RIT departments and employees incur a variety of business related expenditures that contribute to, and support the mission of, the University. All business related expenditures are expected to comply with the following guidelines. They must be:
- Reasonable and necessary;
- Authorized by appropriate individuals with budget authority;
- Consistent with RIT’s mission; and,
- When applicable, in compliance with restrictions and other conditions specified by external funding sources.
The policies in this document are intended to provide specific guidelines for use in identifying the circumstances for, as well as the appropriateness of, incurring costs for selected discretionary expenditures including:
Note: the absence of a specific policy does not mean the expenditure is allowable. Contact the Controller’s Office for guidance before incurring a discretionary expense not specified here.
Several of the selected business related expenditures provide upper limit spending guidelines. Actual approval and reimbursement of authorized/allowable expenditures is at the discretion of the department head or responsible dean/vice president based on the availability of funding. Department heads or deans/vice presidents may impose more restrictive guidelines within their division than those outlined here.
All University funds including operating accounts, gifts, endowment earnings, discretionary funds and grants/contracts, are expected to be expended in a reasonable and prudent manner and only for business related activities that support RIT’s mission. Under no circumstance may University funds be expended for goods and services that do not have a clear business purpose and/or are personal in nature. In addition,
- Expenditures must be in compliance with University policies and procedures.
- Funds must be available to support the expenditure (i.e., deficit spending is not permitted).
- When paid from restricted funds (e.g., gifts and endowment earnings), the expenditure must comply with the restricted purpose stipulated by the donor.
- When paid from sponsor funds (e.g., grants and contracts), the expenditure must be allowable and comply with the sponsor’s guidelines.
- Requests for reimbursement must be accompanied by appropriate documentation (i.e., original receipts with an explanation of the business purpose including who, what, where, when and why). Refer to the "Employee Reimbursements under an Accountable Plan" document on the Controller’s web page for more information.
- Requests for payment and/or reimbursement are subject to review and approval by one level of management above the requestor. The approver of discretionary expenditures is expected to be prudent and exercise sound judgment. He/she must be satisfied that the expense is reasonable, allowable, and conforms to the policies contained in this document.
Allowability of Selected Discretionary Expenditures
- Expenditures for alcohol are unallowable except under the following circumstances:
- In situations where business related activities occur which are related to the mission of the University and involve individuals external to the RIT community, expenditures for alcoholic beverages are generally allowable.
- Alcoholic beverages may be allowable at University sponsored events when approved by the division vice president. When an event is held on campus, a qualified vendor must be engaged (i.e., either the RIT Brick City Catering Sales Department or a third-party caterer) who is licensed by Monroe County. The vendor must provide a certificate of general liability insurance as well as a valid NYS liquor license and appropriate liquor liability coverage for the purpose of providing and serving these beverages). See the Institute Policies and Procedures Manual Policy C15.2 for the University’s alcohol policy and Policy C20.0 for the University’s vending policy.
- Regardless of the funding source or business purpose, when allowable, expenditures for alcoholic beverages must be charged to object code 79050 (government unallowable charges) or 90290 (government unallowable chargeback).
- Unallowable Expenses – While expenditures for meals are allowable when traveling out of town on University business; reimbursement for alcoholic beverages consumed as part of the meal or otherwise is not allowable.
- Under no circumstances may alcoholic beverages be charged to federally funded grants or contracts, either directly or indirectly.
Entertainment expenses are generally unallowable except as noted below.
- Community Functions – It is important and appropriate for RIT to be represented at various community functions and events that are sponsored by other organizations with which the University may have a relationship or have other reasons to participate and support such events. Purchase of tables at community functions must be approved by the appropriate dean or vice president and be coordinated through the Office of Community and Government Relations. Direct all requests for sponsorship funding from RIT and/or invitations to purchase tickets and/or tables for such events to Government and Community Relations. This process enables the University to ensure that RIT is appropriately represented and avoids unnecessary duplication.
- Official Guests of the University – Those business entertainment expenditures that are allowable involve official guests of the University including prospective donors, employees, and students; dignitaries; distinguished alumni; and, other individuals involved in contributing to and furthering the mission of the University. When planning entertainment for guests of the University, costs should be reasonable in relation to the nature of the event. Departments are encouraged to arrange on-campus events through the RIT Brick City Catering Sales Department.
- Recruitment – Entertainment expenses for recruitment of prospective students, faculty and staff and official guests of the University such as donors and potential donors, visiting lecturers and scientists, visitors from foreign countries, representatives of research organizations, visitors from other universities, individuals interested in RIT programs and initiatives, and guests invited to assist in the development of new programs or to evaluate existing programs, alumni, business and community leaders, will be reimbursed if approved as reasonable and necessary by an authorized individual. Departments may elect to set internal limits for such expenditures. The responsible dean or vice president must approve expenditures that are more than $50 per person.
- Unallowable Expenses – Business entertainment expenditures are not allowable except under the specific circumstance provided above.
Business meals are allowable under the following circumstances:
- Business meals are those taken with business associates and professional colleagues outside of the University, job applicants, prospective students or donors/prospective donors, and/or guests of the University, during which University business-related discussions take place. When authorized by the department head, business meals may also be reimbursable when the purpose is employee reward and recognition. Refer to Section E below for more information.
- Meals at On-Campus Dining Establishments – Reasonable expenditures for business meals between two or more University employees scheduled during the lunch or dinner hour (i.e., when no other time is available to meet) where University business is discussed.
- Meals while Traveling – Faculty, staff and students may be reimbursed for approved, necessary and reasonable expenditures for meals while traveling on RIT business. Reimbursement for alcoholic beverages consumed as part of the meal or otherwise is not allowable. The employee is responsible for obtaining and submitting original receipts for reimbursement. Refer to the RIT Travel Policies and Procedures manual on the Controller’s web page for information regarding per day reimbursement limits.
- Unallowable Expenses –
- Off-campus meals with two or more University employees, which could have been conducted during regular business hours, are not allowable.
- Meals considered to be personal in nature are not allowable. These include, but are not limited to, parties or meals for employee birthdays, weddings, births, showers, boss' day or parties and events not sponsored by the University.
- Cell phones expenses paid by the University are generally unallowable unless required by the department for the employee to complete his/her job responsibilities. In such cases, approval by the respective division vice president is required.
- If it is advantageous to the University for a department to purchase equipment and contracts for its employees (i.e., for shared minutes, etc.), it is allowable for the monthly bill to be paid directly by the University.
- When a cell phone is required in order for an employee to complete his/her job responsibilities, the employee should contract directly with the service provider and the submit his/her monthly bill for reimbursement.
- When a cell phone is required for occasional business use, reimbursement to an employee for business calls made in excess of the monthly minutes available on his/her cell contract is allowable.
- Unallowable Expenses –
- Add-on items above the base contract cost, including downloads of movies and games are unallowable.
Expenditures to reward and recognize employees for achievements including length of service are allowable provided they are reasonable and given infrequently.
- Note: gifts given to employees, including raffle prizes, may be taxable and will be added to the employee’s W-2 wages.
- Occasional small-dollar gifts (given no more than once per year to a single recipient valued at $50 or less) of cash, gift certificates, and gift cards, and tangible personal property (including clothing with an RIT-logo) intended to reward and recognize employees are allowable. Cash and cash equivalents awarded to employees are taxable to the recipient, regardless of the dollar amount. Refer to the RIT Gifts Given Form on the Controller’s web site for more information.
- Length of Service – Employee length of service awards are provided through RIT's official recognition programs administered by the Human Resources Department. Refer to the Human Resources web site for more information: http://www.rit.edu/fa/humanresources/policies/procedures/lengthofservice.html.
- Retirements – Gifts made to employees upon retirement from the University are allowable. A general guideline is $10.00 for each year of service, up to a maximum of $400. Such gifts are not taxable provided they are tangible personal property. Gifts of cash and cash equivalent are taxable to the recipient regardless of the dollar amount.
- Unallowable Expenses –
- Gifts to employees, in lieu of compensation, are unallowable.
University departments may incur an expense, in the form of a gift, on behalf of an employee or an employee's immediate family, under the following circumstances:
- Death of an Employee or an Employee's Immediate Family Member – (as defined by Human Resources). Memorial gifts such as flowers or a donation to a charitable organization are allowable up to $100.00*. RIT should be acknowledged as the sender (i.e., "from your friends and colleagues at RIT department XXXX").
- Donors, Potential Donors, or Friends of the University – Gifts of this nature are allowable with proper review and approval by the divisional Development/Alumni Relations representative.
- Gifts to Government Officials – Under current Federal and State laws, there are strict limitations with respect to gifts of any kind to Government Officials, whether they are elected or appointed, including staff of any legislative office or agency. Members of the RIT community are directed to consult with the Office of Government & Community Relations on any matters related to recognition gifts of any kind to government officials.
- Extended Illness of an Employee or Student – Gifts of flowers, fruit baskets, etc. are allowable up to $50.00*.
- Length of Service – See Section E.2. above.
- Retirements – See Section E. 3. above.
- Unallowable Expenses –
- Gifts to employees, in lieu of compensation, are unallowable. In addition, holiday gifts and/or gifts to honor an individual for personal reasons are not allowable/reimbursable from any University funding source; employees must bear the costs of such gifts. Gifts considered to be personal in nature include, but are not limited to, those related to birthdays, weddings, births/adoptions, showers, administrative professional’s day or boss’s day.
(*The maximum allowable expenditure amount includes the cost of the gift and all applicable charges, including but not limited to, delivery, shipping and handling, etc.)
Refreshments provided at University or departmental business activities such as staff meetings, committee meetings, business presentations, or in honor of University guests are allowable. Such expenses should be reasonable and be incurred periodically.
- Annual Holiday Parties and Summer Picnics – Expenses associated with holiday parties and summer picnics are allowable provided they are reasonable in scope and include all employees within the department. While such events play an important role in the University community, it is also important to be fiscally responsible with regard to the use of University funds. The upper spending limit for such events is $40 per person per fiscal year. Activities must be authorized by the responsible dean or vice president. While exceptions to the upper limit are discouraged, they may be approved by the appropriate division vice president when complete and proper justification is provided.
- Employee Events –Expenses associated with employee business events, (e.g. receptions, open houses, retreats, awards ceremonies, etc.) that complement the University’s and/or department's mission and goals and foster a sense of community among faculty, staff and students are allowable. Expenses of this nature typically include light refreshments, facility rental costs and catering services. Alcoholic beverages may be allowable when the event is sponsored by the University and when approved by the division vice president (see Section A.1.b.). Alcoholic beverages are generally not an allowable expense when the activity is not sponsored by the University; however they may be provided through personal provisions.
- Retirements – Expenses associated with hosting an on-campus reception to honor employees who retire or leave RIT are allowable but limited to light refreshments. Alcoholic beverages are not an allowable expense but may be provided through personal provisions.
- Government Officials – Current Federal and State laws include restrictions on hosting elected and appointment government officials for meals. In general,all RIT employees are prohibited from providing meals for government officials even if the meal is provided while conducting university business. There are limited exceptions, such as participation in "widely attended events" such as a general university reception or if the food provided is limited to appetizers or "finger food". To ensure compliance with Federal and State laws, members of the RIT community are directed to contact the Office of Government & Community Relations before inviting any government official to an RIT sponsored event that involves hospitality services.
- Unallowable Expenses – In addition to Section G.4 above, expenditures associated with birthdays, weddings, anniversaries, holidays, and employee promotions are not allowable. Participants are expected to bear costs associated with such events.
- Expenditures related to community or social events (e.g., concert tickets, sporting events, golf tournaments, cultural events, etc.,) are not allowable unless a connection to the University’s mission can be clearly demonstrated and are approved by the responsible dean or vice president.
Home internet service processed under any payment method by the University is unallowable.
- Employees who require home internet service to conduct University business based on the nature of their specific job responsibilities may be entitled to receive a taxable allowance of $40.00 per month intended to offset a portion of the cost of such service.
- Payment of an allowance to an employee is at the discretion of the respective division vice president
- Allowances are established on a fiscal year basis (i.e., from July 1st – June 30th). In order for an allowance to continue, a new Allowance Request Form must be submitted to the Payroll Office annually, prior to the start of the fiscal year.
- Allowances are processed through the regular payroll process with taxes withheld at the time the payment is made. Note: the allowance is not an increase to the employee’s base pay and is not included in the calculation of percentage increases to base pay due to merit increases, job upgrade, etc.
- Unallowable Expenses –
- The direct payment for monthly home internet service by RIT is not allowable.
Memberships, dues, and professional certification or licensing fees may be paid by RIT only if there is a direct benefit to the University including:
- Dues, professional licenses, and certification or testing fees that are related to an employee's job duties and memberships that name the University (or department) as the member.
- Individual (employee) memberships with work related benefits including memberships in professional organizations related to an individual's job specialty, whether the individual is in the academic or non-academic area. The University must derive specific benefits such as access to useful information not otherwise available.
- Membership in community, civic, service or private organizations for the president or other senior administrators as approved by the president if their duties include significant responsibilities to represent the University in the community.
- University (or department) memberships in an organization with specified named members as authorized representatives. The job duties of named members must be related to the purpose of the membership.
- Unallowable Expenses –
- Memberships in community, civic, service or private organizations (except as noted above), fraternal organizations, political organizations and non job-related professional societies are unallowable.
- Refer to section to Section F.1. above.
- The University is classified by the IRS as a tax-exempt, charitable organization. As such, donations made by the University to other charitable organizations (with the exception of memorial gifts as stated in section F.1. above) should be made under extraordinary circumstances only.
- Payments to such organizations must include documentation explaining the nature of the donation, and the relationship to RIT. All payment requests of this nature must be approved by appropriate dean or vice president.
- Purchase of temporary reserved parking permits for visitors through the University's Parking Office is allowable. However, payment or reimbursement of parking tickets, even when incurred during the course of University business, is unallowable except for donors or friends of the University (only if the sponsoring department is willing to pay for the ticket).
- Unallowable Expenses –
- Use of University funds to pay for reserved parking passes for RIT employees is not an allowable business expense.
- Expenditures for prizes and awards may be allowable provided they are for employee reward and recognition or retirement. Refer to Section E above for information.
- Expenditures for prizes and awards given to students to enhance student life are also allowable provided that they are reasonable and given only occasionally. Refer to the RIT Gifts Given Form available on the Controller’s Office web site for more information.
- Unallowable Expenses –
- Prizes and awards in lieu of compensation are unallowable.
- Subscriptions for journals, magazines, newspapers for department use are generally allowable provided that a clear business connection is established.
- Unallowable Expenses –
- Expenses for subscriptions that benefit individual faculty and staff are unallowable.
- Travel for fund raising, professional development, recruitment, and scholarship is allowable. Refer to the RIT Travel Policies and Procedures Manual available on the Controller’s Office web page for specific policies related to travel including reimbursement rates for meals taken while traveling.
Exceptions to the Discretionary Spending Policy
- Exceptions to any of the policies in this document require written documentation and approval in advance of incurring the expense.
- A memorandum or related document justifying the request for exception must be approved by the dean or vice president for the college/department making the request, and submitted to the Controller’s Office prior to processing a reimbursement or payment. Approval for exceptions at the dean level must be granted by the provost; exceptions at the vice president’s level must be approved the president.
- When approved, all documentation will be maintained by the Controller's Office for audit purposes.