Unrestricted Accounting-Main abides by the following guidelines to determine whether meal and/or entertainment expenses for UNM employees may or may not be allowable per policy. Please keep in mind that these are just general guidelines, and each individual case is considered separately based on the particular facts of the situation. In addition, the policy and these guidelines apply to any and all payments methods, to include P-card, Purchase Order, personal reimbursement, and direct charges from internal UNM entities (i.e., the SUB).
The University Business Policies and Procedures Manual, policy #4000 “Allowable and Unallowable Expenditures”, addresses meals/entertainment as follows:
Section 4.8 states: "The purchase of office refreshments (including coffee makers, food and beverages) is prohibited, except when the refreshments are to be consumed primarily by guests of the University or at business meetings."
Unrestricted Accounting-Main considers "business meeting" to be self-explanatory. If the event in question cannot be considered to be a business meeting, food and/or drink paid for by the University will not be allowed. In addition, the mere fact that an event may in fact be a business meeting does not automatically mean that food expenses are allowed. An agenda and minutes for the event may be requested to determine if the event meets the “business meeting” requirement. The general guideline that central accounting offices have used in interpreting this policy has been that if the meeting is incidental to the food, the food is unallowable; if the food is incidental to the meeting, the food may be allowable. This means that for a one-hour meeting, food/refreshment expenses would generally be unallowable; for a four-hour meeting, refreshments would generally be allowable; for an eight-hour meeting, lunch and refreshments would generally be allowable. Meeting length is not the only determining factor. If the meeting were held at a restaurant, the meal would generally be unallowable; if the meeting were held in a conference room, a catered lunch may be allowable. Other factors to be considered are the number of attendees, who the attendees are, what is to be served, and the cost. Also, “time of day” of the meeting has no impact on whether food expenses are allowed. For instance, food expense for a 1-2 hour meeting that is held around noon, whether by convenience or necessity, is not allowable just because of the timing of the meeting; food expense for a meeting of this duration is generally not allowed at all.
Section 4.13 states: "Entertainment of University employees (for example, meal expenses), other than pursuant to the University's travel policy, is prohibited. Exemptions are allowed when the function is a hospitality event that includes both University employees and invited guests of the University."; and: “In accordance with Internal Revenue Service (IRS) regulations, all requests for reimbursement of hospitality expenditures or requests for payment of invoices must be accompanied by a list of the individuals attending the function. For functions attended by more than twenty (20) people or open to the public, a description of the function and definition of the guests invited is sufficient.”
Unrestricted Accounting-Main’s guidelines for whether an event can be considered a "hospitality event" pursuant to this policy include: if the event includes people from the community, whom the University wants to thank for past service to UNM, or from whom the University hopes to receive some service in the future, food expenses, including for UNM employees, would generally be allowable. For example a retirement party for a staff accountant, with only department members included, would generally be unallowable; a retirement party for a college dean, which included alumni that might gift an endowment, would generally be allowable. The requirement for “a list of individuals attending the function” (when 20 or less) is considered to mean more than providing merely names. As with the requirement for more than 20, a “definition” of each guest should be provided. This information should include the individual’s title and affiliation, and if they are a UNM employee.
Section 4.15 states in part: “The purchase of alcoholic beverages is prohibited except when incurred in the performance of University business such as a hospitality event for guests of the University…Payment or reimbursement for the purchase of alcoholic beverages shall not be made from Instruction & General appropriated funds or Contract and Grant funds…”
Due to the restrictions on the payment or reimbursement for alcoholic beverages, Unrestricted Accounting-Main requires itemized receipts for all meals being claimed as “business meetings” at a restaurant, in order to be able to determine if alcohol was served. This itemized receipt also helps in determining if the number of meals being claimed corresponds to the list of attendees. The “customer copy” of a credit card receipt is not sufficient documentation.
Unrestricted Accounting-Main highly recommends that advance approval be obtained for any event in which food expenses for employees is being considered, in order to avoid any unanticipated decisions. In all cases, a detailed, valid UNM business purpose, explaining how the expenses in question benefit UNM, must be provided.