Entertainment Policy Basics
The individual who incurred the expenses being reimbursed. Typically (but not necessarily) the individual who coordinated/scheduled the logistics associated with the event. May or may not also be the host.
An official host is a University employee or other individual who is the University’s representative at an official business meeting, entertainment event, or other activity. The individual arranging an event (e.g., making hotel arrangements, ordering food, etc.) is not the host unless he or she is physically present at the event and acting in a capacity as the official host.
Per-person Limit for Meals and Light Refreshments
Costs of food, beverage, sales tax, labor, delivery and other service fees are totaled and divided by the number of guests. Costs associated with facility rental, equipment rental, decorations and other items are an additional expense not calculated against the per-person limit. The maximum per-person rate is established by policy, but departments may establish lower limits.
Reimbursement is a payment to a University employee, student, or other individual for expenses incurred in connection with a University-approved business meeting, entertainment event, or other activity authorized under UC Policy BUS-79.
- The event coordinator will incur and report actual entertainment expenses in a responsible, ethical and timely manner.
- The event coordinator will make choices that demonstrate good stewardship of University resources; spending decisions will not be extravagant or lavish.
- Entertainment expenses must be considered ordinary and necessary to accomplish the official business purpose of the event.
- Entertainment expenses considered by the IRS to be taxable income to the employee or event coordinator will not be reimbursed; meal or entertainment expenses will be considered taxable income if:
- The activity is not directly related to the employee’s job
- The expense is lavish or extravagant under the circumstances
- The official host or other designated employee is not present when the activity takes place
- The expense is not substantiated with supporting documentation
- Entertainment expenses will be reviewed and approved/denied in accordance with University policy and campus business practices; refer to UC Policy BUS-79.
Provide a clear and thorough business purpose for your entertainment event. You should always be able to explain how the University benefited from any expense it paid.
A good way to explain the business purpose is to answer who, what, where, when and why. You do not need to include confidential details, such as donor names, but you should give some specifics.
Alcoholic beverages are beer, wine, or any beverage containing distilled spirits. No alcoholic beverage may be charged to state or federal funding sources. For guidance on additional restrictions, contact your research administrator or department business officer.
Programmatic activities are meetings and events that are in keeping with the University’s mission. As a tax-exempt organization, the University may incur “entertainment costs” that are in keeping with business purposes, such as expenditures for meals or light refreshments incurred in connection with student enrichment, training programs, food provided as a necessary part of a community-support activity (e.g., snacks at a blood donation event), and similar activities.
Frequency of Meals and Light Refreshments
Meals and light refreshments that are provided by an employer to its employees on a frequent or routine basis are treated by the IRS as taxable income and therefore are not reimbursable under University policy. The following guidelines should be followed in providing meals and light refreshments in connection with a business meeting, entertainment event, or employee morale-building activity:
- Meals should be limited to no more than once a month or twelve times per year, per group.
- Light refreshments should be limited to no more than twice per month, per group.
Meals or light refreshments provided to a group should be counted on an event basis, e.g., a two-day meeting should be counted as one event in determining compliance with these guidelines.
Entertaining While Traveling
- These expenses should be included on a Travel Reimbursement request.
- For a breakdown of per-person entertainment meal reimbursement limits, check out the Entertain While on Travel Status page. Must comply with the UC Entertainment Policy (BUS-79).
- Be prepared to provide the business purpose of the event and the names and affiliations of guests.
Spouse or Domestic Partner of a University Guest or University Host
The cost of meals or light refreshments provided to the spouse or domestic partner of a guest or the official host may be reimbursed provided the expenditure serves a bona fide University business purpose. Exceptional approval is required.
The University permits expenditures for meals and light refreshments provided to academic or staff employees, students, donors, guests, visitors, volunteers, and other individuals for the purpose of conducting substantial and bona fide University business.
Common allowable expenses include entertainment-related activities, business meeting hospitality, recruitment of prospective employees, students and scholars, employee morale-building activities, one-the-job meals, programmatic activities, and quantity purchases (see allowable expenses for more details).
Per-person Maximums by Expenditure Type
$31 per person
$54 per person
$94 per person
$22 per person
When Maximums are Exceeded
The event coordinator must obtain approval for policy exceptions when the per-person maximum rates are exceeded. Maximum per-person rates include costs for labor, sales tax, delivery charges, and other service fees. These rates do not include any costs associated with facility rental, equipment rental, decorations, and other items which may be charged as an additional expense.
Unallowed expenditures that may not be reimbursed, recharged, or paid to a vendor are:
- Entertainment expenses that are lavish or extravagant under the circumstances
- Expenses that represent additional taxable income to an employee or student under Internal Revenue Service (IRS) regulations
- Monetary contributions to a political campaign or candidate
- Entertainment expenses for employee birthdays, weddings, anniversaries, or farewell gatherings (excluding celebrations for retirement or for employees separating from the University employment with at least 5 years of service
- The purchase of property or services for personal use or for a non-business reason
- Expenditures that are not permitted under the terms governing restricted funds
Entertainment events sometimes provide the occasion to give a gift. A gift is an item of tangible property presented to acknowledge employee recognition, sympathy, appreciation, goodwill, achievement, participation, etc, There are limits to the type and value of gifts that may be purchased with University funds. For gifts and recognition awards to employees, see BFB-G-41. Policy BFB-G-42 covers gifts presented to non-employees on behalf of the University
Reporting Entertainment Expenses
When to Submit a Report
Employees seeking reimbursement of meal and entertainment expenses must submit their report(s) within 45 days of the end date of the meeting or event. Expense reports submitted late may still be paid with appropriate approvals; the amount of the payment may be reported as taxable income.
When is the Host Certification required? See Entertainment Expenses Requiring Additional Approval to confirm when Host certification is required by policy.
The approving authority must make several determinations prior to approving a reimbursement request:
- Does the expenditure serve a clear business purpose?
- Is the expenditure reasonable and in compliance with the best use of University-administered funds?
- Does the expenditure meet the condition of not creating taxable income for the employee or student?
- Is the expenditure allowable and funded under the specified fund source?
- Did the requester consider alternative entertainment expenses that would have been equally effective in achieving the desired objectives (e.g., less expensive venues or caterers)?
To ensure proper internal controls, an individual with delegated approval authority may not authorize payment of the entertainment expenses of anyone to whom he or she reports either directly or indirectly. In addition, individuals with delegated approval authority shall not approve their own entertainment expenses or the entertainment expenses of a near relative.
Higher Level Approval
Certain expenses authorized under UC Policy BUS-79 require additional approval at a higher level. For example, tickets to a sporting, theatrical, or musical event; employee morale building and recognition events require additional higher level approval.
Per the April 11, 2019 memo from EVCP Alivisatos, Deans and Vice Chancellors may make exceptions to the per-person meal limit up to 150% of the current standard rate. Any requests more than 150% of the standard limits will require pre-approval. The request for payment/reimbursement of such expenses must include a compelling written justification as to why the higher costs were unavoidable and necessary to achieve a valid University business need. Exceptional entertainment requests that are more than 200% of the standard limit require the approval of the Chancellor and are also subject to pre-approval review. Please note that you will be responsible for non-approved expenses that exceed these limits. Pre-approval requests must be submitted by email to Jules Freedman at firstname.lastname@example.org.
Below are examples of circumstances where policy exceptions may be needed:
- Meals or light refreshments obtained at the hotel/conference site where a meeting is being held
- Meals or light refreshments must be delivered by a caterer to promote continuity, or due to an event location precluding access to nearby eating facilities
- An event that must be held at a prearranged place appropriate for the event or the expected business benefit
- Expenses of $75 or more per event must be supported by itemized receipts, or acceptable electronic receipts, which must be submitted with the request for payment (see documentation and receipts for more details). For guidance on additional restrictions, contact your research administrator or department business officer.
- A valid receipt contains payee's name, amount, date, place, identification of what was purchased and proof of payment.
- If you lost a business receipt and have exhausted all efforts to obtain a copy from the merchant, provide an explanation with your reimbursement request including the details of the purchase and your declaration that the amount claimed is the amount actually paid by you and that you have not and will not seek reimbursement from any other source. A copy of a credit card statement can substantiate that you made the purchase, but does not provide the details of what was purchased, so does not serve as a stand-alone receipt replacement.
- Auditors expect to see receipts to support the payment of a business expense; if a payment is not proven to be business related, it may be disallowed for reimbursement or reported as taxable income.