Policy: Expense Policy
Date of Approval:
February 9, 2018
Policy Statement:
It is understood that the business of Clemson University requires expenditures paid on behalf of the Board of Trustees in fulfilling their responsibilities as members and in acting for the benefit of the University. The University recognizes its position as a steward of taxpayer and donor funds and is committed to the appropriate expenditure of those funds and to ensuring that oversight exists so as to avoid waste, excessive spending and payment for expenses that do not contribute to the educational mission of the University.
This Policy is not intended to be all-inclusive nor to address every situation which may arise. Questions about specific situations not addressed in this policy and/or policy clarifications should be communicated with the Controller’s Office.
Purpose:
For purposes of clarity and understanding, this Policy is intended to articulate practical principles that will provide a clear, documented business purpose for each event/expenditure incurred on behalf of the Board of Trustees that benefits the University.
Authorized expenses shall be paid for directly by Clemson University in accordance with State regulations and the provisions detailed in this Policy.
Policy Procedures and Responsibilities:
A. Authorized Expenses
The expenses to which this policy applies are expenses that may be incurred on behalf of a Trustee for:
1. Board Meetings, Commencement and Other University Business Events and Meetings
a. Vehicle mileage — Generally, the University will not reimburse (regardless of the source of funds) for the use of a personal car used to travel to and from a Trustee meeting or to and from an activity that relates or pertains to the University’s business.
b. Lodging expenses — Overnight stays incurred by Trustees attending University business events will be provided to the extent that the overnight stay allows the Trustee to meet Board attendance expectations. The Board Office staff will assist with lodging arrangements. Every effort will be made to obtain the most practical and economical room rate and provide for the University to be directly billed by the hotel or motel.
It is anticipated that overnight lodging will be required only in the following circumstances:
1. When the business of the University extends beyond a normal working day (i.e. after 5:00 pm) and travel back to a Trustee’s residence would be impractical, or
2. When the business meeting begins in the morning and long distance travel early in the day would be impractical.
In addition to attending University business events, the principles applicable to the Trustees attendance at athletic events and the associated lodging expenses can be found in the Addendum to the Athletic Department’s Travel Policy as it relates to non-athletic employees and/or guests.
c. Meals and Entertainment — University entertainment is the arrangement of activities, events, or meals for the promotion and advancement of the University’s mission. While the breadth of the University’s mission may occasionally require entertainment needs, such expenditures must be reasonable and must be managed in a fiscally responsible manner. Appropriate meals will be provided by the University for bona fide business meal and entertainment expenses for events that constitute official functions. The Board of Trustees Office will assist with the required written substantiation.
Examples of acceptable events falling within the “official functions” designation include:
1. Meetings of official institutional (in-house) committees and advisory groups;
2. Meetings of official external committees and advisory groups
3. Presentations before legislative committees or other legislative bodies as a representative of the Board of Trustees.
4. Professional development or training provided by University employees or is facilitated by an external training consultant.
Meals or events that are primarily social in nature (i.e. public relations, development, etc.) and have a University related business purpose may be permitted. Examples of acceptable entertainment expenses include:
1. Alumni events and receptions
2. Faculty, staff, and student awards and appreciation events
3. Receptions for visiting scholars, dignitaries, award-winners, etc.
4. Meals including University guests and other non-employees
5. Donor and donor prospect meals and receptions
6. Commencement-related events
7. Recruitment of prospective faculty, staff, or students
8. Catered events in celebration of University milestone
a. Receptions for the opening of new exhibits at University facilities
Please note that this is not an all-inclusive list. In addition to these expenses, there may be other events on or off campus not specifically covered in this policy whereby the expenses may be paid for by the University. In all such cases, the Board of Trustees Office will be responsible for evaluating the expenses to ensure that they are related to the conduct of official University business and are considered 1) necessary, 2) appropriate to the occasion, 3) reasonable in amount, and 4) serve a bona fide university purpose.
Alcoholic beverages served at official functions must be purchased with donor (not University/State) funds. No University personnel, operating in their capacity as State employees, shall facilitate the purchase and storage of alcoholic beverages on behalf of Trustees.
Because the IRS imposes strict substantiation/documentation requirements on such expenditures, the University must be able to provide the following documentation on such expenses:
1. Total amount of payment
2. Date, time and place of function
3. Business purpose served by the expenditure (i.e. list of attendees and their business relationship to the University). Remember, the business purpose of an expense may be obvious to the University, but not to a third-party reviewer.
2. Spousal/Guest Expenses — Payment for the cost of conference, convention, travel or other official function expenses for a spouse/guest may be taxable unless the official function requires their attendance such as in the instance that a visiting spouse/guest is present. The presence of the spouse/guest must be essential, not just beneficial, to the Trustee being able to carry out his/her business purpose for the University.
When spousal expenses are allowed for official University events to which the Trustee and the Trustee’s spouse/guest are invited or expected in the role of Trustee, the Board Office will assist in the documentation of the business purpose for these expenses. If the spouse’s/guest’s travel does not qualify as business, the Trustee’s expected taxable income or personal reimbursement to the University will be computed as the “increase in cost.” For example, hotel rates for double occupancy usually are not twice the single occupancy rates. To determine the incremental, “additional” cost, the Trustee must obtain the single occupancy rate and subtract that from the double occupancy rates. If, however, as in the case of rental cars, no incremental cost is involved, the spouse in effect travels for free.
Gifts received from the University or related organizations — Gifts, awards, and other non- cash presentations are generally considered taxable income to the Trustee unless considered De Minimis (see sub-section a. below) or a Trustee achievement award.
a. DeMinimis fringe benefits are those that are both low in cost and given on an infrequent basis. For the University’s determination of the taxability of a gift; gifts, awards, and presentations costing $100 or less will generally be considered de minimis. 2. In contrast, flowers, books, fruit baskets, plaques, certificates (not gift certificates), or similar items given for a special purpose such as family death or illness, recognition of special effort, or outstanding performance may be “excepted” from the $100 ceiling, with adequate documentation supporting the exclusion from income, such as board minutes, death notices or other similar correspondence.
Athletic Ticket sand Events — Members of the Board of Trustees, in their development capacity for Clemson University, will have occasion to attend University athletic events or competitions. These events provide the Trustee with the opportunity to engage donors, supporters, state officials and business leaders in the advancement of Clemson University’s teaching, research, creative activity and community engagement mission. When attending such events, the Trustee is considered to be appearing in an official capacity and may be required to play an official role thereto. Such tickets are considered a “business expense” and not a gift or taxable compensation.
In addition, “post-season” participation is considered to be a means to further recognize and promote, through national exposure, the University and its athletic programs. Post- season activities shall be accomplished consistent with state law, conference/NCAA rules and prudent management.
The principles applicable to the provision of tickets for Trustees attendance at athletic events can be found in the University’s Complimentary and Discounted Event Tickets and Passes Policy.
B. Clemson ID Card
Each Trustee is provided with an ID card that allows them and their guest, including dependents, free access to the FIKE Physical Education Center. The value of the Trustee’s personal use of these recreational facilities will be excluded from taxable income because the IRS requirements for “no additional cost service” fringe benefit under IRC Section 132(b) and special rules regarding the use of an “employer provided athletic facility” have been met.
C. License Plates and Arranged Parking
Each Trustee is provided with a “Clemson Board of Trustees” government license plate that they pay for personally. This plate, which possesses a distinguishing design for identification purposes, allows each Trustee to park on campus in lieu of purchasing a parking permit.
D. Supporting Documentation
All supporting documentation will be retained in accordance with the University’s Record Retention policy.
