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Section 22 - AS Hospitality Policy

Section 22 - AS Hospitality Policy

Date: 4/2/07, editorial changes 5/13/08 — Approved: AS Finance Board

Purpose

This document provides Associated Students’ policy regarding use of funds used for activities, including hospitality and public relations, directed toward promoting the Associated Students and the University to the campus and public and enabling the Associated Students to act as a member of the state and local communities. Along with campus policy issued September 2002, this document will serve to fulfill the requirement of Executive Order No. 761 for campus-generated written policies and procedures for the payment of hospitality expenses and to fulfill the requirements of §42502(i) of the California Code of Regulations regarding establishment of a campus policy on accumulation and use of public relations funds for auxiliary organizations. Relative to alcoholic beverages and tobacco products, the provisions of the campus policy are more restrictive than those of the Executive Order.

Policy Principle and Objectives

All funds available to the Associated Students — whether received through student fees, donation, or other means — are resources valuable toward achieving the missions of the Associated Students. Therefore:

• Funds identified under this policy shall be expended only upon documented benefit to the University or Associated Students.
• Expenditures providing personal benefit to AS employees or volunteers are acceptable only when there is a clear campus business purpose.
• Discretion associated with these funds increases the need for effective and conservative management. Administrators of these funds are to consider cost, availability of funds, and availability of alternative activities when evaluating the benefits to be derived from expenditure.

Authoritative References

• Campus Policy
• Education Code on the authorities of the Trustees (Sections 66600, 89030, and 89035).
• Education Code and Title 5 regarding campus community relations funds (Section 89044 and Sections 41600 and 41601, respectively)
• Title 5 regarding the authority of the campus president to require auxiliary organizations to operate in conformance with campus policies (SECTION 42402).
• Executive Order No. 761 on Hospitality Expenses.
• IRS Code sections on fringe benefit income (various).

Prohibited Expenditures Regardless of funding source:

• Employee birthdays, weddings, anniversaries, showers, employee graduations and other personal celebrations or acknowledgements.
• Employee farewell gatherings that are not official AS functions. The AS Policy on employee farewell events is attached and is made part of this policy. Official AS functions do not include off-site parties, dinners, or similar events organized by co-workers and friends. [Retirement events are distinct from “farewell gatherings” and are allowed. Refer to the next section for guidance.]
• Tobacco (by campus policy).

Allowed Expenditures

Notes:

• Positive employee morale is a valuable resource. Accordingly, within the constraints imposed by system policy, particularly E.O. 761, this policy allows for expenditures supportive of employee morale (other than those previously identified as prohibited). Official campus functions, such as Staff Awards Day and retirement receptions, are included as they promote employee morale. Employee morale expenditures are restricted to funds budgeted in the designated Employee Relations object code.
• Alcoholic beverages are an allowable expense when (1) the campus employee is serving as host for an event attended by non-campus persons; or (2) the organization is hosting a reception for the benefit of employee morale or for an organized program or reception where alcoholic beverages such as wine (& cheese) are an integral and necessary part of the program. Expenditures for alcohol outside of hosted events are personal expenditures and are not reimbursable.
• Food and beverages when hosting non-campus persons for the purpose of promoting the campus are allowed.
• Meetings* attended by employees of the same work location, (the main campus is a single work location) are subject to the following:
  

  * The term “meetings” does not include departmental celebrations (which are addressed in Note a regarding Employee Morale) or collegial dining among co-workers (non-reimbursable) but refers to business-purpose meetings only.

• On campus, during normal business hours: Food and non-alcoholic beverages for on-campus meetings during regular work hours are allowable only if the “provision of hospitality is a necessary and integral part of the business meeting” (E.O. 761). Expenditure or reimbursement documentation must provide explanation of the “necessary and integral” requirement.
• Off campus, during normal business hours: Food and beverages for off-campus meetings attended only by employees of the same work location is an allowable expense during agendized meetings. Examples are retreats and strategic planning meetings.
  On or off campus, before or after normal business hours: Food and beverages for meetings taking place before or after work is an allowable expense if the meeting was necessarily scheduled at a time and manner to accommodate availability of multiple attendees. Documentation as to the reason why the meeting had to be scheduled outside of normal working hours is required.
  On or off campus, during lunch period:: An amount equal to the cost of the host’s meal, or the lunch per diem currently in effect (whichever amount is the lesser) will be deducted from requests for reimbursement for business lunches with AS colleagues during normal work hours. This exclusion recognizes that the host would have normally incurred a luncheon expense and removes audit questions as to personal benefit to the official host.”
• Promotional items are gifts that bear the campus or community logo and that are of minor value. If greater than minor value and given to an employee, such items are considered gifts or awards. See Note a.
• Upon the judgment of the director, activities other than dining may be used as venues for cultivating donor support or for establishing and building relationships with individuals or corporations, which are of benefit to the University or Associated Students. An example might be golf or sporting events. Documentation must address and support the benefit to the University or Associated Students. Such expenditures are limited to budgeted funds in the designated Campus Community Relations object code.
  Entertainment of vendors must be carefully executed in order to avoid giving the appearance to other vendors of impaired impartiality. Entertainment of vendors to solicit donor support should be restricted to those situations where (1) the Associated Students already has, through contract or purchase order, established the business relationship with the vendor; or (2) the Associated Students does not intend to do contractual business with the vendor. At the judgment of the director, entertainment of vendors to establish or improve relationships dependent on personal interaction is allowable.
• Upon the judgment of the director, travel for building relationships with individuals or corporations, including cultivating donor relationships, is permitted. This includes reimbursement of travel expenses of invited University or Associated Students guests.
• Community involvement donations include memberships in, purchases of tables at fund-raising events of, and contributions toward not-for-profit organizations whose purposes intersect with or promote the mission of the University or Associated Students.

Budget and Documentation Requirements

The benefit to the University or Associated Students must be documented. Given that judgment is very often an intangible but nonetheless critical basis for expenditure (such as Employee Morale), budget managers are encouraged to be as specific as reasonably possible when stating the benefit to the campus.

Original itemized receipts or invoices are required (establishes audit trail for type of expenditure and number of employees). If itemized receipts cannot be obtained or have been lost, a signed statement to that effect is required. On a selected basis, venues may be called to verify that itemized receipts are not available to customers.

Credit card receipts are required (establishes that expense was incurred and paid by the employee and not some other individual). The University has established relationships with two major credit card vendors in order to facilitate this requirement. Payment in cash, because there is no proof that the individual requesting reimbursement actually was the payer of the expense, is to be on an exception basis only and will require alternate supporting documentation such as a second signature of a person in attendance.

All expenditures must have the approval of a budget manager with programmatic authority over the individual submitting the request for expenditure or reimbursement. This requirement is consistent with sound business practice, ensures an appropriate level of campus oversight, and is consistent with expenditure requirements for other funds.

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