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Hospitality - Managerial Policy
Responsible officer: Vice-Chancellor and President
Designated officer: Pro Vice-Chancellor (Corporate Services) and Chief Financial Officer
Approving authority: Council C06/61, 13 June 2006
Related document: FBT Procedure
1. Overview
1.1 The University recognises that the provision of hospitality can result in significant benefits to the institution, particularly in promoting the University as a whole and the activities of the various faculties, schools, institutes and other units.
1.2 The University as a Queensland Statutory Body is required to comply with the Financial Administration and Audit Act and the Financial Management Standards, both of which specify guidelines for the provision of hospitality and entertainment. The University is required to ensure that appropriate guidelines are specified, that public sector standards of accountability are maintained and that there is a measure of consistency in the way in which this policy is implemented across the University.
1.3 The justification for the incurring of expenditure is underpinned by four principles:
- the expense must be for official purposes
- the expense must be properly documented
- the expense must be available for audit scrutiny
- the expense must be reasonable for the circumstances
1.4 The primary responsibility for determining the extent to which University resources are applied for this purpose rests with the:
- Vice-Chancellor and President
- Deputy Vice-Chancellor
- Pro Vice-Chancellor (Corporate Services) and Chief Financial Officer
2. Definitions
2.1 In this policy statement, hospitality means:
- the provision of meals or refreshments to persons who are visiting the University for business reasons
- the organisation of other functions which further the objectives of the University, or
- the entertainment of individuals at special events conducted at University or other locations.
2.2 The expectation is that in the majority of cases this will occur at venues on the University of the Sunshine Coast campus although the provision of hospitality off campus or at a staff member's home is not precluded.
2.3 Hospitality should not be a substitute for business meetings, which would ordinarily be conducted in the workplace.
2.4 Attention is drawn to situations described as 'Grey Areas' outlined in Section 6 below.
3. Approval
3.1 The Vice-Chancellor and President, Deputy Vice-Chancellor, Pro Vice-Chancellor, may approve the expenditure of University funds on hospitality and entertainment to be provided at functions and events that will be attended by individuals that are of particular importance to the wider University or the Faculty. Whilst no monetary limit is set on approvals under this section, the approving officer should be comfortable in disclosing the cost of the hospitality given, should that be required, and be able to identify the benefit to the University and / or Faculty.
3.2 The Cost Centre Managers may approve expenditure on hospitality to a maximum of $2,000 for any one function. Again, the approving officer should be comfortable in disclosing the cost of the hospitality given, should that be required, and be able to identify the benefit to the University, the School or the particular unit.
Where the cost of the hospitality is expected to exceed $2,000 for a particular function or the function is of the type mentioned in section 6 below, prior advice/approval should be sought from one of the officers nominated in Section 3.1 above.
3.3 Separate guidelines have been established to cover the provision of hospitality and entertainment at corporate 'boxes' and other similar venues. These guidelines are set out in the Appendix A to this policy.
3.4 The costs of hospitality can be charged to research accounts only if the conditions of the grant allow such expenditure. If the conditions of a research grant allow expenditure on hospitality, all other guidelines outlined in this policy will apply. Approval will be subject to Section 3.1 above.
3.5 The addition of tips or gratuities to the account in a hospitality situation is not encouraged and should only be done in exceptional circumstances. However, it is recognised that tipping is the normal custom in some areas of the world and, in those situations, an appropriate tip or gratuity may be given.
3.6 Participants at functions covered by this policy should normally be restricted to University staff and individuals who it is believed will contribute to the University's objectives. On occasions, attendance at such functions by a staff member's spouse or partner (associates) may be appropriate. Prior approval for attendance by associates should be obtained from one of the officers nominated in Section 3.1 above.
3.7 Specific exclusions from expenditure on official hospitality are:
- working meals (light meals/lunches on a working day - two course with no alcohol) and morning teas
- eligible seminar of more than 4 hours (excluding meal breaks)
- exempt training seminar (not business discussions over a meal)
- meals consumed on work related travel, and
- minor incidental expenditure for items such as tea, coffee, biscuits for servicing meeting rooms
Refreshments under these circumstances should be regarded as incidental to the activity being performed and charged to the appropriate expenditure code, not Hospitality / Entertainment, where the costs cannot be charged to a specific activity.
For all hospitality expenditure, sufficient detail about the event (eg number of internal and external attendees, names of employees who attended) must be advised to Financial Services on the relevant form to enable the correct determination of FBT liability for the cost centre.
4. Receiving hospitality
4.1 When accepting hospitality, care should be taken to avoid any possible conflict of interest. It is particularly important that such situations should not be perceived or construed as providing an incentive for any commercial transactions.
4.2 A hospitality benefit may be accepted if it complies with all of the
following principles:
- refusal would offend, or
- it conforms to normal business practice or other cultural practices of the giver, and
- it does not influence a member of staff in such a way as to compromise impartiality or create a conflict of interest
- it is received in the course of duty in respect of, work area responsibilities or prior approval has been received from one of the persons in Section 3.1
5. Fringe Benefits Tax
5.1 Fringe Benefits Tax is imposed on certain hospitality expenditure at the currently applicable rate. Basically the tax is applied to that portion of the hospitality expenditure, which relates to the provision of meals, refreshments, etc to University staff or associates (ie partners or spouses).
5.2 Details of the treatment of Fringe Benefits Tax (and GST implications as well) as they apply to hospitality expenditure are set out in the FBT procedure.
6. 'Grey Areas'
6.1 The following categories of expenditure should not normally be charged against any University funds:
- functions of a purely social nature
- farewells to staff leaving the employment of the University
- drinks only hospitality
However, it is recognised that there may be circumstances where the University might make a contribution to the cost of these functions. Approval for expenditure of University funds, in these cases, should be sought from one of the officers nominated in Section 3.1 above and be subject to the expenditure limit referred to in Section 3.2 above. Where practical, expenditure of this nature should be sought prior to the incurrence of the expense.
6.2 It is also recognised that, on occasions, functions are arranged which only involve the participation of University staff and the provision of hospitality is incidental to the primary purpose of the function. The primary purpose of these functions must be to further the aims and objectives of the University or the particular unit and a statement outlining the circumstances should be attached to the financial documentation.
This section is not referring to meals and refreshments provided at courses, seminars or forums arranged for the training and development of staff or for the general engagement of staff in the administration and management of the University.
Any questions about the implementation of the policy or matters not covered by it should be referred to the Chief Financial Officer in the first instance.
Appendix A: corporate entertainment
1. Definition
1.1 From time to time, the University may participate in events or enter into arrangements, which provide the opportunity to host and extend entertainment (which may or may not involve the provision of hospitality) to invited guests.
Examples of such entertainment are:
- hosting in 'corporate boxes' at sporting or cultural events
- hosting at functions such as special dinners, receptions, performances or other major events being conducted either on or off campus
1.2 Participation in corporate entertainment activities as described in the section above, should only be arranged where there is a clear benefit to be obtained for the University, such as the facilitation of sponsorship for University activities or as part of fund-raising projects.
2. Policy
2.1 It is expected that the participation in and expenditure of University funds on events and arrangements defined in Section 1.1 above should satisfy the test that "the approving officer should be comfortable in disclosing the cost of the entertainment and hospitality given, should that be required, and be able to identify the benefit to the University".
2.2 Approval of expenditure on entertainment of this type will be in accordance with the guidelines set out in Section 3.1 and Section 3.2 of this policy.
2.3 When guest lists are being compiled, the following guidelines should be followed:
- invitees must be individuals who it is believed will contribute to the University's objectives
- the number of invitees must exceed the number of University staff who are attending as hosts
- spouses and partners of principal invitees and University staff hosts may be included on guest lists if the circumstances of the event indicate this
- records of the guest lists associated with the provision of entertainment of this type must be kept for scrutiny if required
The University of the Sunshine Coast acknowledges the University of Queensland's Hospitality Policy in preparing this Policy.
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