Page History

2-9: Hospitality and Entertainment Policy: Guest Meals, Business Meals, Receptions

Issued: 8-1989

Revised: 98-20132023

I. Purpose

It is understood that the business of Fort Lewis College (the College) requires some expenditures of an entertainment nature. In all cases however, there must be a clear, documented, business purpose for the event/expenditure that indicates the event's benefit to the College. While responsible judgment should be used when expending any College funds, particular care should be exercised for hospitality expenditure. Individuals responsible for making decisions concerning hospitality expenditures should always question whether the proposed expense represents an appropriate use of College funds. Thoughtful consideration of each decision will ensure that College resources are expended appropriately. In addition, as with all contract or grant funds expenditures, it is the responsibility of the Principal Investigator (PI) to guarantee that all expenditures are made in accordance with all applicable contract or grant restrictions. In considering incurring expenses such as those addressed in this policy, PI's should keep in mind that the more restrictive policy/contract terms or budget (the College vs. contract/grant) will prevail. Thus if the contract terms are more liberal than the College’s policy, the more restrictive policy (the College) will be enforced. Federal grant funds may not be used for entertainment costs, including amusement, diversion, and social activities, which are unallowable under Office of Management and Budget (OMB) circular A-21.

II. Definitions

Hospitality Expenses: The provision of food, beverages, activities, or events for the purpose of promoting and furthering the mission of the College.

Business Entertainment and/or Other Social Events: Events involving faculty, staff or students, and guests of the College in which a substantial purpose of the event is social in nature.

Business Meals:  Meals at which faculty, staff, students and other external parties are present for the purpose of conducting focused discussions on College business, which include: banquets, committee meetings, conferences, departmental meetings, interviewing prospective employees, potential donors, recruiting prospective students, research sponsors/collaborators, retreats, seminars, and workshops.

IIIThere are occasions when extending hospitality through meals and entertainment is in the best interest of the College. This policy identifies the limited situations in which College funds may be used to pay for meals and entertainment.  

A clear business purpose must exist when expending any College funds. To ensure that resources are being used appropriately and that we are being good stewards of the funds entrusted to us consider these questions: 

1. Is the expenditure in line with the guidance provided in this document? 

• If not, is there a good explanation as to why the expenditure is appropriate? 
• Has it been adequately documented?

      2. Could the amount spent be defended under public scrutiny? 

• Would you be free from worry if the expense was selected for audit or media inquiry? 

Funds for expenditures of this nature are generally unallowable on grants and should be funded by unrestricted funds of the College.

II. Key Compliance Matters

From an IRS perspective, for meals and entertainment to qualify as a business expense, they they must be ordinary and necessary and not lavish and/or extravagant and must be directly related related to or associated with the College's mission. In addition, a College employee must be present at at the meal/event for it to meet the IRS business expense regulations. Because the IRS imposes imposes strict substantiation/documentation requirements on such expenditures, the College must be able to provide requires the following documentation on such expenses: 

• Total amount of reimbursement/payment requested
• Date, time, and place of function
• Specific business purpose served by the expenditure
• Business relationship to the College of each person in attendance
• Submittal of expenses for reimbursement within a reasonable time limit

• List of attendees
• Documented business purpose (e.g., signed meeting agenda)
• Cost, supported by detailed receipt
• Date and location of meal 

*Per IRS regulations, meals and entertainment expenses are considered taxable income to the employee if the expenses do not meet the criteria of this policy and are not substantiated with sufficient supporting documentation. 

Amount

Expenditure amounts for business meals must be reasonable and acceptable .The cost of alcoholic beverages consumed during a meal will not be reimbursed. Where applicable and appropriate, tips and gratuities may be allowed, but shall not exceed 20% of the allowable portion of the bill.

b. Business Purpose/Relationship of Attendees

For a business meal to be reimbursed, a business purpose with a list of attendees and their business relationship to the College is required by the IRS regulations. A detailed list of attendees will be required for meals up to and including 10 people. For a group of more than 10 people, a description of the group will suffice. A specific business purpose must be documented for all expenditures for which an employee is requesting reimbursement. This information should be provided with the check request form.

Business purpose must be specific. “Dinner with donor to discuss alumni event ideas” is an appropriately documented business purpose. “Dinner with donor” is not. The business purpose of an expense may be obvious to the employee, but not to a third party, reviewer, such as the IRS.

c. Receipts

Original receipts for all expenses are required for reimbursement or filed with p-card documentation. A receipt must contain:

• • the date of purchase
  • the vendor name
  • itemized list and unit price of the purchased items
  • the total amount

No reimbursement will be made for non-itemized or missing receipts unless accompanied by a statement explaining the expenses and reason for not providing itemized receipts, which has been approved by the Controller. P-card users will be randomly audited to ensure all itemized receipts are maintained.

d. Reimbursement Submission Time Limit

Reimbursement requests must be submitted no later than 60 days after the date of the expense, or the end of the fiscal year, whichever is sooner.

shall not exceed the per diem. Meal rate for the meal being provided (breakfast, lunch or dinner) as defined by the government agency website that sets per diem rates. 

Charges for alcohol may not be paid from College funds. 

IV. Allowable Hospitality Expenses:

Allowable hospitality expenses have been divided into general categories. They include ‘Meals or Refreshments Served during Business Meetings’include ‘Business Meals’, ‘College Functions, Receptions,   and Retreats’, ‘Meals and Flowers Purchased by Student Groups’, and ‘Meals Provided during during Class Field Trips’. 

Allowable hospitality expenses are the responsibility of departmental and/or Vice President President budgets. Sponsored program accounts may be used if the expense is specifically approved in in the budget and is in accordance with sponsor guidelines, restrictions and College policy. When charging charging hospitality expenses to the above funding sources, expenses for alcoholic beverages are are prohibited. 

Following is a description of each of the categories along with examples of allowable allowable hospitality expenses. 

Meals or Refreshments Served During Business Meetings:

The College may pay or reimburse

for actual expenses incurred for

meals whose primary purpose is a business discussion.

Generally, the attendees should include at least

one non-College employee whose presence is necessary to the business discussion.

Expenses may be incurred only for those individuals whose presence is necessary to the

business discussion. These may occur either locally or during out of town travel. 

The College will not pay or reimburse meal expenses that lack documentation or a

clear business purpose.

In order to qualify for College payment, meetings attended solely by College employees

must be agenda driven and directly concerned with the business of the College, must be infrequent, and the meeting time encompasses a regular meal time that could not otherwise be scheduled during regular working hours. 

Following are examples of business meeting where meal and refreshment

expenses are allowable. 

• Meals related to the individual recruitment of faculty or staff. When
entertaining 
• entertaining prospective employees, only meal expenses for the prospective employee and
the 
• the principal individuals involved in the decision-making process will be
considered 
• considered allowable meal expenses. When the spouse/partner of the prospective employee
is 
• is present at the meal, the College will also reimburse the meal expenses of
the 
• the spouse/partner or guest of the principal individuals responsible for the recruiting. 
• Meals or refreshments served during College sponsored meetings of
advisory 
• advisory groups, outside reviewers, or other committees when the group is composed
of 
• of both College employees and non-employees. 
• Meals for individuals invited as academic visitors to contribute to the
intellectual 
• intellectual life of the College community. Normally, such visitors will deliver a seminar,
 
• colloquium talk, or other lecture or performance for the benefit of College
faculty 
• faculty students and/or the community at large. 

• Working breakfast, lunch or dinner meetings, when groups of employees
are 
• are giving up personal time to conduct College business with a non-College
employee 
• employee whose presence is necessary to the discussion. 

College Functions, Receptions and Retreats

College funds may be used to provide food at a meeting, reception, seminar, retreat,

workshop, orientation, Board meeting, meetings with external stakeholders,

activities involving volunteers, activities in which a majority of the participants are students or

other College sponsored programs or activities. Invoices, payment requests, or procurement

card receipts for these expenditures must include a brief description of the business purpose

of the gathering and a list of attendees. 

 Following are some examples of allowable functions, receptions and retreats: 

• Annual campus-wide holiday receptions
Receptions for any employee who retires or terminates from the College, providing that the employee has 15 or more years of service with the College.
•  
• Receptions for faculty, staff, and students/families when the predominant numbers
of 
• of those in attendance are
students.Receptions to present or to acknowledge awards to faculty, staff,
• students
, and alumni for outstanding accomplishments.
• and their families. 
• Receptions to honor visitors, guests, or dignitaries. 
• Receptions for the opening of new exhibits at College facilities.
• Beverages and snacks provided for meetings when these meetings do not have a non-College employee present with a clear business purpose. Maximum amount allowable is $5 per person.
• Meals provided during team building events designed to develop a team and improve performance. These meals must be “occasional” in nature (no more than six times per fiscal year).
• Flowers may be purchased for convocation and commencement. Flowers may be purchased for speakers and other official College events, with the prior approval of President or Vice President.

• Meals provided during annual or bi-annual department faculty/staff retreats.  These meals are allowed twice per year. 

Meals Purchased by Student Groups

Food  paid for by student fee funded organizations are allowable with

approval of the RSO President and Treasurer. 

Meals Provided During Field Trips

Meals may be purchased for field trips only if paid for with fees that have been

approved for that purpose. 

V. Unallowable Hospitality Expenses

Certain hospitality expenses are unallowable on College funds. Following are examples of of unallowable expenses. 

Alcoholic beverages:

The purchase or reimbursement of alcoholic beverages is not allowable with

College funds.

Departmental holiday and other social functions:

Departmental functions that are considered personal are not authorized for

reimbursement by the College. Expenses related to holiday receptions, luncheons, greeting cards,

decorations, birthday parties, etc., are not allowable on College funds.

Office coffee break & refreshment supplies:

Supplies for coffee breaks, office refreshments, etc., are considered personal and may not

be purchased with College funds. 

Items of a personal nature:

Expenses for items of a personal nature are unallowable on College funds.

Examples include memberships in golf clubs, memberships in Outdoor Pursuits, etc.

VI. Authorization and Responsibilities

a. Dean, Chair, or Department Head: The Dean, Chair, or Department Head is responsible for authorizing allowable meals/events that costs $300 or less.

b. Vice President: The appropriate Vice President must provide prior approval allowable meals/events that cost over $300.

Expenditures not addressed in this policy may be addressed in the College P-Card Policy.