the University's Business.
3.9.1 This guideline considers whether the entertainment:
3.9.2 The key factor is whether there was a substantive business discussion. If there was no substantive business discussion, reimbursement of the expense is reported as Employee compensation. To be considered substantive the Employee must be actively engaged to elicit income or some other specific benefit for the University.
3.10 Additional Guidance for Determining if Expense is Reimbursable.
3.10.1 Expenses must be to entertain a former, current or prospective donor, vendor, student or Employee.
3.10.2 The host Employee’s meal cost cannot be reimbursed as an entertainment expense if claimed as a travel expense.
3.10.3 The Employee cannot be reimbursed for expenses considered lavish or extravagant under the circumstances.
3.10.4 Entertainment occurring on the same day as the business discussion is deemed to have been held directly before or after such discussion. If the entertainment occurs on a different day the specific facts and circumstances must be evaluated. Consult with the Director of Finance prior to submitting an expense form and prior to the entertainment, if possible.
3.10.5 Entertainment expenses for spouses are not normally reimbursable. However, if a clear business purpose can be shown for the spouse’s presence, the expenses are reimbursable. For example:
3.10.6 When an expense includes entertainment and other services, it must be allocated between entertainment and non-entertainment expenses. A reasonable basis for the allocation must be used. For example:
3.10.7 When business and non-business individuals are present at an event, the expense must be divided between business and non-business. Only the business portion is reimbursable. An expense not specifically identifiable as pertaining to each individual must be allocated on a pro rata basis.
3.10.8 Only the face value of an admission ticket is reimbursable. Service fees, shipping and handling charges, or any other amounts over the face value of the ticket are not reimbursable.
3.11 Non-reimbursable Entertainment Expenses. Non-reimbursable expenses include, but are not limited to:
4. Requesting Reimbursement. Entertainment expenses are reported by the Employee on the “Entertainment Expense Report.” This form is available in Excel format on the Finance Office web site. The spreadsheet has several formulas to simplify calculations and summarizations. Do not change any of these formulas, or the spreadsheet may not work properly.
4.1 Expense Report Purpose. The purposes of the entertainment expense reports are to:
4.2 Supporting Documentation. Documentation for entertainment expenses shall be submitted with the report.
4.2.1 Original receipts are required for all expenses noted on the report, regardless of amount.
4.2.2 No reimbursement will be made on the basis of a credit card statement, or other statement of account, unless the Employee submits a signed memo giving a full explanation for the absence of original receipts.
4.2.3 Documentation requirements for the expense categories on the report follow:
4.2.4 Receipts shall show, at a minimum, the:
4.2.5 Submission of receipts for all entertainment expenses is required. Expenses not supported by appropriate receipts will not be reimbursed.
4.2.6 Reimbursed entertainment expenses not adequately documented shall be reported as Employee compensation in box 1 of the Employee’s W-2 Form.
4.2.7 The Employee must sign and date the entertainment expense report. The Employee’s signature certifies all expenses reported are valid and were incurred in accordance with University policy.
4.2.8 Appropriately approved expense reports shall be submitted to Accounts Payable. Approval indicates:
5.1 Employees with Payroll Direct Deposit. If the Employee has payroll direct deposit, the reimbursement shall be made by direct deposit to the same account unless the Employee contacts the Director of Finance and requests:
5.2 Employees without Payroll Direct Deposit. These Employees may request direct deposit of entertainment reimbursement by contacting the Director of Finance.