Expenditures: Hospitality

Scope

All hospitality expenditures incurred in the conduct of Indiana University business.

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Policy Statement

During the course of university business, it may be necessary to incur hospitality expenditures for the purpose of promoting and furthering the mission of the university. As a public institution, Indiana University is entrusted with the funds of various constituents. In order to carry out its fiduciary duty, university employees must demonstrate prudent judgment when expending funds. The Fiscal Officer is responsible for ensuring the propriety and reasonableness of all hospitality expenditures. Additionally, all funds must always be used for institutional benefit, never for the purpose of personal benefit or privilege of an individual. Therefore, all hospitality expenditures must meet the criteria of the business connection requirement to be considered business expenses under the university’s Accountable Plan policy (FIN-ACC-620).

Examples of appropriate hospitality expenditures include those related to following activities and purposes:

• Meals or refreshments served during business meetings

• Meals for university visitors, guests, donors, prospective employees, or students

• Common area hospitality for visitors (complimentary coffee, beverages, snacks, etc.)

• Receptions, functions and events held for official university business

• Hospitality incurred for employee appreciation events

Special Considerations

A. All hospitality received from or given to university suppliers of goods and services should be conducted in accordance with the Conflicts of Interest and Commitment policy (UA-17). 

B. The following hospitality expenditures are unallowable or restricted:

• Meals and refreshments for employees where no bona fide business purpose is present

• Meals and refreshments for the entertainment of local, state or federal government officials

• Hospitality purchases made with restricted funds, including contract and grant accounts, loan funds, scholarship accounts or restricted gift accounts, unless explicitly approved in writing by the granting agency via the agreement or guidelines or donor intent. 

• Hospitality purchases made with service center accounts (sub-fund AUXSER).

C. Service of alcohol is governed under  FIN-INS-10.

D. Hospitality expenses do not include items considered gifts or prizes. Rules for gifts to individuals are governed under FIN-ACC-590. Rules for incentives, contests and prizes are governed under FIN-ACC-640.  

E. Exceptions to this policy may be made by a department’s respective Vice President, Provost, Chancellor, or designee. Approval for such exceptions must be obtained in writing in advance of the event.

Expenses Subject to Mandatory Reporting Under HLOGA

1. The terms of this policy shall not apply to expenses that are: (1) subject to mandatory reporting under the Honest Leadership and Open Government Act of 2007 (“HLOGA”) or (2) official business of the Director of Federal Relations. HLOGA covered expenses must be approved ahead of time by the IU Office of Federal Relations. Failure to do so may result in nonpayment of such expenses.
2. All reportable expenses under HLOGA must be paid directly to a vendor or to a university employee for reimbursement. The following items are NOT allowable expenses:
   • Reimbursements paid directly to any covered federal official
   • Stipends paid to any covered federal official; and
   • Honorariums paid to any covered federal official
3. HLOGA covered expenses must be approved ahead of time by the IU Office of Federal Relations. The IU Federal Government Official Reporting form should be used to report all expenses pertaining to the visit of a federal government official. These officials may include certain individuals associated with the executive and legislative branches of federal government, as well as military officials. Please contact the IU Office of Federal Relations to determine whether expenses for a particular individual will be reportable under HLOGA. Failure to seek approval from the Office of Federal Relations may result in the inability to offer items of value (meal, lodging, souvenir, etc.) to a visiting covered federal official.

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Reason for Policy

To establish and communicate the rules governing the allowability of hospitality expenditures, including reimbursement to faculty and staff and direct expenditure against university accounts.

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Procedures

The Fiscal Officer will be responsible for ensuring the propriety and reasonableness of all hospitality expenditures for accordance with this policy.

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Definitions

Hospitality Expenditures: Expenditures incurred to purchase or provide meals, and refreshments, as well as related services and supplies (e.g. catering services, flowers, table décor, paper goods, etc.).

Business Expense: An expense incurred in achieving the university's mission or directly related to the conduct of official university business and must be:

• • appropriate to the activity
  • reasonable in amount
  • serve a bona fide university purpose

An expense that serves primarily to furnish the individual with a social or personal benefit is not a business expense.

HLOGA: Congress passed the Honest Leadership and Open Government Act (HLOGA) in September 2007. The goal of this law is to shed more light on the role of lobbyists in influencing federal legislation. For additional information see https://gov.iu.edu/policies/lobbying/index.html.

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Additional Contacts

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History

This policy was revised in 2017 and the name changed from Allowable Hospitality Expenses.

On February 11, 2020, this policy was updated and added list numbering.

On February 23, 2023, a non-substantive update was made to remove the reference to a SOP that was no longer in effect.

The source to this policy is:

Board of Trustees Minutes February 24, 1968, and October 27, 1972

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