The Business Office assists Amarillo College in preserving and protecting the high level of public trust earned and valued by the College.
The reasons behind these requirements include:
ensure consistency of purchases,
ensure the use of these funds are appropriate based on fulfillment of AC’s mission and core values,
ensure the expenses are reasonable, and
anticipate any public release of any requested information and the subsequent reactions by media, taxpayers, and/or donors.
These requirements establish expectations for employees to follow the tax rules set forth by the Internal Revenue Service (IRS) - Publication 463 and State of Texas Comptroller’s Office. In addition, federal and state grants and contracts have additional regulations including the Office of Management and Budget and the particular funding source. When regulations contradict, the more restrictive regulations will apply.
Official Functions - established events held for the purpose of achieving AC’s mission and core values. Generally, official functions include recognized events for the purpose of institutional enhancement such as:
Receptions related to college-wide community activities,
Recruitment/college nights/job fairs,
Receptions approved by AC’s President or Board of Regents,
Professional development activities including retreats, training events, new employee and employee orientation
Open houses for the community, and
Meetings which are directly related to the conduct of official college business and generally occur to support employee time and productivity.
Business and Entertainment Meals - considered taxable income to the employee if:
(1) The activity is not directly related to the employee’s job.
(2) The expense is lavish or extravagant under the circumstances as defined by the President’s Cabinet member who is head of the division.
(3) The official host (or other designated host) is not present when the activity takes place.
(4) The expense is not substantiated with supporting documentation such as a sales receipt.
Entertainment - generally occurs to support a future benefit to the college. Examples include expenses for cultivating potential donors, grants, or employee training and/or teambuilding.
Institutional Funds (General Unrestricted) – may only be used for expenditures for official functions or entertainment based on the aforementioned intents.
Restricted Funds Projects (Grants and some Contracts) – must be identified as allowable expenses based on the Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions and any other regulations of the funding sources. Office of Grant Administration will determine if meals or receptions are deemed allowable for specific grants.
Agency Funds - established for a particular purpose by a College group, club, or association and may be used as needed according to the purpose of the fund.
AC Foundation Funds - may be used for expenditures for official functions and/or entertainment. Foundation and gift funds may be used for official functions, business meetings, and entertainment expenditures only as specifically authorized in the gift agreement and only to the extent and for the purpose so authorized.
Bond Funds – funds which may be used for approved expenditures and may not be used for any other purpose.
Typical Expenditures - include food for meals or light refreshments, beverages, related services (e.g., labor charges, room rental, equipment rental, decorations, flowers, entertainment, and similar expenditures) incurred in connection with official functions and entertainment that are primarily in support of AC’s mission and core values.
Appropriate and Reasonable – as identified with the intended expenditures, the appropriateness and reasonableness must be assessed and it is the responsibility of the President’s Cabinet member to determine reasonableness.
Expenditures for regular and special meetings of the AC Board of Regents or business meetings directly related to the conduct of official college business.
Expenditures for food/beverages for advisory committee meetings.
Expenditures for regular coffee, tea and beverage supplies (sugar, artificial sweetener, creamer, cups, stir sticks, coffee maker) for employee consumption is exempt from this policy and is allowable on institutional funds. Depending upon regulations for other funds (i.e. grant/contract, agency, etc.) funds may allow for these purchases but this must be determined prior to making purchases.
Expenditures for food/beverages which are included in contract class agreements.
Expenditures for food/beverages for Departmental/Divisional working meetings approved by the appropriate Cabinet member or supervisor. Purchases for these approved meetings will appear on the appropriate Cabinet member’s Executive card as confirmation of their approval. However, the direct reports to the V.P. of Academic Affairs will make the purchases on their procurement cards after obtaining approval. Any other payment methods will be considered not approved and will not be paid.
Parties such as birthdays, retirements, holidays
Employees catering or providing services for official functions or entertainment because these must be considered taxable income
Meals provided to a spouse, family member, or other person accompanying a college employee
Alcohol purchases, unless approved by AC’s President, and when the funding source is not otherwise restricted from such purpose.
Maximum Rates – For Meals -- maximum per-person expenditure (average) amount as set by the AC Board of Regents includes the cost of the food and beverages, labor, sales tax, delivery charges, and other service fees. If a reception before a meal includes beverages and hors d’oeuvres, the combined charges for the reception and the meal should be treated as a single event for purposes of calculating per person. The costs of room rental, room setup fees, media rental, and decorations, etc., are not included in the per-person costs unless those costs cannot be separated by the vendor. The current per diem rates are $7 for breakfast, $11 for lunch, $23 for dinner, and $5 for incidentals.
Required Approvals - the approving authority should be the individual’s supervisor and/or President’s Cabinet member.
Departmental Review – the President’s Cabinet member or his/her designee is responsible for reviewing all transactions related to official functions and entertainment based upon the intended expenditures.
If proper documentation is not provided after expenses have been incurred, reimbursement will be denied, or the employee responsible will be required to reimburse the college.
The following items must be submitted to the Business Office to ensure that AC meets IRS requirements:
Type and nature of event (i.e. donor entertainment, business dinner, college-wide reception, advisory committee meetings)
Documentation of names of employees and others attending, date and location of the event
Original itemized invoices and/or receipts - either on the receipt itself or on a page with the receipt attached
Total cost of the event
Signature and printed name of the approving authority
Any exceptions to this policy, regardless of funding source, must have written approval from the Vice President of Business Affairs or the Associate Vice President of Finance or another member of the President’s Cabinet prior to incurring the expense for reimbursement from AC.
APPROVED DATE: 10/11/2011
IMPLEMENTATION DATE: 11/01/2011
REVISED DATE: 8/25/15 EFFECTIVE DATE: 9/1/2015