Purpose Scope Policy Types of Expenditures Covered by This Policy Entertainment Associated with University Business Required Approvals Required Documentation Required Receipts Allowable Funding Sources Non-Allowable Funding Sources Timely Submittal of Requests Procedure Prior Verbal Authorization Requests for Payment or Reimbursement of Entertainment Expenditures Form:  Business Entertainment Expenditures Documentation Form Instructions Adobe PDF Form   (Fill out the form on-line and print for signature, OR print a blank form and fill out by hand or typewriter.)

Revisions effective  February 13, 2001, are indicated by .  Key revisions include the following: Approval signature of the dean, vice chancellor, or chancellor is required on the Business Entertainment Expenditures Documentation form.  Normal approval signature  (i.e., signature of the budget authority for the account to be charged) is required on the Check Request accompanying the Business Entertainment Expenditures form. Allowable and non-allowable funding sources for business entertainment expenditures are indicated. Business entertainment expenditures are charged to the business entertainment object code (3962). The Business Entertainment Expenditures Documentation form has been revised and is available as a PDF form on the Administrative Forms Directory.

Establishes university policy and procedures respective to business entertainment expenses. The intent of this procedure is to comply with Internal Revenue Service regulations regarding reporting and accounting requirements for business entertainment expenses.

This policy applies to all university departments and employees. However, refer to policy statements to determine:

• The types of business expenditures subject to special approval and documentation requirements of this policy.
• Allowable funding sources for business entertainment expenses.

Types of Expenditures Governed by This Policy.

Costs of meals, theater tickets, golfing privileges, and any other costs of a personal nature related to a business activity that occurs off-campus and is not directly related to a university program or formal workshop are subject to special documentation rules by the IRS and enforced by our state auditors. Each individual event will stand on its own merit; however, in order to assist university departments in determining when this policy's special documentation and approval requirements apply, the following examples are given:

a.     Two university employees go to lunch to discuss the appropriate topics to be covered at a 2 p.m. meeting that day. If the university is to pay for the meal, documentation and approval requirements as prescribed in this policy are required.

b.      A university staff member takes an out-of-town guest to dinner where a discussion regarding university business takes place. If the university is to pay for the meals, etc., documentation and approval requirements as prescribed in this policy are required.

c.      The Division for Public Service hosts a meal for an Elderhostel program on campus. This is a normal university expense associated with a formal university program. Documentation and approval requirements explained in this policy do not apply for payment of expenses incurred.

d.     Same situation as c. above but site is a local hotel. Even though this event occurred off campus, this policy does not apply for the same reasons given in c. above.

Entertainment Associated with University Business.

Entertainment costs that are paid or reimbursed by the university must meet the following tests:

• Expenses are directly related to university business, or
• If directly preceding or following a university-related discussion, the expenditures are associated with the conduct of university business, and
•   If the entertainment includes a business meal, the university employee or designee serving as the official host must be present when the food and/or beverages are provided.

  If questions arise regarding the allowability of entertainment expenses, contact the university comptroller.

Required Approvals.

Business entertainment is not considered a normal operating expense; therefore, each occurrence requires additional scrutiny from university management. Before approving any entertainment expenditure, senior officers should determine the entertainment expenditures are "reasonable" and "justified." Entertainment costs incurred are also subject to state audit review.

a.      Prior Verbal Authorization.

Prior to incurring entertainment expenditures, university employees will need to obtain verbal authorization from their respective dean, vice chancellor, or chancellor.

b.      Written Approval.

  In order for entertainment expenses to be paid or reimbursed by the university, approval signature from the respective dean, vice chancellor, or the chancellor is required on the Business Entertainment Expenditures Documentation form. Normal approvals (signature of the budget authority for the university account from which business entertainment expenses are to be paid) are required on the Check Request accompanying the Business Entertainment Expenditures Documentation form.

Required Documentation.

  The Business Entertainment Expenditures Documentation form is designed to meet IRS requirements for proving that the expenses are related to university business. All requests for business entertainment expenditures to be paid or reimbursed by the university must be supported by completion of a Business Entertainment Expenditures Documentation form.

Required Receipts.

  Original receipts and/or invoices to equal the total entertainment expense are required in order for the university to pay or reimburse entertainment expenses. However, in lieu of an actual receipt for tips, an itemized list (showing the dates, payees, and amount) is acceptable, providing the tips are reasonable and customary considering other expenses incurred.

Allowable Funding Sources for Business Entertainment.

Business entertainment expenses may be paid from the following types of funds:

• Agency funds.
•   Unrestricted endowment income, such as discretionary accounts established for the chancellor or vice chancellors.
•   Unrestricted trust funds such as unrestricted gifts to the university, student fees and income available for general program enhancement.
• Grants or contracts that specifically provide for the payment of business entertainment expenses.

(Prior approval from the Office of Sponsored Programs is always required for funding from contract and grant funds, regardless of the recipient.)
•   Enterprise funds (such as Bookstore, Housing, Food Services, Parking) whose revenue is derived primarily from sources other than university departments.

  Business entertainment expenses are charged to the business entertainment object code (3962).

Non-Allowable Funding Sources for Business Entertainment.

  Business entertainment expenses are strictly prohibited from the following funding sources:

•   General funds (state appropriations).
•   Grants or contracts that do not specifically provide for the payment of business entertainment expenses.
•   Restricted gifts to the university designated for scholarships, endowments or a specific purpose other than business entertainment. Federal indirect costs.
•   Enterprise funds (such as Central Stores, Printing Services, Telecommunications), if the sales or service is directed primarily to university departments.

Timely Submittal of Requests.

Requests that the university pay or reimburse business entertainment expenses will need to be submitted within thirty days after the expense is incurred. At fiscal year end, requests should be submitted on or before July 5.

The following procedures are designed to conform to Internal Revenue Service regulations that require the employee to prove that his/her expenditures constitute ordinary and necessary business expenses. By following the below procedures, university employees are excused by the Internal Revenue Service from further substantiation of entertainment expenses.

  Follow these procedures for all business entertainment expenditures to be paid by the university, regardless of whether the payee is an individual or a vendor.

1.      Prior Verbal Authorization.

Prior to incurring any entertainment expenditures, the employee planning to incur business entertainment expenses will need to obtain verbal authorization from the respective dean, vice chancellor, or the chancellor.

2.      Requests for Payment or Reimbursement of Entertainment Expenditures.

a.      Business Entertainment Expenditures Documentation form.
Complete form and obtain written signature approval of the dean, respective vice chancellor, or chancellor.


b.      Check Request

• Prepare a Check Request in accordance with Procedure ACG 1.50. In addition, ensure that:
•   Entertainment expenditures are being paid from an allowable six-digit university account and that the business entertainment object code (3962) is specified.
• The total amount indicated on the Check Request equals the attached original receipts, etc. and the expenses indicated on the Business Entertainment Expenditures Documentation form.
• Obtain approval signature of the budget authority.


c.      Supporting Receipts, etc.

• Attach original receipts, invoices, cash register tickets, or charge card slips to equal the total amount of the expenditure.
• Unless included on a receipt, itemize tips on a separate sheet (showing date, payee, and amount). Ensure that tips are customary and reasonable based on other expenses incurred.


  Attach the Business Entertainment Expenditures Documentation form and receipts, etc. behind the original of the Check Request and forward to the Accounting Department within 30 days after the expense is incurred. At fiscal year end, submit requests before July 5.

  For questions about submittal of requests or if you are unsure whether the request meets university requirements, contact the comptroller.

3.      Incorrect Submission of Requests.

  The Accounting Department will return for correction all requests that are not properly prepared, approved, or documented.

A.      Where to Obtain Forms.

  The Business Entertainment Expenditures Documentation form is available on the Web through the Administrative Forms Directory.  The form can also be accessed directly at the following address:

http://www.uncw.edu/sp/AdmForms/FormsPDF/acg240.pdf

All items on the form are self-explanatory; therefore, no additional instructions are given. If you have questions about the completion of this form or whether the request meets university requirements, contact the comptroller.

C.    Where to Send Completed Forms.

  Attach the completed Business Entertainment Expenditures Documentation form directly behind the original of the Check Request and forward to the Accounting Department within 30 days after incurring the expense. (Behind these two documents, attach supporting receipts, invoices, cash register tickets, or charge card slips to equal the total amount of the expenditures.)

Retain a copy of the Business Entertainment Expenditures Documentation form for departmental records.