Business Meals, Hospitality and Gifts Policy
Persons at EMU are entrusted with the use of funds from a variety of sources to be used in a variety of ways to accomplish EMU’s mission and carry out EMU’s programs. Some funds are used for business meals, hospitality and gifts for employees, students, donors, and other constituents. This policy provides guidelines intended to promote uniformity, accountability and transparency.
This policy identifies how and when expenses may be charged to various college accounts in order to ensure the proper use of university resources and compliance with federal and other external regulations. It further provides a means to document the business purpose of the activity in accordance with tax and accounting guidelines.
As with any university expense, the costs incurred are expected to be reasonable and necessary in nature, be authorized by appropriate individuals and be consistent with the mission of the university and the conditions specified by external sources, when applicable. The primary guiding principle should be the need to make individual decisions in light of the community good. For each use of funds, we need to ask, “Is this an appropriate use of resources, especially student tuition, and does it further the university’s mission?”
See the university Travel Policy for expenses incurred while traveling away from EMU on university business including the handling of business meals with colleagues while traveling.
All university funds, including gifts, grants, and contracts, shall be used in a reasonable and prudent manner and only for activities related to EMU’s mission. University funds shall not be used for purposes that are personal in nature or that do not have a clear business purpose.
Faculty and staff should also be aware that in most cases the expenses described below are not allowable as charges to federal grants and contracts.
A. Business Meals
Faculty, staff and students may be reimbursed for approved, necessary and reasonable business meal expenditures.
Business meals are those taken with business associates, university guests, job applicants, professional colleagues, or donors, during which university business discussions take place. Whenever possible, such meetings should take place in university facilities, although it is recognized that current university facilities may not be adequate for some purposes. Business meals also are those taken with other employees when, to ensure privacy and confidentiality, business must be conducted off campus. When authorized by the department head, business meals also may be taken for the purpose of employee recognition or reward.
Original detailed receipts are required for all business meal expenses of $25 or more. The detailed receipt and documentation information is required for all types of payments including reimbursement requests, JP Morgan VISA charges, and invoice payments. A detailed receipt and/or the form may be useful in handling an expenditure less than $25, but is not required.
Meals taken between two or more employees without a clear business purpose, which ordinarily could be conducted during normal working hours, are not reimbursable from any university funding source. The cost of such meals should be borne by the employees.
Expenses incurred in relation to the following events are considered to be personal in nature and therefore not reimbursable: parties or meals for birthdays, weddings, births and showers.
B. Gifts and Hospitality
University departments may incur an expense, in the form of a gift, on behalf of an employee or an employee's immediate family, for the following events:
a) Recognition of a long-term employee leaving a department or retiring from the university. A general guideline is $10.00 for every year of service. Such gifts should not exceed $400, the maximum non-taxable limit established by the IRS. The amount of any such departmental gift should also be reduced for the amount of any gift awarded or to be awarded by the university at the annual recognition banquet.
b) Illness of an employee or student, requiring hospitalization.
c) The death of an employee or an employee's immediate family member. Memorial gifts made on behalf of an employee may include flowers or a donation to a charitable organization. In such cases, EMU should be acknowledged as the sender, e.g., "from all your friends and colleagues at (university department)." In the case of a donation to a charity, the notation should indicate that the donation is from the university department. A recommended limit for this gift is $50.00.
Gifts in recognition of employee work-related achievement or years of service are allowable as provided through official recognition programs authorized by the Human Resources Department. Any exception to this policy must be authorized at the vice president level.
Holiday gifts for faculty, staff, students and volunteers are unallowable.
Gifts to honor an individual for personal reasons (e.g. birthday, wedding, baby shower, housewarming, promotion, etc.) other than those indicated above may not be charged to university accounts. Personal contributions among colleagues should be the method of providing such gifts.
Refreshments provided at university or departmental business activities such as staff meetings, employee “farewell” receptions, committee meetings, business presentations, or in honor of university guests are allowable. Such expenses should be kept to a reasonable level of cost and occurrence.
Certain functions and events are considered business entertainment if they are intended to provide hospitality to individuals outside the university and are considered necessary and customary in furthering the university's interests.
Examples of business entertainment include:
- receptions for university guests and visitors
- alumni reunions or similar alumni events
- events for donors or prospective donors
- welcoming receptions for parents and students
Valid entertainment expenses are those incurred for business entertaining where food and beverages, catering services, banquet facilities, decorations and musical groups may be used or present.
In planning entertainment for guests of the university, all efforts should be made to keep costs to a reasonable level in relation to the nature of the event. The understanding of the university with its food service provider (Pioneer College Caterers) is that they will be given the first opportunity to provide service for any catered event on campus. Use of an outside caterer should only occur with the consent and permission (in writing) of Pioneer College Caterers. An outside caterer must provide a certificate of insurance showing adequate liability insurance coverage prior to providing service on campus and must provide a tax identification number on U S Treasury Form W-9.
D. Alcoholic Beverages
The use of alcoholic beverages on campus and at any EMU sponsored event is strictly prohibited. No university or grant funds of any type may be used toward the cost of alcoholic beverages.
E. Employee Events
Expenses associated with employee business events, (e.g. receptions, open houses, retreats) complementary to the department's mission and goals, or that foster a sense of community among faculty, staff and students are allowable. Expenses would normally include food and beverages, facility rental and catering services.
Expenses associated with personal events, (e.g. birth of a child, wedding, anniversary, birthday, etc.) are not allowable. Costs for such events should be borne by the participants or by management personally on behalf of the participants.
Annual holiday parties and summer picnics are allowable provided they are reasonable in scope and available to all employees within the department. While such events play an important role in our university community, it is also important that fiscal responsibility be a priority in planning these events. The current spending guideline for such events is $20 per person per fiscal year.
F. Documentation & Authorization
The university's Business Meals and Hospitality Form is optional and is provided as a convenient way to ensure that all required information is included. This form is designed to meet the IRS requirements for documenting business expenses, namely to provide a record of the time, location, participants and business purpose of the activity. If requests for reimbursement or payment are submitted without complete information, they will be returned along with a request to complete the form.
Expenditures for business meals, gifts, employee meetings, and business entertainment shall be approved by the department head or his/her authorized representative(s) only. Reimbursement directly to the department head must be approved by the supervisor, or authorized representative of the supervisor.
The Controller and/or Business Office personnel have the authority and responsibility to question, or request additional information concerning, the business purpose, support documentation or reasonableness of the expense if documentation (in their opinion) is incomplete, and may request approval by a vice president prior to reimbursement even when that approval is not needed under the regular purchasing policy.
G. Expenditure Codes
For all expenses listed in this policy, use the following accounting sub-codes:
6400 - Business meals. Reimbursement or direct payment for business meals and food items.
6450 - Gifts & recognitions. Direct payment or reimbursement for gifts of flowers, donations, employee achievement, etc., in accordance with this policy.
For business events processed through university dining services, use code 6400.
Exceptions to any of the provisions stated in this policy require written documentation and approval. A memorandum or related document justifying the request for exception must be approved by the vice president for the department making the request and submitted to the Business Office prior to any reimbursement or payment. Approval for exceptions involving a vice president must be granted by the Provost or president. Responsibility lies with the requestor to obtain all necessary approvals before submitting documentation to the Business Office for payment or reimbursement.
The vice president for finance is responsible for this policy.
This policy shall be reviewed every five (5) years.
This policy shall be distributed via the Faculty/Staff Handbook
Approved by President’s Cabinet
May 9, 2007