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One category of costs that should receive special attention are
entertainment and meals expenses. In general, entertainment expenses are not
allowable on federal sponsored research awards. The allowability of
entertainment expenses on non-federal sponsored research awards depends upon
the guidelines of the specific sponsor. For federal sponsored research awards,
entertainment has been loosely defined by OMB (Office of Management and Budget)
Circular A-21 as "Costs incurred for amusement, social activities,
entertainment, and any items relating thereto, such as meals, lodging, rentals,
transportation, and gratuities, are unallowable." The following guidelines
should be used in determining the allowability and categorizing of expenses for
meals, lodging and social activities on federal sponsored research awards:
- Alcoholic Beverages are not allowable on federal sponsored
research awards unless specifically authorized in the approved budget and
consistent with the purpose of the award. The instances where alcohol is
approved in the budget are extremely rare. Alcohol purchased during meals,
travel, conferences or meetings should be deducted from the amount to be
charged to a sponsored research award. Alcohol expenses should be charged to
the designated expenditure type when allowed on a non-federal sponsored
research PTAEO account or charged to a departmental GL account to prevent
these charges from being included in the Facilities and Administration Cost
calculations.
Travel, Meals & Entertainment Expenses Related to Federal
Sponsored Research Awards Continued
- Reasonable and actual out-of-pocket expenses incurred while traveling to a
scheduled meeting are allowable when the travel will provide direct benefit to
the award. Allowable expenses related to travel include meals for the
individual. Guest meals and expenses are not allowable and should be deducted
from reimbursement requests. Travel expenses should be charged to the
appropriate travel expenditure type.
- Meals for subjects and patients under study are allowable when included in
the approved budget. Meals for research subjects should be charged to the
appropriate expenditure type.
- Certain meals that are an integral and necessary part of a conference (i.e.
working meal where business is transacted) and are associated with a sponsored
research PTAEO account that has been designated as a Conference Grant by
the sponsor or meals that are provided to key project participants during an
all day scheduled meeting with an agenda are allowable on Federal Demonstration
Partnership awards with limitations. Department of Health and Human Services
defines a conference as "A symposium, seminar, workshop, or any other organized
and formal meeting lasting 1 or more days where persons assemble to exchange
information and views or explore or clarify a defined subject, problem or area
of knowledge within the areas of Public Health Service program interests,
whether or not a published report results from the meeting." Meals for guests
not attending the conference are unallowable. Allowable expenses for "working"
meals associated with an all day conference should be charged to the
appropriate expenditure type.
- Costs associated with recruitment of personnel generally are allowable, but
you should confirm with the sponsoring agency's guidelines. These allowable
recruitment costs include help wanted advertising costs, travel costs to
pre-employment interviews incurred by applicants, and travel costs of employees
while engaged in recruiting personnel. Guest (other than the applicant and
Principal Investigator) expenses are unallowable.
IMPORTANT NOTE:
Sponsored research funds may be used to cover the costs associated with
travel and entertainment, i.e. transportation, meals, and lodging. However,
there are a number of factors that enter into approval of sponsored research
funds to cover travel and entertainment expenses.
- The funded proposal must have explicitly stated an amount and justification
for the travel. This will translate into a budget category for travel when the
sponsored research PTAEO account is established.
- The expenses incurred related to travel and entertainment must be fully
documented as outlined below and more explicitly stated in the Dartmouth
College Travel Policy.
- The expenses incurred related to travel and entertainment on a federally
sponsored research award must conform to federal regulations.
Individual federal agencies have further and more explicit policies covering
reimbursement of these expenses. Non-federal sponsors will have their own set
of policies on the reimbursement of travel and entertainment expenses. While an
overview of key points is presented here, the Principal Investigator is advised
to study the more extensive documents, such as the full College Travel Policy
and contact staff in the OSP for further clarification of individual sponsor
policies.
Department Accounts & Subcodes: In addition to insuring
the allowability of expenses on sponsored research awards, it is very important
that those persons responsible for departmental accounts insure that expenses
are properly classified into expenditure types. As stated in the introduction,
important audit information is derived from all accounts (both department and
sponsored research). Categories of costs that often require clarification on
proper classification are entertainment or meals expenses that are charged to
department accounts.The following are guidelines to assist in properly
classifying these types of expenses.
- Department meals are considered entertainment unless it is luncheon served
during an all day conference
- Costs associated with after-work-hours receptions or meals at restaurants
where alcohol is served or the purpose is mainly social should be classified as
entertainment
- The subsistence and lodging costs of persons visiting the College for
meetings or dissemination of technical information or the cost of travel to
meetings for College personnel should be classified in the appropriate
expenditure type according the instructions on the reverse side of the
Travel Voucher.
Meals provided to participants of an all day conference: list names of the
attendees and include a statement that specifies the nature of the business
conducted during the meal and why the meal was an integral and necessary part
of the conference and the sponsored research award. This explanation should be
put in the "Additional Comments" section and "see attached" should be written
to reference any additional attached information. Attach a copy of the
conference agenda, if available. Meals associated with recruitment of project
personnel: specify the name of the applicant and the title of the open
position.
Examples of Entertainment and Meals
Situations
The following are examples of common situations that arise in connection
with both federal sponsored research awards and department funds. These
examples are intended as a guideline for determining the classification and
allowability of expenses. We realize that the guidelines are subject to
interpretation on a case-by-case basis. Please call OSP for questions regarding
a specific case.
The institution invites a renowned scientist to deliver a paper. The
Department of Pathology provides coffee and cookies during a break before a
related question and answer session. The cost of the refreshments are not
entertainment and should be allowable on a federal sponsored research award, so
long as they are reasonable: they are associated with a meeting where the
predominant purpose is the delivery of information.
After the meeting, the dean of the Medical School holds a reception for
the scientist where beer, wine and hors d'oeuvres are served. The costs are
probably considered entertainment and disallowed on a federal sponsored
research award.
Instead, the dean takes the scientist and his department chair out for
dinner. Alcohol is served. This is also considered entertainment, and is not
allowable on a federal sponsored research award.
The College put this scientist up at a local inn after the talk. The
costs of subsistence would be allowable on a federal sponsored research award
where the principal purpose of the meeting like this, was dissemination of
technical information.
The President, Provost, and Vice-Presidents hold a retreat off campus to
discuss a 3-year financial plan. There is a continental breakfast, and lunch
served. The participants go to a local restaurant for dinner. Since the primary
purpose of the meeting is a technical discussion, and there is an agenda (the
3-year plan), the costs of travel, housing, breakfast, and lunch would not be
considered entertainment. It would probably be hard to argue that the primary
purpose carried over to dinner, however. In fact, it probably makes sense to
exclude on this basis all meals where alcohol is served, except where on travel
& meals are being reimbursed as part of travel reimbursement
policy.
The Physics Department receives a sponsored research award to hold a
symposium for leading scientists to discuss a new particle. In its sponsored
research application, the Department listed the activities it planned to
conduct, and the sponsored research application specifically provided for a
working dinner the night before. This would be allowable on the sponsored
research award since there was such a specific provision.
From time to time, the Chemistry Department Chairman holds lunches for
the members of her Department at the faculty club to discuss academic and
research issues. Unless the primary purpose of the lunch is dissemination of
technical information, as evidenced by a formal agenda, the government would
probably contend that the primary purpose was the meal, not the discussion
(which could presumably have been held without the expenses); so the cost of
lunch would be considered entertainment and not be allowed on a federal
sponsored research award.
The provost travels to Cleveland to recruit a department chair. The
reasonable cost of travel and subsistence (less alcohol, of course) would not
be considered entertainment. Presumably this would include the costs of lunch
or dinner with the recruit, assuming that it was inappropriate to meet at the
recruit's place of business. Similarly, the reasonable cost of the recruit's
travel to your institution would not be considered entertainment.
The President holds a reception in honor of the Medical School's 100th
anniversary. This is entertainment. Presumably the exclusion would also run to
any glossy publications that were produced on or after the affair.
The College will provide cash advances in limited amounts for faculty and
other employees traveling on authorized business to cover reasonable
miscellaneous costs such as taxi fares, tips, and other expenses which cannot
readily be charged to a corporate card. Cash advances must not be used to cover
personal expenses or any activity that is the sole responsibility of the
traveler. The size of the advance must be a reasonable estimate of the amount
of cash necessary to conduct College business.
Each cash advance is the personal obligation of the traveler until it has
been discharged by processing a properly completed Travel and Entertainment
Expense Voucher. Thus, the traveler is responsible for any lost or stolen cash
advances. Employees are responsible for the proper record keeping of expenses
incurred while traveling and for settling any unused advance owed to the
College. Travel advances must be accounted for on a Travel and
Entertainment Expense Voucher within 10 working days after returning from the
trip.
Advances will generally not be provided earlier than 3 working days before
the planned departure date of the trip. Requests for large amounts of
traveler's checks should be received by the Cashier's Office at least 24 hours
before they are needed. Persons receiving cash or traveler's checks must sign
for them in the presence of a Cashier and are responsible for the funds in the
event of theft or loss.
Travelers requesting advances can obtain only $250 in cash. Traveler's
checks will be issued for any portion of the advance over this $250 cash limit.
The College provides American Express traveler's checks free of charge for use
in the conduct of business travel; the College does not sell traveler's checks
for personal use.
Unsigned traveler's checks are as negotiable as cash and should be signed by
the traveler as soon they are received. Instructions for contacting American
Express for prompt replacement of lost traveler's checks are included with
issued traveler's checks or are available from the Cashier's Office. Only
signed traveler's checks will be replaced, the loss of unsigned traveler's
checks is the personal responsibility of the traveler.
- Sufficient information to establish the business purpose of the travel,
entertainment, or other expenditure;
- An adequate record of each expenditure, which would include the amount,
date, and place;
- Substantiation of expenditures with original receipts -- at a minimum,
receipts must be provided for all lodging and entertainment expenses
(regardless of amount) and for all other expenses of $75 or more to comply with
IRS regulations; however, departments may elect to require receipts for all
expenditures over $25;
- The return of any unused monies from cash advances.
Because travel vouchers are subject to audit by government agencies and
other sponsors, thorough documentation and accounting for expenses is
essential. If the expenses to be reimbursed are related to business travel or
entertainment, the employee should complete a Travel and Entertainment Expense
Voucher. If the reimbursement request is not related to business travel or
entertainment, the employee should complete a Request for Payment.
Required documentation and receipts
Travelers are required to submit original receipts to substantiate their
travel expenses. Original documentation is necessary to verify expenditures and
eliminate the possibility of duplicate payments. When reviewing travel
vouchers, the Controller's Office will expect that, at a minimum, any single
expenditure of $75 or more will be accompanied by an original receipt. In
addition, all entertainment and lodging expenses must be supported by receipts,
regardless of amount. If, in rare cases, original receipts are not available,
an explanation must be submitted with the travel voucher prior to processing.
Travel vouchers that are not properly completed and approved will be
returned unprocessed to the employee with an explanation of the
deficiency.
Bills or cash register tapes that support credit card charges are considered
original receipts and must be submitted with the Travel and Entertainment
Expense Voucher or Request for Payment. Photocopies of credit card charge slips
or billing statements are not sufficient documentation, nor are tear-off stubs
for meals. If no other form of receipt can be obtained, the original credit
card slip will be accepted. In the case of airfare not charged directly to a
departmental account through the College Travel Office, travelers must submit
the passenger copy of their ticket. Travel itineraries do not constitute
receipts for reimbursement purposes.
Completing the Travel & Entertainment Expense Voucher
All requests for reimbursement to individuals for out-of-pocket expenses for
either entertainment or meals, if allowable, should be requested on the Travel
and Entertainment Voucher form. Incomplete forms and vague explanations will
result in delays in processing. The following information should be completed
on the form
Business Purpose of Travel or Entertainment in terms of the criteria listed
in this manual:
- For College or Non-College employee travel to a meeting, please include the
destination and name or purpose of the conference in the "Business Purpose of
Travel" line.
- For meals provided to patients or subjects under study, please attach a
statement that fully explains the necessity of the meals in relation to the
project goals. The amount of the expense should be listed in the "Misc.
expenses" line of the travel voucher.
- For meals provided during all day conferences, please list all of the names
of the attendees and include a statement that specifies the nature of the
business conducted during the meal and why the meal was an integral and
necessary part of the conference and the grant. Please put the explanation in
the "Additional Comments" Section and write "see attached" to reference any
additional attached information. Please attach a copy of the agenda, if
available.
- For meals associated with recruitment, please specify the name of the
applicant and the title of the open position.
Completing the Travel & Entertainment Expense Voucher Continued
*Itemizing Expenses* Expenses should be entered on the applicable
lines of the voucher which best describe the type of expenses incurred. Except
for segregating unallowable items and omitting non-reimbursable expenses,
charges on itemized hotel or other bills such as meals, telephone, parking,
etc. need not be broken out and reported separately, although this is
preferred. Amounts reported under "Miscellaneous Expenses" on the voucher must
be itemized and supported by original receipts where required. Authorized
persons approving vouchers are primarily responsible for enforcing these travel
and expense reimbursement policies and, in so doing, must be satisfied
that the vouchers have been properly completed and that the expenses are
appropriate, reasonable, and sufficiently described and documented.
Expenses that have been directly paid to a vendor by the College (i.e.,
airfare booked through the College Travel Office, conference registration fees,
etc.) should be reported on the face of the travel voucher and carried over to
the column titled, "Total Expenses CHARGED DIRECTLY to the College." These
expenses, of course, are not eligible for reimbursement; however, documenting
them on the travel voucher allows for a comprehensive report of all costs
associated with a particular business trip.
*Signature Authority* Travel and Entertainment Expense Vouchers
must be signed by the traveler and approved by his/her immediate supervisor or
more senior officer in the department who has the authority to permit travel on
College business and approve charges to the particular account(s). No employee
is authorized to approve his or her own, a peer's or a superior's travel
voucher or any travel charged to an account for which he/she is not authorized
to approve expenditures.
*Use of Correct Expenditure Types* Once all travel or entertainment
expenditures have been itemized on the voucher, employees must carefully
account for their reimbursable expenses by allocating appropriate amounts to
the GL departmental and/or PTAEO accounts. Further segregation into
specific expenditure types help distinguish different types of travel and
entertainment expenses.
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