UNCW Administrative Policies and Procedures Manual

PUR 1.70 - Purchase of Gifts for Employees

Responsible Offices: Purchasing Services
Comptroller

Effective: March 14, 2000
NEW

Purpose Scope
Policy General Policy Types of Allowable Gifts Gifts for Length of Service Gifts for Retiring or Separating Employees Gifts for Team Performance Gifts for Participants Sympathy Gifts Unallowable Gifts Cash or Cash Equivalent Gifts Gifts Outside IRS Monetary Limits Compensation for Services Performed	Policy (Continued) Frequency of Gifts Allowable Funding Sources Unallowable Funding Sources Required Written Approvals Required Documentation Exchange of Personal Gifts Among Employees Honoraria	Procedure Purchase of Gifts for Employees Supporting Documentation and Approval Review of Gift Purchases Noncompliant Gift Purchases

Purpose

Establishes consistent, campus-wide policies and procedures governing items purchased by the university and given as gifts to employees, including gifts given to employees or their family members as expressions of sympathy.
The intent of this policy is to:

Ensure consistent treatment of employees across divisions.

Ensure compliance with university funding restrictions, state purchasing guidelines, and other applicable regulations. This is particularly important because, as a public agency, the University of North Carolina at Wilmington is subject to public scrutiny regarding its use of public funds.

Ensure compliance with IRS regulations regarding the taxability of gifts to employees.

Scope

This policy applies to all university departments and activities.
Items governed by this policy are limited to items purchased by the university and given as gifts for employees.
Exclusions to this policy:
For information regarding gifts or awards presented by university-sponsored Employee Awards or Recognition Programs (see policy statement 1), contact Human Resources.

Policy

1. General Policy.

The University of North Carolina at Wilmington recognizes that its success in providing quality education and effective, efficient services is dependent largely upon the efforts made by competent and dedicated employees. As such, the university has established several campus-wide programs as an official means of showing appreciation to its valued employees:

Employee Award Programs

Examples: Faculty Teaching Excellence Award, Staff Excellence Award

Employee Recognition Programs.

Examples: Employee Service Awards, Seahawk Kudos, etc.

Additional gifts to employees (outside of the university-sponsored Employee Awards or Recognition Programs) are allowed only for certain work-related events and for expressions of sympathy as specified in Policy statement 2.

University departments or divisions that wish to present employees with such gifts must comply with the guidelines in this policy, with the purchasing provisions of the State of North Carolina, and with any other applicable state or federal laws and regulations.

2. Types of Allowable Gifts. University policy generally prohibits the university from giving gifts to individual employees from any source of funds or for any purpose, except for service recognition gifts (see 2.a. and 2.b. below) and sympathy gifts (see 2.e. Below). Gifts may be given to groups of employees to recognize team performance (see 2.c. Below) or for their participation in university events or activities (see 2.d. Below).

For exceptions, contact the university comptroller.

a. Gifts for Length of Service.

Departments or divisions may give recognition gifts to employees for length of service, subject to the following restrictions:

Gifts must be given as a part of a meaningful ceremony.

The employee must have completed at least five years of service, and must not have received a similar gift in any of the prior four years.

Gifts are generally of nominal value but may not exceed $400, which is the IRS threshold for taxability.

b. Gifts for Retiring or Separating Employees.

Such gifts must be given as a part of a meaningful ceremony, such as in conjunction with a retirement or separation reception.

The value of the gift may depend upon the length of service but may not exceed $400, which is the IRS threshold for taxability.

c. Gifts for Team Performance.

Gifts may be given to groups of employees to show appreciation for their team efforts and performance, and are normally one of a number of identical items.

Gifts must be given as a part of a meaningful ceremony. Note: Team sponsors typically give these gifts in conjunction with the Seahawk Kudos program or similar divisional recognition program.

Gifts are typically of nominal value and typically do not exceed $25.

d. Gifts for Participants.

Gifts of this type are typically one of a number of identical items widely distributed to a group of employees for their participation in university-sponsored events or other university activities.

Gifts must be of nominal value and may not exceed $25.

If the primary purpose of the purchased item(s) is to benefit the university-sponsored event or activity but the item(s) typically become an employee’s personal property after such use, such items are subject to guidelines in Procedure PUR 1.60 and are not considered "gifts." (Example: Shirts customized with a UNCW logo may be provided for employees to wear while assisting in student orientation activities.)

e. Sympathy Gifts.

Departments may send appropriate traditional commemorations (tangible personal property such as flowers, fruit baskets, etc., generally under $100) on the serious illness or death of an employee or family member of an employee. Such commemorations are allowable in recognition of the value of employees to the university and the extent to which work relationships form much of the social fabric of employees’ lives.
Monetary contributions to bona fide charitable organizations in lieu of traditional commemorations may be given, consistent with the amount a department would normally spend on traditional commemorations.

3. Unallowable Gifts.

a. Cash or Cash Equivalent Gifts.

Gifts to employees in the form of cash, negotiable gift certificates, or a similar item easily exchanged for cash (regardless of the amount or value) are not allowable. Gifts must be in the form of tangible personal property.

If a gift certificate entitles an employee to choose between selecting an item of merchandise or receiving cash or reducing the balance due on his or her account with the issuer of the gift certificate, the gift certificate is a negotiable gift certificate and is, therefore, not allowable.

b. Gifts Outside IRS Monetary Limits.

In order that a gift may not inadvertently result in taxable income to the employee, the value of the gift should be within IRS monetary limits. For exceptions, contact the comptroller to ensure that any taxable income to the employee is handled properly.

c. Compensation for Services Performed.

Gifts must be given under conditions and circumstances that do not create the likelihood that the gift will be perceived as compensation for a service performed. Payments for services provided by employees are processed through the university payroll system and are subject to FICA, state and federal taxes, and state retirement withholding.

For additional information concerning the allowability of gifts, contact the comptroller.

4. Frequency of Gifts.

Gifts are meant to be occasional and must be presented to an employee on an infrequent basis in order to comply with IRS regulations.

5. Allowable Funding Sources.

Gifts to employees may be paid from the following funding sources:

Agency funds.
Unrestricted endowment income, such as discretionary accounts established for the chancellor or vice chancellors.
Other unrestricted trust funds, such as unrestricted gifts, student fees, and income available for general program enhancement.
Gifts, grants, or contracts that specifically provide for the purchase of such gifts.

Special notes regarding funding from contracts and grant funds:

Prior approval of the Office of Sponsored Programs is always required.
Sympathy gifts may not be purchased from any contract and grant funds, regardless of the recipient.

Enterprise funds whose revenue is derived primarily from sources other than university departments (such as Bookstore, Housing, Food Services, Parking).

6. Unallowable Funding Sources.

Gifts to employees are strictly prohibited from the following funding sources:

General funds (state appropriations).
Gifts, grants, or contracts that do not specifically provide for the purchase of such gifts.
Federal indirect costs.
Enterprise funds, if the sales or service is directed primarily to university departments (such as Central Stores, Printing Services, Telecommunications).

7. Required Written Approvals.

Written approval from the following is required for all purchases of gifts for employees:

Chancellor, respective vice chancellor, or academic dean.
The budget authority for the account to be charged, if the budget authority is not the approving official.
Director of Sponsored Programs (only if purchased from contract and grant funds).

Exception: Sympathy gifts that fall in the category of traditional commemorations (flowers, fruit baskets, etc.) do not require additional approval other than approval of the budget authority.

8. Required Documentation.

The following documentation is required to support all purchases of gifts for employees. Transactions that are not accompanied by the required documentation will be declined for payment and/or reimbursement.

Original receipts.
Documentation to adequately justify the purpose and reasonableness of the gift.
Written approvals as indicated above.

9. Exchange of Personal Gifts Among Employees.

This policy does not prohibit the exchange of gifts from one employee (or group of employees) to another employee for occasions such as baby showers, holiday gift exchanges, birthdays, employees leaving university employment, etc., subject to the following conditions:

No university officer may solicit or compel individual contributions to such a gift, and
No university funds from any source may be contributed to such a gift.

10. Honoraria.

Payment of honoraria to state employees is governed by state policy as published by the State of North Carolina's Office of State Budget and Management.

See Procedure HR 1.35, Appendix A, for the state policy on the payment of honoraria.

PUR 1.70 – Purchase of Gifts For Employees

Procedure

Effective: March 14, 2000
NEW

1. Purchase of Gifts for Employees

Determine if the planned gift to an employee is allowable under the guidelines stated in this policy.

For questions concerning the allowable funding for the planned purchases, contact the comptroller.

For questions concerning purchases from contract and grant funds, contact the Director of Sponsored Programs.

If the proposed gift is allowable, follow standard university purchasing procedures. (See PUR 1.00 and PUR 1.10.)

2. Supporting Documentation and Approval. Ensure that each transaction is accompanied by the following:

Original receipts to support the total expense.

Written justification to adequately support the purpose and reasonableness of the expense. Include the employee's name and title, description of the gift, date and location where the gift is presented, and an explanation for the purpose of the gift. If gifts are presented to a group of employees, also include the number of employees and identify the group represented.

Written approval from the following:

Chancellor, respective vice chancellor, or academic dean.
The budget authority for the account to be charged, if the budget authority is not the approving official.
Director of Sponsored Programs (for funding from contract and grant funds.
Exception: Sympathy gifts that fall in the category of traditional commemorations (flowers, fruit baskets, etc.) do not require additional approval other than approval of the budget authority.

3. Review of Gift Purchases.

Purchasing Services (or the comptroller's office, if applicable) will review purchases of items that may appear to be gifts to employees for funding source, compliance with university procurement policies, and appropriateness under this policy.

4. Noncompliant Gift Purchases.

When gifts do not comply with the guidelines in this policy, Purchasing Services (or the comptroller’s office, if applicable) will not approve proposed purchases and, by the same token, will not reimburse expenses for such noncompliant gift purchases.

When a department is noncompliant with purchasing policies, Purchasing will send a memorandum to the responsible department head and to the next higher authority.

Any employee circumventing established purchasing guidelines is subject to disciplinary action.

When purchases have been made from an improper funding source, the comptroller (or Purchasing, as appropriate) will contact the department to obtain the appropriate alternate funding source for payment of the charges. If unable to obtain an alternate funding source from the department in a timely manner, the comptroller will either identify a funding source and notify the department or will withhold payment, whichever is applicable. Purchasing Services will not process purchase orders until the proper funding source is identified.