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Entertainment Policy
Including Guest meals, Business meals, Receptions, Gifts, and Flowers
These policies and procedures reflect Auburn University policies for entertainment related expenses. The Auburn University Foundation (AUF) also has policies established by AUF for the use of AUF funds in similar circumstances. For the convenience of the reader, references to AUF policies are included in this document, however, readers should contact AUF for specific and/or additional information about AUF policies and procedures.
General
It is understood that the business of the University requires some expenditures of an entertainment nature. In all cases however, there must be a clear, documented, business purpose for the event/expenditure that indicates the event's benefit to the University. This policy is intended to be neither all inclusive nor to address every situation which may arise. Questions about specific situations not addressed in this policy and/or policy clarifications should be addressed to Debby Miller, Procurement and Payment Services 4-7771 (AU funds) or Beth Bailey, Development Accounting 4-1125 (Foundation funds).
In general, State laws and regulations expressly prohibit the University from spending University funds on: alcohol; spouse meal and travel expenses; tickets to athletic and cultural events; and expenses associated with social events.
In addition, OMB Circular A-21, which dictates Federal cost principles for educational institutions, requires that the type expenses addressed in this policy be captured separately as they are considered generally unallowable. Therefore, appropriately coding such expenditures is required.
From an IRS perspective, for meals and entertainment to qualify as a business expense, they must be
ordinary
and
necessary
and not lavish and/or extravagant and must be directly related to or associated with the University's mission. In addition, an AU employee must be present at the meal/event for it to meet the IRS business expense regulations. Because the IRS imposes strict substantiation/documentation requirements on such expenditures, the University must be able to provide the following documentation on such expenses:
- Amount
- Date, time, and place
- Business purpose served by the expenditure
- Business relationship to the University of each person in attendance
In addition, as with all contract or grant funds expenditures, it is the responsibility of the Principal Investigator to insure that all expenditures are made in accordance with all applicable contract or grant restrictions. In considering incurring expenses such as those addressed in this policy, PI's should keep in mind that the more restrictive policy/contract terms or budget (AU vs contract/grant) will prevail. Thus if the contract terms are more liberal than AU policy, the more restrictive policy (AU) will be enforced.
Meals
Expenses for meals other than those incurred while on travel status can fall into two broad categories: business meals and guest meals. By definition,
business meals
would include meals provided during business meetings involving the following: only University employees; persons being compensated by AU via a professional service (PSC) or other contract; meals served during/associated with advisory council type meetings; meals at AU hosted/sponsored conferences/meetings/seminars; and meals provided to students while on campus or traveling in conjunction with executive degree programs. Conversely,
guest meals
are those provided to distinguished guests, interviewees and persons visiting AU as non-paid guests accompanied by an AU employee host. For information on travel related meal reimbursement policies, see the AU Travel Policy.
Business Meals
Meals and refreshments incidental to a business meeting that involves
substantive
business discussions and include primarily only AU employees may be provided if, for reasons of continuity, the meeting extends through a traditional meal time period. Such business meals should be infrequent and should generally be served at the meeting site. AU will pay/reimburse
actual expenses up to
$10/breakfast, $20/lunch, $30/dinner per person for business meals.
Documentation requesting payment/reimbursement of business meals must include
all
of the following:
- guest list of all in attendance that denotes each participant's association with AU
- itemized bill (credit card receipt only is not sufficient)
- detailed statement of the business purpose
Guest Meals
Guest meals are defined as those meals provided during the course of AU business when at least one non-AU employee is present. There must be a documented business purpose (must meet IRS ordinary and necessary criteria) and need for business to extend into a traditional meal time period. The cost of the meal must be reasonable, not lavish or extravagant, and the number of AU employees present to entertain the guest should be kept to a minimum. The expenses for spouses in attendance and/or alcohol served
cannot be charged to University funds. Guest meals are limited to
actual expenses up to
a total of $60/day per guest.
Meals served during interview situations, for guest lecturers, visiting scholars and other distinguished guests of the University are considered guest meals and are limited to
actual expenses up to
$60/day per person.
The number of University employees participating should be kept to a minimum.
Some expenses associated with entertaining/guest meals may be allowable from Foundation funds when not appropriate from University funds. For instance, in interview situations, meal expenses for an AU employee spouse can be paid/reimbursed as a non-taxable expense through the Foundation when the interviewee's spouse is also in attendance at the meal. However, such entertainment/guest meal costs will only be covered by the Foundation when IRS business purpose criteria are met (ordinary and necessary), expenses are reasonable, and not lavish or extravagant. Such expenses are limited to
actual expenses up to
$60/day per person.
Documentation requesting payment/reimbursement of guest meals must include all of the following:
- guest list of all in attendance that denotes each participant's association with AU
- itemized bill (credit card receipt only will not be sufficient)
- detailed statement of the business purpose
Receptions
Expenses associated with Retirement Receptions may be paid using University accounts. Departments choosing to host a meal rather than a reception for a retiring employee may not use University funds to do so. It is expected that there will be only one retirement function per retiring employee.
Meals and/or receptions for employees leaving the University who are not retiring are considered personal in nature and may not be paid using University funds. Expenses for receptions honoring visiting distinguished guests of the University may be paid for using University funds as long as IRS regulations are met i.e. business purpose, reasonable, ordinary and necessary.
Documentation requesting payment/reimbursement for receptions must include all of the following:
- itemized bill (credit card receipt only is not sufficient)
- detailed statement of the business purpose
Coffee Break & Refreshment Supplies
Supplies for coffee breaks, office refreshments, etc....are considered personal and may not be purchased with University funds. See the
Foundation Policy
for their policies on such expenses. Refreshments for business meetings which meet the business purpose test may be purchased using University funds if documentation supporting the business nature of the purchase and subsequent use is provided.
Other Functions
Expenses associated with seasonal gatherings/meals, birthday/wedding/baby celebrations, non-retirement employee departures and social gatherings (even if for morale building purposes) are considered to be personal in nature and may not be paid using University funds.
While not allowable with University funds, occasional morale building events such as a holiday party or family picnic may be allowable using Foundation funds. See the
Foundation Policy
for specific guidance on such events.
Flowers, Invitations & Greeting Cards
Flowers purchased for decorative purposes for official AU business functions may be paid for using either University or Foundation funds. Flowers for any other purpose including corsage/boutonnieres for retirement functions, flowers for ill/deceased AU employees/donors/friends etc... may not be purchased with University funds.
Foundation policies allow for the purchase of corsage/boutonniere for retirement functions and/or flowers for ill or deceased employees/friends/donors of AU. In addition, in memoriam situations where the family of the deceased person has requested contributions in-lieu-of flowers, a contribution may be allowable under Foundation policies. See
Foundation Donation policy
for more information.
The cost of printing and mailing invitations to official AU business functions including retirement receptions may be paid using University funds. The cost of greeting and/or seasonal cards may not be charged to University funds. However, such purchases may be allowable using Foundation funds. See
Foundation Policies
for more information.
Gifts, Plaques & Framing
Gifts, or anything that might be perceived as a gift, including items given as a thank you for services provided, etc... cannot be purchased using University funds. Within certain restrictions, some gifts such as those to retiring employees or those given as a thank you in-lieu-of payment may be allowable under Foundation policies. In addition, there are special IRS rules for gifts to donors which must be strictly adhered to. See
Foundation Policy
for more information.
Plaques and/or framed artwork purchased for permanent display on a University owned building wall, may be charged to University funds. All others may NOT be charged to University funds unless awarded through a documented competitive process. Written criteria for award and the selection process must be provided with reimbursement/payment request. For information regarding the purchase of plaques and/or framed items using Foundation funds, see the
Foundation Policies.
Donations
Donations cannot be made by the University to any outside agency/institution or other group.
The Foundation is also prohibited by law from supporting the charitable activities of non-profit organizations other than AU. However, under certain circumstances, Foundation payments may be made to other organizations without charitable intent such as in memoriam situations as outlined in the
Flowers, Invitations and Greeting Card section
of this policy. See Foundation Policy for details on allowable donations.
Student Functions
The following may be paid using State Funds:
- Year-end banquets/functions honoring the accomplishments of student activity fee supported groups.
Functions must be held on campus.
- Year-end plaques/awards for the elected leaders of student activity fee supported groups (based on the fact that these leaders competed for their positions earlier in the year.)
- Meals/food served at official AU student functions like those sponsored by the UPC.
Functions must be held on campus.
- Meals/food served during a meeting held during a traditional meal hour. Official AU business (as supported by an agenda) must be conducted to qualify, function cannot be merely a social event.
Student Field Trips
AU funds can be used for student field trips only if:
- the trip is an integral part of the lesson plan in a course for academic credit -or-
- the student is paying a fee (above and beyond normal tuition fees) to participate in the trip (ex. SGA sponsored spring break trip where student pays trip expenses through the SGA.)
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