Expenditures: Gifts to Employees, Non-Employees, and Students
FIN-ACC-590
Note: The proposed revisions to FIN-ACC-590 Expenditures: Gifts to Employees, Non-Employees, and Students that are under review are highlighted below. The version of FIN-ACC-590 that is currently in effect can be found here.
About This Policy
- Effective Date:
- 02-01-2010
- Date of Last Review/Update:
- 02-01-2010
- Responsible University Office:
- Office of the University Controller
- Responsible University Administrator:
- Vice President and Chief Financial Officer
- Policy Contact:
Anna Jensen
Associate Vice President and University Controller
Office of the University Controller
anjensen@iu.edu
- Policy Feedback:
- If you have comments or questions about this policy, let us know with the policy feedback form.
Policy Statement
University funds are not allowed to be used for the purchase of gifts of any kind to any individual, including employees and those contributing to the academic mission.
Indiana University Foundation (IUF) funds may be used to purchase the following:
Gifts to employees, non-employees and students are not permissible with IU or IU Foundation (IUF) funds with the exception of the following purposes:
A. Retirement gifts to employees, not to exceed $400
B. Gifts to non-employees that contribute to IU’sIndiana University's academic mission (e.g. donors, guest speakers or visitors contributing to the university mission),. Donors qualify as individuals contributing to IU’s academic mission. not to exceed $500
C. De minimis gifts to employees, non-employees and students of tangible goods, distributed for business or promotional purposes (e.g. t-shirts, mugs, stationery, etc.).
E. Occasional, individual tickets to non-IU events or an IU event where there is no additional cost to the university. Tickets must be within the de minimis standard threshold.
F. Flowers or similar purchases for employee bereavement of family members as defined in (HR-05-110). These purchases are subject to the university de minimis standard.
G. This policy does not govern the following activities:
• Official university activities that include team building, employee engagement, experiential learning, and other activities with a business connection as defined in the Accountable Plan Policy (FIN-ACC-620)
• Years of service awards, as permissible by IU Human Resource (IUHR) or University Academic Affairs. Please see (HR-02-120) for more details on service credit and awards.
• Gifts received by employees from outside parties. Gifts received by external parties are addressed in the Conflicts of Interest and Commitment Policy (UA-17)
• Incentives, prizes or awards received as part of a contest or drawing. See IU Policy Expenditures: Incentives, Contests, Drawings, Games, and Prizes Policy (FIN-ACC-640)
• Payments to research participants. See IU policy Research with Human Subjects: (RP-11-004)
The reimbursement for or direct purchase of a gift from IUF is not to exceed $400 for retirement gifts to employees or $600 for gifts to non-employees. Exception requests related to the dollar amount can be submitted in writing to the Vice President and Chief Financial Officer (VPCFO). Exception requests for the amount cannot exceed $1,000. Any other exceptions to the policy are not allowed.
Allowable gifts must be tangible personal property and cannot be items such as travel certificates, gift cards, cash, or cash equivalents.
Recognition of years of service dates per University Human Resource Services (UHRS) or University Academic Affairs policies are allowed under this policy for the respectiveemployee groups.
Special Considerations
A. Gift Cards or Cash Equivalents: Any gift to an employee, non-employee or student must be in the form of tangible personal property and cannot include items such as gift cards, travel certificates, Crimson Card contributions, meal points, cash, or cash equivalents.
• A gift card or cash equivalent of any dollar amount that is issued in exception to this policy is taxable to the individual recipient and must be reported to the Office of the University Controller (UCO).
• If the recipient is a student, any gift card or cash equivalent, regardless of dollar values is required to be reported to University Financial Aid (see procedures section below).
B. Incentives and Prizes for Students: All contests involving students must follow Payments to Student Guidelines
C. Gifts as Compensation: Gifts cannot be made to employees in lieu of compensation. All employment related compensation must be paid through university payroll.
D. Use of Restricted Funds: Payments under this policy cannot be 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.
E. Use of Auxiliary Service Center Funds: Gifts cannot be made with funds from service center accounts (sub-fund AUXSER).
F. Taxes related to gifts: All gifts to employees and non-employees outside of the explicit exceptions noted above are taxable and reportable to the IRS and must be reported to UCO (see procedures section below).
G. Exceptions to Policy: 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 and reported to UCO for tax reporting purposes (see procedures section below).
Expenses Subject to Mandatory Reporting Under HLOGA
A. 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.
B. 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
C. 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.
Reason for Policy
Indiana University is a public institution. Expenditures should be reasonable in dollar amount, related to the primary mission of the institution, and appropriate with institutional resources.
As a public institution, Indiana University is entrusted with funds by various constituencies. In order to carry out its fiduciary duty, university employees must demonstrate prudent judgement when expending funds.
Procedures
Requests for exceptions to the dollar amount must be submitted in writing to the Senior Vice President and Chief Financial Officer 30 days previous to the proposed purchase of the gift. The SVPCFO will respond in writing to the request. If permission is received for a higher amount the original written request and approval must be shared with IUF before purchase of the gift can occur.
Retirement gifts given to recognize employee length of service, with a value of up to $400, are excludable from taxable income. Gifts with a value over $400 are taxable to the employee and the value above $400 will be added onto the employee’s W-2. Gifts to non-employees contributing to the academic mission of IU exceeding $600 could result in the recipient receiving a 1099-MISC from the University. Procedures for receiving this information for tax reporting will be maintained by IUF and FMS and are posted on the FMS Tax website at http://www.fms.indiana.edu/tax/
Providing a gift to a non-employee who has contributed to the academic mission of the University who is a non resident alien could provide additional challenges. Please contact the tax department in FMS for guidance before giving the gift.
Purchases of the gift must occur using IUF processes. It is not appropriate to use any IU procurement process, including the p-card, to purchase gift items.
Campuses are required to work with UHRS or University Academic Affairs to verify that campus programs for recognition of years of service meets University policy.
Procedures for tax reporting will be maintained by IUF and UCO and are posted on the Office of the University Controller website at IU Accounting Standards. For questions please contact UCO using the UCO Contact Form.
Fo questions regarding Financial Aid reporting obligations, units should consult the university’s Payments to Student Guidelines.
Definitions
De minimis: A benefit for which, considering its value and the frequency with which it is provided, is so small as to make accounting for it unreasonable or impractical. The university’s current de minimis threshold applies to tangible goods under $100, which are distributed to any given individual on an infrequent basis. This threshold is applicable in aggregate for all sources of funds (e.g. IU and IUF funds would be combined towards this limit) paid in a single calendar year.
Gift:A gift is a tangible item Any tangible or cash equivalent item that is being provided to an individual where there is no expectation that something will be provided in return. of a return benefit, including services.This policy does not apply to promotional items used to promote a program or activity. Restrictions on promotional items are covered in financial policy I-50.
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.
No Additional Cost: A complimentary ticket will fall within the no additional cost exclusion when a) the university does not incur any additional costs to provide the ticket, b) no revenue was lost in the course of providing the ticket and c) the ticket would not have otherwise been sold to the public (i.e., the event would not be otherwise sold out). Individual tickets given are required to be under the de minimis threshold. Additionally, only single event/game tickets may be given. Season tickets are not permissible under the no additional cost exclusion.
Retirement: For purposes of this policy retirement only applies if the individual meets the UHRSIUHR standards for retirement status.
Tangible Personal Property: It refers to any type of physical property that can generally be moved (i.e., it is not attached to real property or land), touched or felt. These generally include items such as furniture, clothing, jewelry, art, writings, or household goods. This does not include cash or cash equivalents including gift cards.
Sanctions
Gifts that are purchased outside of the IUF purchase process that require an exception due to the amount and did not receive prior approval by the SVPCFO will not be reimbursed by IUF. The unit must find other avenues to cover the cost of the gift.
Additional Contacts
Subject | Contact | Phone | |
Policy- UCO | Zach Whitesel | 812-855-2203 | zwhitese@iu.edu  |
Policy- UCO | Anna Jensen | 812-856-2548 | anjensen@iu.edu  |
Policy- UCO | Margot Burke | 812-855-0142 | meckerle@iu.edu |
Financial Aid | Sarah Soper | 812-855-1053 | saeaton@iu.edu |
History
Indiana University has a long history of not allowing gifts. Policy I-50, Allowable Hospitality Expenses, indicates that "Gifts of any kind, to any individual, whether or not they are University personnel" are not allowable. This policy on gifts is confirmation of the institution's position and in addition provides guidance on the types and cost of gifts that can be purchased using IUF funds.
Please note: This policy is currently under review.