Entertainment - General Expenditure Guidelines

Entertainment - General Expenditure Guidelines

Abstract:
In some instances, reasonable entertainment costs may be funded by UAB. This document describes the types of events which may be compensated by the university.
Effective Date:
10/11/2007
Responsible Party:
Contacts:
None Assigned
Administrative Category:
Applies To:
Faculty, Staff
Material Original Source:

Entertainment - General Expenditure Guidelines

Introduction

Reasonable costs of entertaining might, in some circumstances, be funded by UAB, but only if it can be demonstrated that UAB will directly benefit from making the expenditures and if those costs were incurred at UAB's request.

Important Note: The State Examiners generally consider entertainment of UAB employees or other State of Alabama employees to be an unallowable cost. Also, you need to be aware that Federal OMB Circular A-21 regulations do not permit most true entertainments costs to be charged directly to federal grants.

These entertainment guidelines do not include the following topics, which are addressed elsewhere in the UAB Expenditure Guidelines:

  • Food and beverages incidental to a UAB business meeting or an internal training program for UAB employees (see the General section of the UAB Expenditure Guidelines for the rules applicable to such incidental meals and refreshments).
  • UAB employee business retreats (see the Faculty/Staff Retreat section of the UAB Expenditure Guidelines), which are treated more as business meetings with special pre-approvals required.

UAB-funded entertainment can take a variety of forms. Entertainment might be in the form of simply taking guests out to a restaurant meal, or it might involve a more organized entertainment "event" such as hosting a banquet or reception. In addition to the general entertainment documentation requirements, an entertainment "event" is subject to the event pre-approval requirements as outlined below. However, though they are subject to the general entertainment guidelines, the event pre-approval requirement does not apply to:

  • Conference/Seminar Refreshments (as defined below)
  • Business Meals (as defined below)

In addition to requirements unique to entertainment, such costs are, of course, subject to UAB's normal procurement policies and procedures, as well as general expenditure documentation requirements. See the Signatures & Documentation sections of the UAB Expenditure Guidelines and the UAB Procurement web site.

All entertainment costs should be reasonable in amount considering the type of occasion, the number of persons present, and the time and place of the entertainment.

Conference/Seminar Refreshments

Meals and refreshments served at public conferences, seminars, workshops, or continuing education classes produced by UAB primarily for external participants are regarded as being a form of entertainment, and should be charged to object code 8351010 "Conference/Seminar Refreshments".

However, meals and refreshments incidental to internal training classes, seminars, workshops, etc. are not considered entertainment, and therefore should not be charged to an entertainment object code. Instead, object code 8709030 "Incidental Refreshments" should be used. See the General section of the UAB Expenditure Guidelines for the rules applicable to such incidental meals and refreshments.

Business Meals

Entertainment in the form of restaurant meals involving individuals from outside UAB should be charged to object code 8351020 "Business Meals".

However, meals and refreshments incidental to an internal UAB business meeting (but restaurant meals do not normally constitute a business meeting) are not considered to be entertainment, and therefore should not be charged to an entertainment object code. Instead, object code 8709030 "Incidental Refreshments" should be used. See the General section of the UAB Expenditure Guidelines for the rules applicable to such incidental meals and refreshments.

UAB Sponsored Entertainment Events

A "UAB-Sponsored Entertainment Event" is defined as an entertainment event organized by and/or sponsored by UAB. UAB-Sponsored Entertainment Events include, but are not limited to, the following types of events:

  • "Appreciation Event" - An event held for the primary purpose of acknowledging major gifts and other types of support for UAB by external parties.
  • "Celebratory Event" - An event held in honor of an accomplishment or milestone achieved by UAB. (Anniversary celebrations, etc.)
  • "Ceremonial Event" - An event held in accordance with established protocol or tradition. Such events include, but are not limited to:
    • Graduation Ceremony
    • Distinguished Lecturer Award Ceremony
    • Excellence in Teaching Award
    • UAB Employee Service Award Ceremony sponsored by HRM
    • Building dedications that may include a dinner honoring the individual for whom the building is being named.
  • "Cultivation Event" - An event held to expose the attendees to areas of potential interest that may lead to financial or community support for UAB research, programs, and services. There must be a clearly predominant non-social purpose for the event, the purpose of which is to impart serious information from UAB to the attendees. It cannot simply be a social event with some vague hope that if they "have a good time" they will be more inclined to support UAB in the future.
  • "Endowment Funded Visiting Lectureship" - An event held in accordance with the terms and conditions of an endowment that provides for the payment of expenses associated with a visiting lecturer. A reception for the lecturer(s) will be considered part of the expenses normally associated with the visiting lecture event when allowed by the terms and conditions of the endowment.
  • "Fundraising Event" - An event for which the participants pay per person, table, plate, etc. and the net proceeds are pledged for a UAB business purpose.
  • "Information/Education Event" - An event held to provide information about programs and services at UAB or to educate the participants about any aspect of UAB programs, priorities, or activities. Employee orientations and student orientations are examples of an information/education event.
  • "Introductory Event" - An event held to introduce a new UAB employee in order to establish relationships that may assist the employee in achieving the goals and objectives of the position. The benefits of an introductory event should be clearly stated and must be rational and reasonable with respect to the position held by the individual. Such events are common for UAB officials such as:
    • President
    • Provost
    • Vice President
    • Dean
    • Hospital CEO
  • "Employee Recruitment Event" - An official UAB event substantially oriented for, and the primary audience is expected to be, prospective UAB employees and their spouses (or 'significant others'). However, this event category does not include Business Meals as discussed above.
  • "Solicitation Event" - An event held for the primary purpose of raising money. The intent of these events is to receive donations or pledges. The attendees are expected to pay or pledge money in advance of attendance or while in attendance.
  • "Student/Trainee Event" -- An official UAB event substantially oriented for, and the primary audience is expected to be, individuals who are currently UAB students or trainees and their families, or individuals who are prospective students or trainees and their families.
  • "Ticket Event" -- A ticket event is defined for this purpose as any event that is open to the general public that requires a ticket or payment for admission and cannot be appropriately categorized in another category. Such events include, but are not limited to, music, dance, drama productions/performances, or athletic events.
  • "Homecoming Event" -- Event held during designated UAB Homecoming week substantially oriented for UAB students, prospective students, or alumni.The event may also be attended by faculty, staff, or contributors to the university. These events are funded by student fees.

If a related event is held in conjunction with the Ticket Event, its business purpose must be rational and reasonable and based on established custom or protocol. The UAB costs of such a related event must be paid directly from the revenue generated from ticket sales and/or sponsorships for the event. If a proposed related event does not meet all of these criteria then it cannot be classified as part of the ticket event, and therefore, must be evaluated on its on own merits subject to these guidelines.

Non UAB Sponsored Entertainment Events

A "Non-UAB-Sponsored Entertainment Event" is defined for these purposes as an entertainment event organized by an external entity, rather than by UAB. Non-UAB-Sponsored Events do not include employee-training costs such as conferences, workshops, continuing education classes, etc.

UAB employees designated to attend a Non-UAB-Sponsored Entertainment Event (as defined above) in an official capacity may have otherwise-allowable costs paid from UAB funds, but only if the business purpose for attending is defined and approved at the executive level. The Event Approval Form should be used to obtain the special pre-approvals and to document the business purpose and official capacity of the individual representing UAB.

If an employee is present in an unofficial capacity, they will be considered solely an attendee. Any expenses incurred by or on behalf of an employee who attends an event in an unofficial capacity are considered personal expenses and cannot be reimbursed from UAB funds

Events, which are sponsored by civic or charitable organizations, should meet one or more of the following criteria in order to justify official participation (and/or UAB joint sponsorship):

  • The event or function is sponsored by, or is for the benefit of, an organization that provides significant funds to support the University's education, research, or service mission. (Examples include the American Heart Association, American Cancer Society, Muscular Dystrophy Association, Linley-Heflin Unit, the Women's Committee of Spain Rehabilitation Center, etc.).
  • The event is sponsored by an organization to which the University holds a membership or the function includes all prominent members of the local civic and corporate community. (Examples include events sponsored by United Way, Greater Birmingham Area Chamber of Commerce, Operation New Birmingham, Metropolitan Development Board, etc.).
  • The event honors an individual who has strong political and/or philanthropic ties to UAB or is a current or former University official. (Examples include the March of Dimes Citizen of the Year Banquet, Re-Entry Ministries "Builders of Birmingham" Banquet, Arthritis Foundation Humanitarian Award Dinner). However, under no circumstances may UAB fund political campaign costs.

Event Pre Approval

Prior to incurring cost commitments associated with a UAB-Sponsored Entertainment Event (as defined above), the UAB Event Pre-Approval Form should be completed. Click here for a printable copy of the blank form.

If a draft of the invitation or announcement is available at this point in the planning stage, it should be attached to the Event Pre-Approval Form to document a UAB-Sponsored Entertainment Event's official business purpose. However, the Event Pre-Approval Form (and its associated University Development Office and executive level approvals) is not required by Central Administration for the following types of events, though all other aspects of these guidelines do apply:

  • An official UAB event substantially oriented for, and the primary audience is expected to be, UAB students or trainees, prospective UAB students or prospective trainees, and their families, including Student /Trainee Events as defined above
  • Endowment-Funded Lectureships (as defined above)
  • Ticket Events (as defined above)

The Event Pre-Approval form is also required to obtain official approval to expend UAB funds on costs associated with attending the Non-UAB Sponsored Event (see above).

The Event Pre-Approval Form requires the approval of the department head, school/college executive level, and the appropriate Central accounting department, indicating their pre-approval of the event.

Once the department begins submitting requisitions for payment of costs associated with the Event, a copy of the applicable fully approved form should be attached to each of the applicable requisitions.

Unallowable Costs

Because the State Examiners generally regard the costs of social activities for UAB faculty and staff to be unallowable costs, entertainment must be substantially oriented for individuals from outside of UAB. A "Social Event" is defined as an event held as an act of etiquette or politeness, or for the purpose of enjoyment or merely to entertain or associate with the attendees. An event that is held for the benefit of an individual is also generally considered a social event. Public monies cannot be expended for the personal benefit of an individual; therefore, Social Events cannot be funded using UAB funds. Such social events include, but are not limited to: retirement or other employee receptions, appreciation events for UAB employees (including appreciation days honoring a profession such as National Nurses Day, National Secretaries Day, Physical Therapy Day, etc.), holiday parties, wedding showers, baby showers, birthday parties, etc.

Even if the entertainment occasion itself is considered a legitimate UAB business event, the State Examiners and the State Attorney General's Office have consistently ruled that UAB cannot fund the purchase of alcoholic beverages. Also, federal OMB Circular A21 regulations consider the costs of alcoholic beverages to be unallowable. Therefore, alcoholic beverage or related costs can never be paid for or reimbursed by UAB. Some examples of alcohol-related costs include: corkage fees, taxes on the alcohol, tips directly attributable to the alcohol (such as tips to a bartender for alcoholic beverage service, tips to a wine steward or sommelier, the applicable portion of a percentage meal tip or service charge, etc.). The person requesting a payment is responsible for ensuring that all alcoholic beverages or alcohol-related costs have been excluded from payment requests prior to submission to make it clear what is included in the reimbursement request.

Even if the entertainment occasion itself is considered to be a legitimate UAB business event, the State Examiners generally consider the cost of musicians or other entertainers to be an unnecessary and unreasonable use of State funds. However, this does not apply to ticket or ticket-related events (as defined above), student events paid from student fee accounts, or patient events.

Costs associated with an employee's family/friends/etc. are not normally legitimate entertainment costs. Documentation as to the benefit UAB will receive from their participation must be stated when entertainment costs include the costs of an employee's family/friends. However, if the external guest's spouse or 'significant other' is present during the entertainment occasion, the cost of an employee's spouse or 'significant other' is assumed a legitimate entertainment costs. Whether or not it is appropriate to invite the guest's spouse or 'significant other' is a matter of judgment based upon what is reasonable and customary for the type of event, the time of day, etc.

Payment Requests

Contracts and invoices for entertainment services or supplies must itemize all costs in sufficient detail to satisfy the State Examiners' requirements for control of unallowable costs and to facilitate classifying the expenses in the appropriate object code category.

For catering services, documentation should include a full menu with sufficient specification of "beverages" so as to make it clear that no alcoholic beverages are included in the reimbursement request (if this is not clear, then the requisition must include a certification that no alcoholic beverages or any alcohol-related costs are included.) See explanation of "alcohol-related costs" under the Unallowable Costs section above.

For restaurant meals, if the receipt does not itemize the purchases, the requisition should include a certification that no alcoholic beverages nor alcohol-related costs are included. See explanation of "alcohol-related costs" under the Unallowable Costs section above.

The following documentation should be provided with requisitions applicable to all entertainment expenditures:

  • A copy of the signed Event Pre-Approval Form (see above), if applicable
  • All entertainment events should have a business purpose that is rational and reasonable to the extent that UAB will be funding the event. That business purpose must be clearly specified on the copy of the Event Pre-Approval Form attached to the requisition, or on the face of the requisition itself if an Event Pre-Approval Form is not required by these guidelines.
  • The type of event. This should already be described on the copy of the Event Pre-Approval Form attached to the requisition; but if an Event Pre-Approval Form was not required, then the event should be described on the face of the requisition itself.
  • A copy of the invitation and/or other materials announcing, publicizing, or marketing the event. The invitation helps in clarifying the official nature of the event, as well as identifying the date, time, and place of the event. If such materials are not applicable to the event, the date, time, and place should be clearly documented on the face of the requisition itself.
  • Where appropriate, a copy of the program or agenda should be included to assist in classifying and justifying an event. If the program or agenda is not final, a tentative copy may serve as sufficient documentation for the initial expenditures.
  • A guest list is the best form of documentation to substantiate the intended audience. Therefore, a guest list should be provided with most disbursement requisitions to facilitate event classification. A guest list is not required if the event is open to the UAB community at large and/or the general public, or a broad category of faculty, staff, students, trainees, prospective students or prospective trainees. A guest list is also not required for a ticket event or its related event. When a guest list is not provided, the department must ensure that the other documentation clearly and fully identifies all groups and their approximate numbers of people expected to attend the event.

When a guest list is submitted, it should include the individuals' names and the organizations they are officially representing or the group that the individual is a member of such as The Board of Trustees, Leadership Council, etc. UAB employees and their respective departments should be listed separately from the other guests.

In lieu of providing a copy of the guest list with each requisition related to an event, the department may note on a requisition the requisition number, requisition date and vendor name of a previously processed requisition that included the guest list for the event, and should always state on the requisition the group or category of individuals the event is oriented for. If the guest list is not attached to subsequent requisitions, there should be at least one requisition on file in the payment system that includes the guest list and all subsequent requisitions related to the same event must reference the Requisition Number of the requisition containing the list.

Payments to individual independent contractors should never be charged to entertainment object codes. See UAB Personal Services Website.

The cost of meals and refreshments served at public conferences or seminars hosted by UAB, should be charged to the entertainment object code 8351010 "Conf/Sem Refreshment". The cost of entertainment in the form of restaurant business meals involving individuals from outside UAB, should be charged to the entertainment object code 8351020 "Business Meals". All other entertainment costs not more appropriately coded elsewhere should be charged to object code 8351099 "Entertainment".