University Business Meetings, Entertainment, and Other Occasions are governed by University of California – Policy BUS-79. It is the policy of the University to comply with IRS regulations regarding the provision and reimbursement of business-meals and entertainment, and to conform to the IRS “Accountable Plan” rules.
For your convenience, the following link provides a summary of key entertainment policy requirements.
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What is Entertainment?
University of California Business and Financial Bulletin 79 contains several definitions that are important to consider before processing any transactions for business meetings, social events, or student programs.
- Entertainment is defined as "expenditures for meals or light refreshments and related services (e.g., labor charges, room rental, equipment rental, decorations, flowers, and similar expenditures) incurred in connection with events that are primarily social or recreational activities in support of the University’s mission. Such activities must support an underlying University business purpose such as promoting goodwill, donor cultivation, etc."
Expenses cannot be claimed when they personally benefit the host or other university employees. A legitimate business need must always exist in order to claim entertainment expenses and must be documented appropriately.
The university's use of funds for entertainment must be compatible with our stewardship responsibility and must have a strong ethical component. We should be able to show that our entertainment expenses are necessary and in the best interest of the public.
Things to consider before claiming an entertainment expense:
- Avoid situations that would require exceptions to policy (e.g., exceeding the maximum limits)
- Plan for appropriateness of the venue to meet program goals, not to impress someone (e.g., service award recognition at a local park instead of a banquet hall)
- Be sensitive to the current budget situation and public perceptions (e.g., does your lunch meeting really require filet mignon and salmon steaks or would chicken or a buffet serve the purpose?)
- Is it necessary for your staff meeting to be held before work hours or during lunch hours?
- If you and another campus administrative official are having breakfast at 7am, and it costs each of you $3.50, do you need to be reimbursed? Should you seek reimbursement if the same meeting is held over a lunch break together?
There may not always be one best answer to questions such as those posed above. You may want to consult with a colleague, supervisor, or account manager if there are questions or concerns about the "appropriateness" of an entertainment expense.
What is Reimbursable?
The cost of light refreshments or meals is reimbursable when it falls under one of the following activities:
- Meals provided to employees, visitors from other educational institutions, members of the community, medical center visitors, or employees from another work location where there is a valid business purpose for the meeting. The meeting must have at least one UC Santa Barbara employee present.
Note: When two or more employees choose to dine together in order to continue business, or when a meeting can be scheduled during regular working hours, reimbursement for the meal is not allowed.
- Meals provided to volunteers and research subjects (clinical trials)
- Athletic team meals, including training-table meals, game-related meals, and occasional meals provided in accordance with NCAA rules
- Class, study hall, or other academic-based activities
- Student orientation programs, commencement exercises, and similar activities
- Student government meetings, association meetings, or other student meetings
What is Not Reimbursable per Entertainment Policy but Allowed per Other Policy?
The following occasions may appear to be entertainment-related expenses, but they do not qualify as entertainment expenses and cannot be claimed as such. There are alternate methods for paying for such expenses, as indicated below:
Open to the public, event serves a clear University business purpose, but participants will make a financial contribution and/or will purchase food at the event. Payment for Picnic Day expenses would be done following the Entertainment Policy.
Not an entertainment event. Due to the purpose and participants and no host/guest relationship, entertainment policy does not apply. Payment for expenses would be done following the purchasing policy. For example, tents and bouncy houses require a purchasing agreement.
Job or Recruitment Fair, open to the public, candy or light refreshments are provided as incidental enticements and are deemed necessary as normal business expenses, but not Entertainment Recruitment expenses. Payment for expenses would be done following the purchasing policy. The Purchasing Card may be used or a Direct Charge for reimbursement. However, if a corporate card is used for these expenses, you can still process on A travel Voucher as an Entertainment Business Event report.
Tickets to Cultural or Sporting Events
Tickets to events that are a required part of an instructor's class or part of an authorized outreach or mentoring program would be considered a departmental business expense.
What is Not Reimbursable Under any Policy?
Employee birthdays, weddings, anniversaries, or farewell gatherings (excluding celebrations for retirement or for employees separating from University employment with at least 5 years of service) are not considered official entertainment and are not reimbursable.
The following rates pertain to people being entertained and the university employee who is the official host. If expenditures will exceed these limits, additional approvals and documentation will need to be completed.
See Policy: BUS-79 for more information.
Maximum per person, by meal:
- Breakfast: $28
- Lunch: $49
- Dinner: $85
- Light refreshments: $20
These amounts include tax, service, and delivery charges.
You must submit original, itemized receipts for expenses over $75 in order to receive reimbursement for entertainment expenses. The receipts must identify both food and beverage charges.
If you are missing receipts, please see the "How to work with Missing Receipts" Knowledge Base article.
How To Process Entertainment Expenses
Before processing any entertainment expense, make sure that the expense is:
In addition, make sure that you have approval to process the expense.
The steps below are for entertainment expenses that have been deemed necessary for your department. In general, most entertainment expenses are paid after an event has taken place. An exception is room/catering deposits required up front by the vendor.
1. Gather Receipts and other Supporting Documentation
Original, itemized receipts for expenses over $75 are required in order to receive reimbursement for entertainment expenses. The receipts must identify both food and beverage charges. If you are missing receipts, please see the "How to Work with Missing Receipts" Knowledge Base article.
2. Determine if Expense is Primarily Business, Recruitment, or Social
When processing an entertainment expense, determine its purpose:
When planning an entertainment event, the host must acquire advance approval from a person who is authorized to approve entertainment. By policy, the following approvals are required for entertainment:
- Campus: Department heads are authorized to approve entertainment expenditures.
Additional Approvals and Exceptional Approvals
- In addition to any approvals that normally apply (see above) additional approvals and exceptional approvals must be processed by the Associate Vice Chancellor - Finance or by the Chancellor, as required by policy.
- Individuals with delegated approval authority cannot approve entertainment for someone to whom they directly report. The approving authority should be the supervisor, or higher, of the official host.
- Individuals with delegated approval authority shall not approve their own entertainment
Additional Approvals and Exceptional Approvals
Additional Approval and Exceptional Approvals to policy are granted by the Associate Vice Chancellor of Finance or designee.
What is Additional Approval?
Additional approval is granted by the Associate Vice Chancellor of Finance for events that are allowed by policy but require Additional approval. These events include:
- Entertainment of the spouse, domestic partner, other partner, or family members of the official host or guest
- Tickets purchased for a guest or guests by a host to a sporting, theatrical, or musical event for the purpose of stewardship.
- A cash contribution which includes the cost of a meal or registration fee made to a nonprofit organization in connection with an employee’s attendance at a fundraising or community event
- Employee morale building and employee recognition events
What is Exceptional Approval?
Exceptional approval is also granted by the Associate Vice Chancellor of Finance for expenses not allowed by policy (e.g., exceeding the per-person meal allowance or hosting the extended family of a guest).
Exceptions to policy require a written justification for the request and are necessary if a host has need to exceed policy limits. For example, if the per person maximum allowance is exceeded, a justification is required that fully explains why the higher cost was unavoidable (e.g., Dietary requirement of the guest required a higher cost meal).
Ambiguous or self-descriptive justifications will delay or prevent payment (e.g., “Meal costs exceeded maximum per-person dinner rate”).
Note: Although exceptional expenses may be approved, be sure to consider any funding restrictions. Exceptional entertainment expenses are not allowed on state/general funds.
The following occasions are not allowable entertainment expenses, even by exception:
- employee birthdays
- farewell gatherings (excluding celebrations for retirement or for employees separating from university employment with at least 5 years of service)
- Administrative Professionals' Day
- other non-university related occasions.