Business-Related Hospitality and Entertainment Expenditures

Purpose/Scope

Authority

University Guidelines

Table of Contents

1. What Are Business-Related Hospitality and Entertainment Expenditures?
2. Allowable Expenditures
3. Student-Oriented Special Programs and Events
4. Allowable Funding Sources for Hospitality and Entertainment Expenditures
5. Expenditure Limits
6. Disallowed Expenditures and Exceptions
7. Alcohol Restrictions
   1. Serving Alcohol at On-Campus Events
   2. Serving Alcohol at Off-Campus Sites
8. Reimbursement Procedures and Documentation
   1. Exceptions to the BEF Process
   2. Supporting Documentation
   3. Completing the BEF
   4. Certifying the Completed BEF
9. Account IDs
10. Responsibilities

There are occasions when the judicious extension of hospitality in connection with official UTSA business is in the best interest of UTSA. Expenditures of UTSA funds for hospitality and entertainment should support the institutional mission with a clear business purpose.

UTSA generally considers hospitality and entertainment expenses to be personal in nature and not subject to reimbursement or direct payment. Educational and General funds (Fund 21xx) cannot be used for hospitality and entertainment expenditures. However, some hospitality and entertainment expenses incurred in the normal course of UTSA business can be charged to certain other UTSA funds pursuant to this guideline.

The information here is provided as a guide for understanding UTSA procedures. It is not intended as tax advice, nor does it guarantee any tax consequences (or lack thereof) to any employee.

May be purchased and sent in the name of the department or office for a memorial service or extended illness of an employee; an employee's spouse, sibling, child or parent; or a retiree. Flowers may be purchased for other occasions that serve a UTSA business purpose.

Functions or meetings when UTSA provides hospitality to official guests (for example, the UT System Board of Regents, accrediting agencies, officials from other universities, public officials) and recruitment activities for prospective students, faculty and staff. The department needs to provide the vice president for Development and Alumni Relations (VPDAR) with prior notice of the official guest invitees.

Expenditures associated with attending a non-UTSA sponsored event, benefit, charity or community function are allowed if the primary purpose is to fundraise/network on behalf of UTSA. Prior approval by the VPDAR or designee is recommended, but not required. If advance VPDAR approval is not obtained, then individual meal limits apply and costs in excess of the established meal limits must be approved by the appropriate vice president (VP) or designee.

Meals may be provided to employees during work hours as a non-taxable benefit when UTSA requires employees to be on-site or in meetings during mealtimes. The IRS provides the following examples of meals provided primarily for the convenience of the employer and not for a compensatory purpose:

• When an employee needs to be on emergency call during the meal period
• When an employee needs to take a shortened meal period and cannot leave the workplace to take a meal (e.g., because peak workload occurs during a normal meal period)
• When there are no food providers or eating facilities in the vicinity of the employee's workplace

Employees working on campus: Meals may be provided if UTSA requires the employee to be on-site for a UTSA business purpose. For example, a meal can be provided for the benefit of UTSA when employees are required to stay on premises during their entire work shift, either because they are required to work during this period or are on call.

The meal must be provided on the business premises during the employee's working hours. There is no limit as to frequency or number of on-the-job meals that are offered to employees who are required to remain on site.

Employees working remotely: Using food delivery companies such as DoorDash for Work or Uber for Business, UTSA may offer on-the-job meals to employees who are in a remote work environment and required to participate in a virtual mealtime meeting. These companies allow the employer to create a meal program at the employer’s convenience (for example, with employer-defined ordering time frames or the ability to order up to a week in advance of the meeting). Employees may select from local or predetermined restaurants and have the meal delivered to their doorstep in time for the meeting.

Do not use electronic meal vouchers or gift cards for food delivery services. These payment methods are considered cash equivalents and are not at the convenience of the employer (see guidance above).

A spouse or partner’s presence at a function is considered to serve a business purpose if they have a significant role in the proceedings or make an important contribution to the success of the event. Official functions to which spouses or partners are invited as a matter of protocol or tradition may be considered business-related activities. Ceremonial functions, fundraising events, alumni gatherings, community and recruiting events are examples of activities at which the presence of a spouse or partner may contribute to the UTSA mission.

If a spouse or partner has no significant role in the proceedings or performs only incidental duties of a social or clerical nature, their attendance does not constitute a business purpose. In that event, such expenses are not reimbursable.

Recurring special programs and events may receive “blanket” BEF pre-authorization to reduce the paperwork associated with multiple reimbursements and/or One Card purchases. Pre-authorization may be appropriate for functions related to student-oriented programs when the expenditures per attendee are minimal, recurring and paid by student fees.

To obtain blanket authorization in advance of the program, the event sponsor must submit a completed BEF to Disbursements & Travel Services (DTS) for approval and include the following information:

• Estimated total expenditures
• Event/program description
• Anticipated dates (or range of dates for which the blanket authorization would be in effect; these may cover a full fiscal year for areas with annual program budgets)
• List of potential vendor names, including individuals to be reimbursed to the extent known

Official Occasions Cost Centers are the primary allowable funding source for hospitality and entertainment expenses. These Cost Centers are authorized by the president to allow payment of hospitality, entertainment and gift expenses. Funding is evaluated and awarded annually from distributions of interest earnings. The Cost Center title must include the label "Official Occasions." The Office of Budget and Financial Planning monitors transfers to and from these Cost Centers. For more information on Cost Centers, see Financial Guideline — Chart of Accounts.

Local institutional funds (Fund 31xx) other than the Official Occasions Cost Centers may be used if the funds are one of the following:

1. Revenue collected as fees for continuing education, professional development conferences, short courses or a similar purpose where the fee payer would reasonably expect the fee proceeds to be used on food, entertainment or hospitality. This does not include funding from designated tuition. 
   
   EXAMPLE: Food, entertainment or hospitality is advertised in a brochure or other event materials, or in the case of mandatory and incidental fees, the fee justification supports student programs that might include refreshments, decorations, etc.
2. Differential tuition used only for student events.
3. Funds used to pay for hospitality at events that include a broad cross section of the campus community, particularly students and community members. These events are traditional or ceremonial in nature, such as receptions for commencement, parents' day programs, faculty and staff award ceremonies, etc.
4. Facilities and Administrative (F&A) Cost Centers used to encourage further research.

Auxiliary funds (Fund 4xxx) can be used consistent with the collection of the fee revenue and purposes.

Unrestricted gift funds (Fund 55xx Cost Centers designated as unrestricted) can be used for appropriate circumstances and purposes that are reasonably expected to advance UTSA's mission or secure additional gift funds.

Federal grant funds (Fund 51xx) cannot be used for entertainment expenditures. Certain other hospitality and related expenditures covered under this guideline may be allowed by a granting agency but must be in writing (in the grant and grant budget) and pursuant to the scope of work.

The following expenditure limits may not be exceeded without prior approval of the appropriate VP. Any specific event that exceeds $5,000 must also be approved at the VP level. A VP or their subordinate may not approve exceptions for an event at which the VP is the event host, unless the event supports the wider university community.

The meal limits below only apply to business entertainment events and not the daily per diem rates for university travel. There may be occasional situations where a traveler receives the daily per diem rate as well as meal entertainment rate if they host an approved business entertainment event. In those cases, a partial daily travel per diem rate should be considered.

If one event results in more than one payment or reimbursement request, the total event cost must include the sum of all payments and/or reimbursement requests and the cost per person may not exceed the allowable rates.

EXAMPLE: A department holds a reception that includes 50 attendees. The reception involves a vendor payment of $1,522 and an employee reimbursement of $358.38. The department should submit one BEF for the total event cost of $1,880.38 ($37.61 per attendee); the department should not submit two separate BEFs.

If allowed, exceptions must be authorized by the appropriate VP and should be infrequent if at all. A VP cannot approve their own exceptions and any exception by the president must be approved by the senior vice president for Business Affairs (SVPBA).

As a general rule, the following expenditures cannot be paid or reimbursed from UTSA funds:

Alcohol purchases, when allowed, must be in support of events and activities that further UTSA's mission. Alcohol cannot be the primary expenditure on a reimbursement request. State law prohibits the use of any funds under the control of an intercollegiate athletic department for purchase of alcoholic beverages. As a general guideline, alcohol cannot be served at events where the primary attendees are UTSA students. Employees must also comply with UTSA Handbook of Operating Procedures (HOP) 9.18 – Drugs and Alcohol.

Per UTSA Handbook of Operating Procedures (HOP) 9.16 — Use of Alcoholic Beverages, the use of alcoholic beverages is specifically prohibited on property and in buildings and facilities owned or controlled by the UT System or a component institution. The president may waive this prohibition with respect to an event sponsored by UTSA.

An event is considered sponsored by UTSA if a budgeted office or UTSA department is responsible for organizing the event, inviting attendees and paying expenses related to the event, including the purchase of food and beverages. An event is considered to be sponsored even if an outside entity pays for the food and beverages at the event.

Food must be available at all functions where alcoholic beverages are served. A departmental representative in a position of authority must be present at the event. No alcoholic beverages will be served from 8 a.m. to 5 p.m. on normal work days. State law relating to alcoholic beverages will be strictly enforced at all times on property and buildings in facilities owned or controlled by UTSA.

All requests must be completed using the Permission to Serve Alcoholic Beverages form. Send completed forms to the appropriate VP at least seven days before the event, as prior approval is required. The VP reviews the form and provides a recommendation to approve or decline the request to the president.

Payment for alcoholic beverages consumed as part of a meal during authorized business entertainment and hospitality may be allowed without advance approval, provided that

• Alcohol is not the primary business expenditure on an itemized receipt presented for reimbursement. Exceptions require VP approval via a BEF. A VP may not approve their own exceptions.
• Alcohol is served by an individual who is licensed by the Texas Alcoholic Beverage Commission (TABC). If the server is not licensed by the TABC, the procedures for serving alcohol at on-campus events must be followed.
  
  EXAMPLE: If an event is catered at an individual's residence and alcohol is served by the caterer, then the Permission to Serve Alcoholic Beverages form is not required, as long as the caterer is licensed by the TABC. If the caterer is not bartending, the form must be signed in advance of the event or reimbursement will be denied.

UTSA will reimburse entertainment, hospitality and related expenses that are related to or associated with the conduct of official UTSA business (including UTSA sponsored events) and hosted by a UTSA employee.

A completed and approved BEF and supporting documents must be submitted for reimbursement within 90 days from the date the expenses were incurred. BEFs and supporting documents submitted more than 90 days after the event date must have an explanation based on the facts and circumstances for the delay and be approved by the assistant vice president for supply chain or designee. Repeated occurrences may require VP approval.

One BEF is required for each event/business purpose, whether there is one payee with multiple receipts or multiple payees. One BEF (with appropriate documentation) may be submitted for reimbursement of an individual for multiple events or business purposes to minimize paperwork.

A copy of the approved BEF should be submitted with each payment type. For example, a BEF could cover an event paid for by a One Card, expense reimbursement, Purchase Order and Interdepartmental Transfer (IDT) for event set-up. The department should attach the approved BEF as follows:

When allowed, employees may be reimbursed through approval of an Expense Report. Departments should only create the Expense Report after obtaining the aforementioned approvals. Business-related hospitality and entertainment expenditures incurred while on official travel must have a BEF submitted with the Expense Report. Departments also need to include

• A Travel Reimbursement/Settlement (TRS) form if expenses exceed the approved Travel Authorization by 10% or $250 (see Financial Guideline – Travel Reimbursement)
• A Travel Authorization Form if an approved Travel Authorization was not obtained prior to travel

A BEF is not required for advertising and promotional products (such as logo items) that are provided to individuals as giveaways or at training programs, seminars or institutional functions as appropriate. Employee gifts do not fall under this exception and must be documented using a BEF (see Financial Guideline — Employee Awards, Gifts and Prizes). UTSA relies on the individual judgment of department managers to use UTSA funds appropriately.

If parking costs are the only expense incurred, they should be reimbursed using the Mileage/Parking Log for Travel Reimbursement and not with a BEF.

Supporting documentation must be submitted electronically with the PeopleSoft document for all processes for which workflow has been enabled. (See Appendices – UTSA Scanned Document Attachment Requirements in the Creators of Non-PO Vouchers Job Aid on the Financial Affairs training website.)

Original scanned receipts or electronic receipts (containing information equivalent to an acceptable paper receipt) are required:

• Itemized receipts must be submitted for consumable and non-consumable items purchased from grocery or department stores.
• Detailed receipts must be submitted when the total expense exceeds $75 for restaurant and catering expenses. Receipts must include the name and location of the restaurant, the date, the amount, the number of people served and charges for items other than food and beverages, if applicable.

A Declaration of Missing Evidence form must be completed when a detailed receipt is not available. The form must include an explanation for the unavailable receipt and list the attempts made to obtain a duplicate itemized receipt. This is required to determine if the expenditure should be treated as taxable income to the employee. In general, receipts substantiate what has been purchased to ensure that (1) expenses are not lavish or extravagant, and (2) the expenditures are otherwise allowed. Repeated requests for reimbursements to the same individual without the required documentation may be denied.

NOTE: Complete one form per event, even if more than one receipt is unavailable. Do not submit a form for each missing receipt.

For workflow-enabled processes in PeopleSoft, BEF signatures are electronic. The approver's electronic approval signifies approval of all attached documentation, including the BEF. If an alternate or additional approver is required (see below), the alternate or additional approver must be added as an ad hoc approver for that BEF in PeopleSoft.

For other processes, UTSA recommends the use of e-signature software (e.g., DocuSign or within Adobe) for BEF signatures.

Only one event host and one administrator are required to certify each BEF, unless additional exception approvals are required by this guideline. Additional internal approvals required by the VP/division will not be monitored by DTS. 

Incomplete forms will be returned via PeopleSoft workflow to the requestor with a list of missing information. Financial Affairs may forward any disputed expenditures to the appropriate VP or designee for resolution.

All expenditures must be coded correctly for reporting purposes. The following Account IDs are associated with this guideline. It is the department's responsibility to ensure the accuracy of UTSA reporting by selecting the correct Account ID when approving purchasing related documents.

The senior associate vice president for Financial Affairs and deputy CFO is responsible for monitoring expenditures pursuant to this guideline and for recommending revisions as necessary to comply with regulatory requirements and to meet the changing needs of UTSA.

Other senior administrators — Oversight of hospitality and entertainment expenditures is required at the senior administrative level to ensure that employees understand and follow this guideline.

Entertainment expenditures are subject to periodic review by Internal Audit, and may be subject to public information requests.

Disbursements and Travel Services ensure that payment or reimbursement requests are authorized by an appropriate administrator; review all supporting documentation to verify that the amounts are accurate and that appropriate Cost Centers/Funds are used; question any requests that do not appear to be in accordance with this guideline; and timely process reimbursements/payments that comply with this guideline. For more information on Cost Centers/Funds, see Financial Guideline — Chart of Accounts.

Purchasing ensures compliance with this guideline prior to authorization of a purchase order for hospitality, entertainment or other items referenced in this guideline.