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Hospitality Expenses

Recommended By: Administration and Finance
Approved: Ruben Armiñana, President
Date of Original Issue: August 15, 2000
Current Issue Date: January 10, 2011
Effective Date: January 10, 2011
Contact Office: University Controller

Policy #2000-4

  1. Purpose
    Hospitality expenses may be paid with university funds to the extent that the purchase and use of these services and items are consistent with the mission and fiduciary responsibilities of the university. This policy applies to activities that promote the university to the public and the provision of hospitality in connection with official university business and specifies the university funds that may be used for such purposes.
  2. Authority
    CSU Executive Order No. 761, effective October 31, 2000, states that "Each campus is required to develop written policies and procedures, consistent with this policy, regarding the payment of hospitality expenses. In addition to E.O. 761, authority for this policy is provided by Article 16, Section 6, of the California Constitution; by Sections 41600 and 41601 of Article 1, Subchapter 5, Chapter 1, Division 1, of Title V (the Education Code) of the California Code of Regulations; by Sections 66600, 89030, 89035, and 89044, of the California Education Code; and by California State University Coded Memorandum HR 96-11.
  3. Definitions
    Approving Authority - a person to whom authority has been delegated in writing to approve expenses in accordance with university policy.
    Auxiliary Organization Funds - funds held by a recognized auxiliary organization.
    Award - a gift of tangible personal property in recognition of service or achievement directly benefiting the university.
    Operating Fund - funds appropriated to the university by the state legislature and fees paid by students for support expenditures of the university.
    Gift - something of value given or bestowed upon an individual, group, or entity with the expectation of benefit accruing to the university.
    Hospitality - the provision of meals (catered or restaurant) or light refreshments (beverages, hors d'oeuvres, pastries, cookies, etc.), promotional materials, gifts, and travel expenses of official guests of the university. Item IV (Allowable Expenses and Occasions) include events that may be approved as hospitality and no outside guest is in attendance. Hospitality includes expenses for activities that promote the university to the public, usually with the expectation of benefits accruing directly or indirectly to the university, and may include the provision of gifts, awards, and promotional materials.
    Official Guest - a person invited by an official host to attend a university meeting, conference, reception, or event. Examples of official guests include employees from another CSU work location, members of the community, or media representatives. Employees of SSU are not considered official guests.
    Official Host - a university employee who hosts a meeting, conference, or event.
    Promotional Materials - a gift of tangible personal property that is distributed to promote the name or image of the university, to provide information, or to enhance university productivity. Promotional items are of minor value and often bear the logo or othericon or information identifying the university, such as a pen, folder, calendar, or clothing.
    Other University Funds- Funds authorized for support of activities that are supplemental to the primary mission of the university and are paid for by fees and revenues other than Operating tax revenues. Other University Funds include the Continuing Education Revenue Fund, the Lottery Education Fund, Auxiliary Enterprise Funds, and various Trust Funds.
    Work Location - the place where the major portion of an employee's working time is spent, or the place to which the employee returns during working hours upon completion of special assignments.
  4. Allowable Expenses and Occasions
    Hospitality expenses must be directly related to, or associated with, the active conduct of official university business. When a university employee acts as an official host, the occasion must, in the best judgment of the approving authority, serve a clear university business purpose, with no personal benefit derived by the official host or other university employees. In addition, the expenditure of funds for hospitality should be cost effective and in accordance with the best use of public funds.
    Hospitality expenses, including awards and gifts, must conform to IRS regulations.
    When determining whether a hospitality expense is appropriate, the approving authority must evaluate the importance of the event in terms of the costs that will be incurred, the benefits to be derived from such an expense, the availability of funds, and any alternatives that would be equally effective in accomplishing the desired objectives.
    Following are examples of occasions when the provision of hospitality is permitted:
    • When the university hosts official guests, including university employees visiting from another CSU work location, donors, and prospective donors;
    • When the university is the host or sponsor of a meeting of a learned society or organization;
    • When the university is the host or sponsor of meetings of an administrative nature that are directly concerned with the welfare of the university and the provision of hospitality is a necessary and integral part of the business meeting and not solely a matter of personal convenience. When the hospitality does not include an outside guest, a detailed justification will be required as part of the reimbursement request  and will  require CFO approval;
    • When the university hosts receptions held in connection with conferences, meetings of a learned society or organization, fundraising events, meetings of student organizations and groups, student events such as commencement exercises, and meetings of other university related groups such as alumni organizations; when the President hosts on-campus receptions, open to the University community, for the benefit of employee morale, employee recognition, length of service awards, and employee farewell and retirement receptions for those full-time employees who resign or retire after a minimum of fifteen years of service to Sonoma State University. The President may make exceptions for those employees with fewer than fifteen years of full-time service. Payment of expenses is also permitted when the President hosts events to further enhance campus relations between students, faculty and staff. The President must attend the event. Payment of or reimbursement for hospitality expenses is not permitted when these expenses are for events such as employee birthdays, weddings or anniversaries.

      Employees on travel status are limited to the meal allowances outlined in the CSU Travel Policy and Procedures.  If a hospitality event involving non-employees occurs during the course of travel, the item should be listed as a business expense and the hospitality form and meal receipt must be attached to the travel claim.  In such cases, the employee may not also claim the per diem allowance for that meal. 
  5. Funding Sources
    Hospitality expenses may be paid from various university fund sources, subject to the rules outlined below and the restrictions identified in Table 1. It is the responsibility of each Vice President to ensure that all funds are used in accordance with this policy.
    There are three types of funds available for the payment of hospitality expenses - Operating Fund, Other University Funds, and Auxiliary Organization Funds.
    1. Operating Fund
      In addition to the restrictions identified in Table 1, the following restrictions apply to the use of the Operating Fund:
      • The Operating Fund may not be used to pay for alcoholic beverage or tobacco purchases, gifts, or awards.
      • The Operating Fund may not be used to pay for food and beverages for business meetings attended only by employees of the same CSU work location.
      • Any expenditures prohibited by statute, including the California Budget Act.
    2. Other University Funds
      In addition to the restrictions identified in Table 1, the following restrictions apply to the use of Other University Funds:
      • Other University Funds may be used to pay for alcoholic beverages, tobacco products, gifts, and awards to the extent these purchases are not restricted by other applicable laws, regulations or agreements.
      • Other University Funds may be used to pay for food and beverages for business meetings attended only by employees of the same work location
      • Trust Funds with specific Trust Agreements may be used to pay hospitality expenses only to the extent permitted by the statute under which the funds are established and maintained and any trust agreement.
      • Federal or local government contract and grant funds may be used to pay hospitality costs only if such expenses are specifically authorized in the contract or grant, or by agency policy, and only to the extent and for the purposes authorized. In the event of a conflict between agency and university policy, the more restrictive of the two policies shall apply.
      • No alcoholic beverage or tobacco purchases may be charged to Federal funds.
    3. Auxiliary Organization Funds
      Auxiliary Organization Funds may be used to fund hospitality but only within the restrictions established by the auxiliary organization.
      Expenses for alcoholic beverages, tobacco products, gifts, and awards may be charged to Auxiliary Organization Funds subject to the policies and restrictions established by this policy and by the auxiliary.
  6. Applicability
    This policy is applicable to all Sonoma State University units and its related auxiliary corporations.
  7. Approval of Transactions
    The President has delegated authority to each Vice President, Dean, and Senior Director to approve hospitality expenses; this delegation may not be further delegated. The President must approve hospitality expenses of the Vice Presidents and of the Chief Financial Officer. The Chief Financial Officer must approve hospitality expenses of the President. Individuals with delegated approval authority may not approve their own expenses, and individuals may not approve expenses of their supervisor, with the exception of the Chief Financial Officer and the President.
    Approval of hospitality expenses should be obtained from the Approving Authority (the appropriate administrator) PRIOR to the event, using the Hospitality Expense Approval Form (http://www.sonoma.edu/finance/forms/).
Table 1.
Funding Sources for Payment of Hospitality Expenses

 

Hospitality Expenses

Operating Fund

Other University Funds

Auxiliary Organization Funds

Food and Beverages (other than Alcoholic Beverages) for Meetings Attended Only by Employees of the Same Work Location

No

Yes

Yes

Food and Beverages (other than Alcoholic Beverages) for Meetings Attended by Official Guests

Yes

Yes

Yes

When the President hosts on-campus receptions open to the University community, for the benefit of employee morale, employee recognition, length of service awards, and employee farewell and retirement receptions for those full-time employees who resign or retire after a minimum of fifteen years of service to Sonoma State University. The President may make an exception for those employees with fewer than fifteen years of full-time service

Yes

Yes

Yes

Alcoholic Beverages and
Tobacco Products

No

Yes

Yes

Awards

No

Yes

Yes

Promotional Items

Yes

Yes

Yes

Length of Service Awards Yes Yes Yes