Part 9. Expenditure Policy
Policy Number: 9.3
Issued by: Office of Accounting
Date Issued: April 20, 2005
Approved By: B. Gutierrez, Assoc. VP & Controller
Part 9.3 ENTERTAINMENT AND OFFICIAL OCCASION EXPENSES
A. Entertainment Expenditures
Entertainment expenditures should be related to one or more of the following purposes:
- recognition or promotion of academic achievement, athletic achievement, scholarship, and/or service to the institution;
- promotion or communication of intellectual ideas and/or exchange of administrative and operational information on the institution’s programs or activities;
- support of institution-sponsored student events and activities;
- recruitment of students, faculty, staff;
- assistance to the Regents, accrediting agencies, officials from other institutions, etc.;
- support of a program of continuing education.
B. Official Occasions
An “official occasion” is defined as a reception, luncheon, dinner, or similar event that is sponsored and funded by The University of Texas at Austin. Examples include conferences, meetings, planning retreats, staff meetings, and other similar activities. These functions are normally associated with special programs or conferences, University guests, faculty and staff recruitment, or business meetings that span the lunch hour.
C. Reimbursements for Official Occasion and Entertainment Expenses
Expenses incurred for official occasions and entertainment may be reimbursed according to the Expenditure Policy for the appropriate type of expense.
D. Oversight of Entertainment Expenditures
Oversight of entertainment expenditures is required at the senior administrative level, i.e. by vice presidents and deans. Authority may be delegated for approval of charges under $100 to associate/assistant vice presidents, associate/assistant deans, or department heads.
Delegates may not approve their own expenditures. Furthermore, authority may be delegated for greater amounts if reports of these activities are prepared for review by the vice president or dean at least quarterly. Reports should be signed and dated by the vice president or dean.
Contact the Accounts Payable manager at 471-1816 for documentation required to delegate authority. If delegation changes, new documentation should also be sent to Accounts Payable.
Additional requirements for entertainment expenditures may be promulgated by the Unit Business Officer.
E. United States Internal Revenue Service (IRS) Requirements and Restrictions
IRS requirements and restrictions for awards are as follows:
1. Employee Awards
a. Cash Awards
Awards of cash to employees for any amount must be processed through Payroll Services. Cash awards paid to employees must be part of an authorized awards program that has been approved in advance by the applicable dean or vice president. The department must state the frequency, amount, account, nature, and selection criteria to be used.
b. Gift Certificates and Gift Cards
Gift certificates and gift cards for any amount are disallowed for employees. These items are taxable to the recipient, and it is administratively infeasible to assess and collect the required taxes and fringe benefits.
c. Merchandise
Employee merchandise awards exceeding a fair market value of $50 must be included in the employee’s taxable income, unless the award is for length of service or for safety achievements. The value is determined by purchase price unless the item has been personalized (inscribed), which will make the fair market value zero. Merchandise awards in excess of $400 given for length of service or for safety achievements must be included in the employee’s taxable income. Length of service or safety achievements awards must also be awarded as part of a meaningful presentation, and awarded under circumstances that do not indicate that the payment is disguised compensation. Employee’s UT EID must be included with the payment document that is sent to The Office of Accounting for approval.
d. Use of Procard
The Procard may be used to purchase merchandise awards for employees if preferred. Departments must provide a list of amounts and employee UT EIDs to Payroll Services if award is over the $50 fair market de minimus amount or is not a length of service or safety achievement award.
e. Athletics-Related Awards
Athletics-related awards that exceed fair market value of $50 are monitored by the Athletics Business Office and reported annually to Payroll Services to be included in the employee’s W-2.
2. Non-Employee Cash or Non-Cash Awards Exceeding a Fair Market Value of $50
The value is determined by purchase price unless the item has been personalized (inscribed), which will make the fair market value zero.
Award recipients must provide their permanent mailing address and Social Security number for issuance of 1099-MISC form for awards that exceed a fair market value of $50. This information must be included with the payment document that is sent to The Office of Accounting for approval.
The Procard may be used to purchase gift card/gift certificate awards and merchandise awards for non-employees if preferred. Departments must provide award recipients’ permanent mailing address and Social Security number, VP7 document ID, and award amount to The Office of Accounting, Contractor Services (campus mail code K5300) if award is over the $50 fair market de minimus amount.
Department must keep a log of cash awards and gift card/gift certificate awards, regardless of amount or method of payment, which includes the awardees name, explanation of award, and the VP document number.
Awards presented outside the United States to non-US citizens/residents are not reportable, and no tax information is required.
Athletics-related awards that exceed fair market value of $50 are monitored by the Athletics Business Office and reported annually to The Office of Accounting if awards collectively total $600 or more.
3. Gift Certificates and Gift Cards for Student Employees
A gift certificate/gift card can only be awarded to a student who is also an employee if the gift certificate/gift card is awarded based on their role as a student, and it must be awarded in accordance with the non-employee policy (see section E.2 of this policy). Gift certificates and gift cards are disallowed for student employees if the award is based on their role as an employee.
F. Voucher Requirements
1. Supporting Documentation Requirements
a. Official Occasion Expense Form (OOEF)
An Official Occasion Expense Form (OOEF) should be submitted with corresponding receipts at the time the voucher is submitted for payment. The form includes the date of the activity, location, participants and/or group attending, purpose, benefit, funding source to charge, and required approval(s). Departments may use a form of their own design as long as it includes the same information as the Official Occasion Expense Form.
Departments may enter the required information in the Notes section of the *DEFINE document instead of supplying an OOEF. However, the Dean/Vice President or authorized delegate must be included in the electronic routing of the document.
b. Approval to Serve Alcohol in Campus Facilities
Advance approval by the Executive Vice President and Provost is also required to serve alcohol in campus facilities, including leased spaces. This approval must be submitted with the Official Occasion Expense Form. Vouchers will be rejected if the Provost's prior approval has not been obtained. Contact the Provost's Office at 232-3317 for guidelines and approval.
c. Procard
When using the Procard for official occasion-related items, departments must attach a signed Official Occasion Expense Form (OOEF) for each purchase and include the form as a basic part of the back-up documentation retained for Procard at the departmental level.
If purchasing alcohol from grocery stores using the Procard, the OOEF requires advance approval by the applicable dean, vice president, or delegate. University employees are not authorized to use the Procard to buy alcohol at package stores, nor are they authorized to use the Procard at restaurants.
d. Itemization of Expenses
An “itemized” receipt is required for meals, and receipt must include the number of attendees. If itemized receipt is not available, a statement must be included and signed by the employee, and the Unit Business Officer must approve expense.
All other consumable and non-consumable items, such as those purchased from grocery or department stores, must be itemized without exception.
2. Voucher Coding
Entertainment and official occasion expenses should be paid on VPE documents using the appropriate object codes. Coding and document processing questions can be directed to Accounts Payable.
Code 1327—Business Meetings
Cost of food, beverages, flowers, and related expenses for working business meetings, luncheons, and dinners; faculty and staff retreats; staff meetings; staff recruitment functions; and similar University activities where University business is conducted.
Code 1323—Official Occasions
Cost of food, beverages, catering charges, waiters, decorations, flowers, invitations, room rentals, and other expenses associated with official occasions. The event is usually a reception, lunch, or dinner hosted by an administrative officer. Many events are associated with development activities (donor receptions, fundraising activities, etc.). Others are scheduled to honor faculty, staff, or University guests.
Code 1324—Meals, Refreshments, and Expenses for Conferences, Workshops, and Seminars
Cost of food, beverages, flowers, and related expenses associated with conferences, workshops, seminars, and contract and grant programs. This object code should not be used for payments to speakers, travel costs for speakers, and participant support fees.
Code 1302—Club Dues
Cost of club memberships and monthly dues. An Official Occasion Expense Form is not required for this type of expense; however, membership approval letter is required.
Code 1329—Flowers Others–Individuals
Cost of flowers to or for individuals not associated with a UT -funded event, i.e. to honor the deceased or for congratulations. An Official Occasion Expense Form is not required for this type of expense.
Code 1527—Awards–Employees (Non-cash)
Cost of non-cash awards for employees. Awards of cash to employees must be processed through Payroll Services. Gift certificates and gift cards for any amount are disallowed for employees.
Code 1528—Awards–Non-Employees (Cash and Non-Cash)
Cost of awards to non-employees. Social Security number and permanent mailing address must be reported for gift certificates/gift cards and merchandise awards in excess of $50 for non-employees for issuance of 1099-MISC form.
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