Go to Other Policies - Accounting Department

POLICY

Hospitality expenses may be paid with university funds to the extent that the purchase and use of these services and items is consistent with the mission and fiduciary responsibilities of the university.  This policy applies to activities that promote the university to the public and the provision of hospitality in connection with official university business and specifies the university funds that may be used for such purposes.

AUTHORITY

Executive Order No. 761, California Code of Regulations, Title V, Division 5, California Code of Regulations, Sections 41600, 41601; California Education Code Sections 66600,89030, 89035, 89044; HR 96-11.

Definitions

Approving Authority – a person to whom authority has been delegated in writing to approve expenses in accordance with university policy.  
Auxiliary Organization Funds – funds held by a recognized auxiliary organization.
Award – a gift of tangible personal property in recognition of service or achievement directly benefiting the university.  
General Fund Appropriations – funds approved to the university by the state legislature for support expenditures of the university.

Gift – something of value given or bestowed upon an individual, group, or entity with the expectation of benefit accruing to the university.

Hospitality – the provision of meals (catered or restaurant) or light refreshments (beverages, hors d’oeuvres, pastries, cookies, etc.), promotional materials, gifts, and travel expenses of official guests of the university.  Hospitality includes expenses for activities that promote the university to the public, usually with the expectation of benefits accruing directly or indirectly to the university and may include the provision of gifts, awards, and promotional materials.  

Official Host – a university employee who hosts a meeting, conference, or event.

Official Guest – a person invited by an official host to attend a university meeting, conference, reception, or event.  Examples of official guests include employees from another work location, members of the community, or media representatives.  Employees of the university are not considered official guests.

Promotional Materials – a gift of tangible personal property that is distributed to promote the name or image of the university, to provide information, or enhance university productivity.  Promotional items are of minor value and bear the logo or other icon or information identifying the university such as a pen, folder, calendar, or clothing.

Special Funds – funds authorized for support of activities that are supplemental to the primary mission of the university and are paid for by fees and revenues other than general tax revenues.  Special funds include, among others, Reimbursed Programs, Continuing Education Revenue Funds, Lottery Education Funds, Parking Funds, Housing Funds, Trust Funds and Special Project Funds.  

Work Location – the place where the major portion of an employee’s working time is spent, or the place to which the employee returns during working hours upon completion of special assignments.

PROCEDURES:

Allowable Expenses and Occasions

Payments or reimbursements of hospitality expenses must be directly related to, or associated with, the conduct of official university business.  When a university employee acts as an official host, the occasion must, in the best judgment of the approving authority, serve a university business purpose, with no personal benefit derived by the official host or other university employees.  In addition, the expenditure of funds for food should be reasonable and in accordance with the best use of public funds.  Examples of allowable expenses are listed below.

Payment or reimbursement is not permitted for the following types of occasions: employee birthdays, weddings, anniversaries, farewell gatherings, holiday celebrations, and occasions such as Secretary’s Day.

When determining whether a food expense is appropriate, the approving authority must evaluate the:

a.   Importance of the event in terms of the costs that will be incurred;

b.   Benefits to the university which will be derived from such an expense;

c.   Availability of funds;

d.  Alternatives that would be equally effective in accomplishing the desired objective.

Hospitality expenses, including awards and gifts, must conform to IRS regulations.

Examples of Allowable Food Expense

Host to Official Guests

When the university is host to official guests, including visitors from other universities, members of the community, or university employees visiting from another work location, the cost of meals or light refreshments may be reimbursed.  Activities may include but are not limited to campus receptions, public ceremonies, and advisory committee meetings concerned with various aspects of the campus instructional program.

In addition, such costs may be reimbursed for prospective employees seeking positions with the university.

Meetings of a Learned Society or Organization

When the university is the host or sponsor of a meeting of a learned society or organization, the cost of light refreshments may be reimbursed.

Meetings of an Administrative Nature

  When meetings of an administrative nature are sponsored by the university (that is directly concerned with the welfare of the University) the cost of meals or light refreshments may be reimbursed depending on the funding source.  The meal must be a necessary and integral part of the business meeting, not a matter of personal convenience.

Qualified meetings, which include food and beverages purchased by Special Funds, should last at least six hours and the agenda should include a working meal. General Fund Appropriations may not be used to pay for food and beverages for business meetings attended only by employees of the same work location.

Receptions

The cost of meals or light refreshments may be reimbursed, depending on the funding source (see Table 1), for University hosted receptions.  Qualified receptions are receptions held in connection with conferences, meetings of a learned society or organizations, fundraising events, meetings of student organizations and groups, employee recognition or length of service awards, retirement presentations or benefits for employee morale, student events such as commencement exercises and meeting of other university related groups such as alumni organizations.    

FUNDING SOURCES

Hospitality expenses may be paid from various university funds sources, subject to the rules outlined below and the restrictions previous identified.  It is the responsibility of each Vice President  to ensure that all funds are used in accordance with this policy.  There are three kinds of funds available for the payment of hospitality expenses, General Fund Appropriations, Special Funds, and Auxiliary Organization Funds.

General Fund Appropriations

  The following restrictions, in addition to those identified in Table 1, apply to the use of General Fund Appropriations:

·         General Fund Appropriations may not be used to pay for alcoholic beverage or tobacco purchases, gifts, or awards. 

·         General Fund Appropriations may not be used to pay for food and beverages for business meetings attended only by employees of the same work location.

·         Any expenditure prohibited by statute including the California Budget Act.

  Special Funds

  The following restrictions, in addition to those identified in Table 1, apply to the use of these Special Funds:

·         Special Funds may not be used to pay for alcoholic beverages, tobacco products. Gifts and awards to the extent these purchases are not restricted by other applicable laws, regulations, or agreements may be purchased.

·         Special Funds may be used to pay for food and beverages for business meetings attended only by employees of the same work location.

·         Trust Funds and Special Project Funds may be used to pay hospitality expenses only to the extent  permitted by the statute under which the funds are established and maintained and any trust agreement or special project agreement.

·         Federal or local government contract and grant funds may be used to pay hospitality costs only if such expenses are specifically authorized in the contract or grant, or by agency policy, and only to the extent and for the purposes authorized.  In the event of a conflict between agency and university policy, the stricter of the two policies shall apply.

·         No alcoholic beverages or tobacco products may be charged to State or Federal funds.

Auxiliary Organization Funds

Auxiliary Organization Funds may be used to fund hospitality but only within the restrictions established by the auxiliary organization.  In the event of a conflict between the terms of the Auxiliary policy and university policy, the President or his designee shall determine which policy shall apply.

Alcoholic beverage or tobacco purchases, gifts, and awards may be charged to Auxiliary Organization Funds subject to the policies and restrictions established by this policy and the auxiliary organization.

Table 1.

Funding Sources for Payment of Hospitality Expenses

  Approval of Transactions

The President has delegated authority to each Vice President to approve hospitality expenses; however, the President must approve hospitality expenses of each Vice President.  Individuals with delegated approval authority may not approve their own expenses and individuals may not approve expenses of their supervisor.

The request must be completed on the Business Meal Approval Form one week prior to scheduling the event.  The completed request must specify the following:

a.   Type and date of event

b.   Type of food expense (e.g., breakfast, lunch)

c.   Department name and chargeable account number

d.   Number of participants (with attached guest list)

e.   Estimated cost per person

f.    Nature of the occasion or purpose of the meeting

g.   Vendor providing the food

h.   Signature of approving authority

TRUST FUNDS

Various non-State funds controlled by the university may be used to fund official business, but only within the restrictions set forth in this policy.  In the event of a conflict between the terms of the fund and university policies, the more restrictive of the two policies shall apply.  Alcoholic beverages may not be charged to state special funds.  Expenditures from trust funds are restricted to the purpose for which the trust fund was established.  Expenditures for food must be included in the trust fund description to allow for such expenditures.

Payment Method

      OFF CAMPUS MEETINGS 

When business-related food purchases are made in conjunction with an off-campus meeting, a purchase order or contract must be established in advance through the Purchasing Department.  The completed Business Meal Approval Form and list of attendees must be submitted to Purchasing no later than one working day after submitting the requisition.

Reimbursement may be issued to a campus employee or faculty member acting in the capacity of host to an official guest, visitor, or prospective employee (as described earlier).  In these instances, payment must have been made by personal credit card, personal check, or cash.  Under no circumstances will a cash advance be provided.  The employee or faculty member authorized to expend funds must submit to Accounts Payable a request for personal reimbursement using the Direct Pay Form.  Attach the itemized receipt, completed Business Meal Approval Form, and guest list.  The Direct Pay form must be signed by the responsible Vice President.

      ON CAMPUS MEETINGS

  A completed Business Meal Approval Form and list of attendees must be presented to the Accounting Office for payment.  Foundation Food Services (Sodexho) must be used for on campus events unless a waiver has been approved and signed by the Food Services General Manager or Manager. 

THE UNIVERSITY PROCUREMENT CARD CANNOT BE USED FOR FOOD PURCHASES OF ANY KIND.

Responsibilities

Vice Presidents

Responsible for reviewing, restricting, and approving expenses and occasions.

Requesting Departments

Responsible for seeking appropriate approvals and providing documentation when requesting reimbursement.

Purchasing Department

Processing orders for off-campus food services and maintaining the documentation associated with the requisition.

Accounting Department

Responsible for paying invoices in a timely manner and storing invoices/required documentation associated with the invoice.