Hospitality expenses may be paid to the extent that such expenses are necessary, appropriate to the occasion, reasonable in amount and serve a purpose 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 and auxiliary funds that may be used for such purposes.
This policy governs the manner and extent to which the university and its auxiliaries may provide hospitality to employees, students, donors, guests, visitors, volunteers, and other individuals as part of a business meeting; recreational, sporting or entertainment event; or other occasion that promotes the mission of the university. The policy also addresses meals served to employees as part of a morale-building function and meals provided to prospective students and employees.
This policy governs the appropriate use of the CSU Operating Fund (485), university trust funds, enterprise funds and auxiliary funds unless legally exempted or otherwise restricted; e.g. documented trust agreements. The university and its auxiliaries will comply with additional restrictions when established by funding sources.
ICSUAM 1301.00 Hospitality, Payment or Reimbursement of Expenses, effective December 15, 2011 states that “Each campus and its auxiliaries are required to develop written procedures, consistent with this policy, regarding the payment of ordinary and necessary hospitality expenses”. In addition to ICSUAM 1301.00, authority for this policy is pursuant to California Education Code section 89044. This policy is issued under delegation of authority from the Chancellor to the Executive Vice Chancellor and Chief Financial Officer, and implementation and compliance with the policy is further delegated to the campus Chief Financial Officer. California Education Code sections 66600, 89030, and 89035.
401 Approving Authority
A person to whom authority has been delegated in writing to approve expenses in accordance with university policy.
402 Awards and Service Recognition
Something of value given or bestowed upon an individual, group or entity in recognition of service to the university or achievement benefiting the university; e.g. financial prizes, trophies, plaques, and flowers.
403 Employee-Only Meetings or Events
Meetings or events held by employees when no official guest is attending the meeting or event. These meetings serve a university business purpose and are generally administrative in nature such as campus meetings of deans and directors, extended formal training sessions, conferences, extended strategic planning sessions, and meetings of appointed workgroups and committees. Employee only morale functions must be hosted or approved by the President.
Students who are invited by the official host whose presence at the event is integral to the official business purpose of the meeting or event, are considered official guests, thus the meeting or event is not considered an employee-only meeting or event. However, students attending a meeting or event in their role as a student-employee are considered employees, and not official guests, for purposes of this definition.
404 Entertainment Services
Expenditures incurred in connection with events or activities that are primarily social or recreational such as equipment and venue rental, décor, music, and performers. Service expenditures related to showcasing the talent of students or employees are considered a regular business expense and are not governed by this policy.
405 Federal Officials
Federal government employees, elected representatives of the House and Senate, the president of the United States, presidential appointments, and other representatives of the Executive branch. Federal officials are subject to complicated and extensive ethics rules which should be reviewed before any exchange of an item of value.
406 Fundraising Event
Events conducted for the sole or primary purpose of raising charitable funds where participants make a charitable contribution and a purchase for the fair market value of goods or services.
Something of value given or bestowed upon an individual, group, or entity with the expectation of benefit accruing to the university or for other occasions that serve a bona fide business purpose. Gift cards provided to employees for employee recognition in achievements, accomplishments or other items associated with their employment, or gift cards provided for completing university surveys, providing comment cards, or other such items meant to improve the way the university conducts its operations, are not considered gifts or hospitality. The IRS treats these as employment income, and any such gift card presented to employees are required to be reported as taxable income to the employee.
The provision of meals (catered or restaurant) or light refreshments (beverages, hors d’oeuvres, pastries, cookies), entertainment services, promotional items, gifts, awards and service recognition, and travel expenses of official guests of the university. 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.
409 Membership in Social Organizations
University clubs, athletic clubs, civic organizations and other membership organizations that provide a venue for hosting hospitality events or a means for promoting goodwill in the community. Memberships in business leagues, chambers of commerce, trade associations and professional organizations are considered a regular business expense and are not governed by this policy.
410 Official Host
The university employee who is providing hospitality and responsible for incurring hospitality expenditures that are in compliance with this policy, such as a university or auxiliary employee who hosts guests at a meeting, conference, reception, activity, or event for the active conduct of CSU business.
411 Promotional Items
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 display the name, logo or other icon identifying the university such as a keychain, coffee mug, calendar, or clothing.
412 Official Guest
A person invited by an official host to attend a university meeting, conference, reception, activity or event. Examples of official guests include employees visiting from another CSU work location, students, donors, recruitment candidates, volunteers, members of the community, or media representatives. Students attending a meeting or event in their role as a student-employee are considered employees, and not official guests, for purposes of this definition.
413 Operating Fund (CSU Fund 485)
State appropriation of general tax revenue and student fee revenue for state-supported instruction and related programs and operations. The operating fund includes SO###, RN###, and RT### funds.
414 Other University and Auxiliary Funds (Other Funds)
With the exception of the CSU Operating Fund (485) and trust and agency funds held in a custodial capacity for third parties, all other funds controlled by the university or its auxiliaries including, among others, donor funds, grant and contract funds, reimbursed programs, Continuing Education Revenue Funds, Lottery Education Funds, Enterprise Funds and funds within Auxiliary Organizations.
415 Trust or Agency Funds
Fiduciary funds held by the university or an auxiliary in purely custodial capacity (assets equal liabilities) for individuals, private organizations or government units. Trust or agency funds held by the university or its auxiliaries on behalf of third parties are subject to applicable laws and a written agreement.
416 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.
500 Allowable Expenditures and Occasions
Hospitality expenses must be directly related to, or associated with, the active conduct of official university business. When an 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 employees. In addition, the expenditure of funds for hospitality should be cost effective and in accordance with the best use of public funds.
Specifically, employee business meals or entertainment expenses must conform to IRS regulations. No employee business meal or entertainment expenditure that is considered taxable income under IRS regulations will be reimbursed or paid. An employer’s reimbursement of an employee business meal or entertainment expense may be considered taxable income to an employee if:
- The activity is not directly related to the employee’s job.
- The expense is lavish or extravagant under the circumstances.
- The expense is not substantiated with supporting documentation.
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:
- The university hosts or sponsors business meetings that are directly concerned with the welfare of the university;
- The university hosts official guests, including employees visiting from another CSU work location, students, donors, visitors, volunteers and other individuals with an interest in the university;
- The university hosts: receptions held in connection with conferences, meetings of a learned society or professional organization, meetings of student organizations and groups, student events such as commencement exercises, and events or meetings of other university related groups such as alumni associations;
- The university hosts community relations or fundraising events to promote goodwill, recognize distinguished service, or cultivate donors;
- The university hosts student orientation programs for incoming students and family members;
- The university hosts receptions for the benefit of employee morale, employee recognition, length of service awards, or retirement presentations (see section 503);
- Representatives of the university participate in community outreach to enhance partnerships, promote goodwill, recognize distinguished service, or cultivate donors.
Hospitality expenses incurred while on travel status are subject to this policy.
501 Employee-Only Meetings or Events (see 403 for definition)
When meetings or events are held by university or auxiliary employees, and no official guest is attending, it must be demonstrated the meal is an integral component of the business meeting or event. The requirements for allowable meals or light refreshments are noted below:
- Detailed justification must be provided on the hospitality form stating why hospitality is a necessary and integral part of the business meeting.
- Approval by the authorized signer (approving authority). Approval shall be documented through use of the Hospitality Form for all expenditure methods, except Sonoma State Enterprises (SSE) catering events utilizing an SSE catering contract; however, the contract must contain the same elements, provisions, and approval requirements as the Hospitality Form.
(Note: These requirements apply to all expenditures methods including: Employee Reimbursement (EBER), Direct Pay, Pro-Card, EREQ, and SSE catering contracts.)
Meals or light refreshments provided to employees should be infrequent and must be reasonable and appropriate to the business purpose. Meals or light refreshments provided to employees on a frequent or routine basis are considered taxable income by the IRS and are therefore not permitted under this policy.
- Meals or light refreshments should be limited to no more than twelve times per year, 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 this policy.
The Operating Fund (CSU Fund 485) cannot be used to pay for employee-only meetings and events (see section 413).
502 Meal Limits for Employee-Only Meetings or Events
In accordance with CSU policy, a maximum per person rate shall be established by the Chief Financial Officer for breakfast, lunch, dinner and light refreshments inclusive of the total cost of food, beverages, labor, sales tax, delivery fees or other services. These maximum rates should be reviewed periodically by the Chief Financial Officer. The maximum meal limits for employee-only meetings or events are as follows.
|Meal Type||Maximum Per Person|
Vice Presidents or above may approve limited exceptions to the maximum per person per meal rate with a documented explanation.
Food and beverage hospitality expenses provided for other than employee-only related events are not subject to these meal limits and are approved at the discretion of the approving authority, but must be reasonable and appropriate to the business purpose of the event.
503A Employee Awards, Service Recognition, and Morale
Awards, service recognition, and employee morale functions must be approved by the President as an official university award or service recognition program. Currently pre-approved programs include:
- Annual Service Award Program
- Staff Excellence Awards and Applause Awards
- Staff Appreciation Day
- Excellence in Teaching Awards
Awards, service recognition, or employee morale functions at the department level are not allowable hospitality expenditures, unless hosted or approved by the President.
503B Employee Celebrations of Retirement and Farewell Gatherings
Celebrations of retirement or farewell gathering activities for employees who resign or retire after a minimum of 15 years of service are permissible with a maximum of $750 in university funding. Alcohol may not be purchased with the Operating Fund. The President may approve exceptions to the $750 maximum.
A retirement or farewell recognition gift that is tangible in nature, i.e. flowers, plaque, book, or other customary retirement gifts are allowed with university funding up to $75. Cash or gift cards are not permissible with university funds; however, employees wishing to pool employee donations for such gifts are allowable.
504 Spouses and Domestic Partners
Hospitality provided to the spouse or domestic partner of an employee may be permitted when it serves a university business purpose. Such an individual’s presence is considered to serve a university business purpose if he or she has a significant role in the proceedings or makes an important contribution to the success of the event. Official functions to which spouses or domestic partners are invited as a matter of protocol or tradition such as ceremonial functions, fundraising events, alumni gatherings, athletic games, and community events may be considered business related. An agenda, invitation or similar documentation should be included with the payment record.
505 Students and Prospective Students
Hospitality provided to students or prospective students may be permitted when it serves a university business purpose. Permissible activities may include recruitment efforts, student activities, student programs, student organization events, student recognition events and commencements. Hospitality provided to student athletes and recruits must be in accordance with the rules, regulations, guidelines, standards and procedures of the intercollegiate athletic association’s national governing board; e.g., National Collegiate Athletic Association.
505A Student Programs and Activities
Hospitality expenditures provided to students for programmatic expenditures that serve students in accordance with the purpose of a university program or instructional course are subject to the requirements of this policy.
505B Chartered Student Organization/Club Events
Hospitality expenditures provided by chartered student organizations and clubs are subject to the requirements of this policy. All hospitality expenditures shall be reviewed for compliance with this policy and approved for payment by the Center for Student Leadership Involvement and Service (CSLIS).
506 Sponsored Programs and Other Grant Related Activities
All hospitality expenditures from grant related funds must follow the terms and conditions of the grant or contract agreement. As such, hospitality provided by grant funds must be reviewed and approved by the applicable principal investigator for compliance with the hospitality policy and the terms and conditions of the grant or contract agreement. In the event of a conflict between the grant and university policy, the stricter of the two policies shall apply.
507 Sonoma State Enterprises Catering Services
All hospitality expenditures associated with catering services received from Sonoma State Enterprises (SSE) are subject to the requirements of this policy. Hospitality expenditures for catering services may be approved through use of the SSE catering contract; however, the contract must contain the same elements, provisions, and approval requirements as the Hospitality Form.
600 Unallowed Expenditures
601 Personal Benefit
Hospitality expenses that are of a personal nature and not related to the active conduct of official university business will not be paid or reimbursed. Examples include, but are not limited to, employee birthdays, weddings, anniversaries, bridal/baby showers, retirement, and bereavement or get well gifts. Memorial services, celebrations of retirement, and farewell gatherings for employees separating with at least 15 years of service are only permissible with approval from the President (see section 503).
Hospitality expenses will not be paid or reimbursed for membership in social organizations, activities or entertainment services that discriminate based on race, color, religion, national origin, ancestry, age, gender, sexual orientation, marital status, veteran status, or disability.
700 Funding Sources
Hospitality expenses may be paid from various fund sources, subject to the rules outlined below and the restrictions identified in Table 1.
701 Operating Fund (Includes SO###, RN###, and RT###)
The following restrictions apply to the use of the Operating Fund:
- Operating Fund may not be used to pay for any expenditure prohibited by applicable laws, regulations, or agreements including the California Budget Act.
- Operating Fund may not be used to pay for food and beverages for business meetings attended only by employees of the same work location.
- Operating Fund may not be used to pay for alcoholic beverages, entertainment services, memberships in social organizations, or tobacco products.
- Operating Fund may not be used to pay for gifts.
- Operating Fund may be used to pay for promotional item expenditures, except when the recipients of the promotion items are employees.
- Operating Fund may be used to pay for the participation of employees or official guests at university fundraising events to the extent that such expenditures do not exceed the projected net revenue of the activity.
702 Other University and Auxiliary Organization Funds (Other Funds)
Hospitality expenses may be charged to Other Funds controlled by the university or its auxiliaries provided the expense serves a bona fide business purpose. The following restrictions apply to the use of Other Funds controlled by the university or its auxiliaries:
- Other Funds may be used to pay for alcoholic beverages, awards and service recognition (see section 503), entertainment services, gifts, membership in social organizations and promotional items to the extent these purchases are not restricted by other applicable laws, regulations, or funding source agreements.
- Other Funds may be used to pay for food and beverages when meetings are held by university and auxiliary employees, and no official guest is attending, if pre-approval is obtained from the campus Chief Financial Officer (CFO).
- Federal or local government contract and grant funds may only be used to pay hospitality expenses specifically authorized in the contract or grant, or by agency policy. In the event of a conflict between agency and university policy, the stricter of the two policies shall apply.
- Federal Funds may not be used to purchase alcoholic beverages.
- Other Funds may not be used to purchase tobacco products.
703 Trust Funds Held for Third Parties
Trust funds held by the university or its auxiliaries in a purely custodial capacity (assets equal liabilities) on behalf of third parties are subject to applicable laws and written agreement.
|Hospitality Expenses||CSU Operating Fund1||Other University, Auxiliary, and Sponsored Program Funds2||Trust Funds3|
|Gifts to employees||No||No||No|
|Birthday, wedding, anniversary, bridal/baby showers, bereavement, get well or other similar gifts or events to employees||No||No||No|
|Meals and Light Refreshments for meetings and events attended by official guests||Yes4||Yes||Written Agreement|
|Meals and Light Refreshments for meetings and events attended by only university or auxiliary employees, when no official guest is attending||No||Yes||Written Agreement|
|Employee Awards, Service Recognition, and Employee Morale Functions (Must be an officially recognized program, or event hosted or approved by the President)||Yes||Yes||Written Agreement|
|Employee Celebrations of Retirement and Farewell Gatherings||Yes||Yes||Written Agreement|
|Travel expenses of Official Guests||Yes||Yes||Written Agreement|
|Promotional Items for Official Guests||Yes||Yes||Written Agreement|
|Promotional Items for University Employees||No||Yes5||Written Agreement|
|Gifts to official guests||No||Yes||Written Agreement|
|Membership in Social Organizations||No||Yes||Written Agreement|
|Alcoholic Beverages||No||Yes||Written Agreement|
|Entertainment Services (VP approval or higher required)||No||Yes||Written Agreement|
1Includes SO###, RN###, and RT### funds
2Excludes Lottery Funds. Lottery Funds may not be used to fund hospitality expenditures
3Expenses must be allowable per the written trust agreement
4Excludes alcoholic beverages which are not permitted from the CSU Operating Fund
5Tangible personal property not greater than $75 per employee
800 Approval of Transactions
Hospitality expenses should be reviewed for compliance with this policy by the approving authority, in conjunction with the submission of a payment or reimbursement request and the Hospitality Form in accordance with Table 2 below.
Approval shall be documented through use of the Hospitality Form for all expenditure methods, except Sonoma State Enterprises (SSE) catering events utilizing an SSE catering contract; however, the contract must contain the same elements, provisions, and approval requirements as the Hospitality Form.
The approving authority may not approve their own hospitality expenses and may not approve expenses of their supervisor. The exception is approval of the President’s expenditures by the CFO.
Vice Presidential approval or above is required for payment or reimbursement of hospitality expenditures for a spouse or domestic partner of an employee.
|Meetings and Events with Official Guests||Employee Meetings and Events with No Official Guests||Recreational, Sporting, or Entertainment Events1||Student Programs and Activities2||Chartered Student Club||Sponsored Program|
|Approval Requirements||Approving Authority3||Approving Authority3||Approving Authority3 and VP or higher||Approving Authority3||Approving Authority3and CSLIS4||Approving Authority3
|Hospitality Form Required5||Yes||Yes||Yes6||Yes||No7||Yes|
|List of Participants||Yes||Yes||Yes1||No||No||Yes|
1University related events, such as SSU sporting events or performances, student recreation center activities/events for students, or other entertainment events held for students by AS, Housing or Residential Life, do not require VP or higher signature or list of participants.
2Examples include: instructional programs or courses, programs operated through Residential Life, intramural sports, and other student activities where fees are paid by student participants and goods/services (i.e. food, shirts, trophies, tickets, etc.) are provided to the students as part of the program.
3Person to whom authority has been delegated in writing to approve expenses in accordance with university policy
4Center for Student Leadership, Involvement and Service
5Hospitality Form not required if the elements, provisions, and approval requirements are within the SSE Catering contract
6Events showcasing the talent of students do not require a hospitality form (i.e., SSU sporting events, student recitals, student plays, etc.)
7Hospitality Form is not required when club funds are used. A CSLIS official certifies hospitality compliance on the “Club Account Expenditure Voucher”. If university funds are used, the Hospitality Form is required.