Hospitality

FREQUENTLY ASKED QUESTIONS

(Questions/Answers 1 – 14 were provided by the CSU Chancellor’s Office; Questions 14 and above were added by SFSU Fiscal Affairs/Accounts Payable)

Q1. What constitutes a gift of “public funds?”

The California gift of public funds doctrine set forth in the California Constitution, Article XVI, §6, prohibits the giving or lending of public funds to any person or entity, public or private. “In determining whether an appropriation of state funds or property is to be considered a gift, the primary question is whether the funds are to be used for a “public” or “private” purpose. If they are for a “public purpose”, they are not a gift within the meaning of [§6 of art. XVI]. If an expenditure serves a primary public purpose, it is not a gift even if it incidentally benefits an individual.

Q2. Can I give awards to CSU employees or students?

An employee can be recognized for superior accomplishments, within specified campus guidelines. Life transition events like birthdays, weddings, and the like, occur to everyone so cannot be considered superior accomplishments. Awards are permitted within the campus defined monetary limits and subject to IRS reporting requirements. Awards may be given to recognize years of service at the time of retirement, but the statutory authority to make awards does not authorize paying for a “retirement party”.

Q3. Can I send gifts or flowers with state funds?

Typically, no. Gifts or flowers are not permissible when there is solely a personal benefit. There may be justification if the intended business purposes complies with campus, CSU, IRS andGovernment Code restrictions.

Q4. What CSU funds are included in state funds?

State University Trust fund (state fund 0948) is continuously appropriated by the legislature (EC §89700-89726) and therefore all CSU funds within state fund 0948 are state [public] funds. This includes, but is not limited to, State University Parking Revenue Fund (EC §89701(b)), State University [Health] Facilities Revenue Fund (Education Code §89702(c)), State University Continuing Education Revenue Fund (Education Code §89704(a)), CSU Dormitory Revenue Fund (Education Code §90036) and Lottery (Government Code 8880.5).

Q5. I would like to meet with my colleague over lunch to discuss a business topic, can I be reimbursed?

Typically no. Reimbursement for meals are not permissible when there is solely a personal benefit. In general, business meeting with individual colleagues is not permitted. There may be justification if the business purposes for such an expense complies with campus; CSU, IRS and Government Code restrictions then it could be allowed.

Q6. Can I provide lunch for an all-day meeting?

When a meeting takes place over an extended period and the agenda includes a working meal, there may be justification that the meal is integral to the business function. Considerations include:

• Meals or light refreshments provided to employees on a frequent or routine basis are considered taxable income by the IRS and are therefore not permitted under this policy.
• Meals or light refreshments should be limited to no more than twelve times per year, per group.
• Meals or light refreshments provided to a group should be counted on an event basis (e.g. a two-day meeting should be counted as one event in determining compliance with these guidelines).

Examples where food and beverage may be permitted include:

• A meeting where there is a scheduled speaker during the meal period;
• A meeting where the participants work through the meal period; or
• Circumstances where it would be too time-consuming or disruptive for participants to take a meal break away from the meeting location.

Q7. Can I use state funds to have a retirement party?

No, parties are not allowed. An employee can be recognized for superior accomplishments, within specified campus guidelines.

Q8. For employee morale purposes, I would like to use state funds to provide a departmental welcome breakfast each time we bring in a new employee. Is this permitted?

Typically no. Employee meetings that are carried out on a regular or frequent basis are not permitted under this policy. Additionally, public expenditures that are driven solely by personal motives are an impermissible use of state funds. However, if the business purposes for such an expense complies with campus, CSU, IRS and Government Code restrictions then it could be allowed.

Q9. What activities may be permissible with state funds when it is determined that there is a business purpose for the expenditure?

• Awards to students to participate in a non-researched (grant) funded survey. (Subject to IRS tax laws)
• Incentives to anyone, including employees, to participate in a research funded survey or study, within the terms of the grant and the grant serves an instructional purpose. (Subject to IRS tax laws)
• Awards and recognition to students
• Decorations purchased as part of a ceremony at a public event.
• Expense related to Fundraising in support of providing a better student experience.

Q10. What activities would not be permissible without a business purpose?

• Gift card, gift basket, flowers or other non-cash gift as a thank you to consultants, guest speakers, or employees at another campus;
• Gifts for employee birthdays, weddings, anniversaries, baby showers, etc.;
• Farewell gatherings and retirement parties; and
• Bereavement or sympathy gifts.

Q11. How is “infrequent” defined?

Infrequent is defined by the IRS as no more than 12 times per year per group.

Q12. How do you define reasonable and appropriate?

This should be documented in the campus procedures.

Q13. Some departments provide logo apparel to their employees and require them to wear the shirts during business hours (e.g. orientation). Is this a gift?

No this would not be considered a gift, if it supports a business purpose.

Q14. The college has a standard (monthly) lunch meeting with outside industry advisors to discuss course development and research collaboration of their college. Can state fund be use for this type of event?

Meals or light refreshments may be permitted if the expenses occur infrequently, are reasonable and appropriate to the business purpose in accordance with campus policy.

Q15. Our department celebrates employee birthdays on a quarterly basis. Can state funds be used to pay for any part of this celebration?

No.

Q16. Our department is located on a floor in our building that has a small, employee kitchen. Can state funds be used to furnish or to supply the kitchen?

State funds may only be used for basic cleaning supplies to keep the kitchen clean and sanitary outside of the normal maintenance and cleaning performed by University Housekeeping. Examples include dishwashing detergent, sponges, hand soap. However these items are not hospitality.

State funds may not be used for any type of food item or other food-related item (e.g. plates, cups, glasses, napkins, cutlery, serving dishes).

Q17. Our department would like to honor our student assistants for their work at the end of the year. Can state funds be used for this?

Yes. Employee recognition events may be paid for with state funds. However, awards should only be made to employees who make extraordinary work contributions to the University.

Q18. Our department would like to boost the morale of our student assistants by providing a light meal and giving them $5 gift cards. Can state funds be used for this?

Yes, employee-morale building events, with a documented business purpose, may be paid for with state funds. Employee-morale building events must be approved by a Vice President. However, awards, such as the $5 gift cards, should only be made to employees who make extraordinary work contributions to the University.

Q19. My dean would like to recognize the outstanding contributions of a few faculty members by presenting them with gift cards. Can state funds be used for this?

Yes, if the award is justified by the faculty members’ outstanding contributions. The maximum award amount is $200 and is reportable and taxable.

Q20. My dean would like to recognize the outstanding contributions of all faculty and staff by presenting them with gift cards. Can state funds be used for this?

No. An award to an employee must be for extraordinary work contributions made by that employee. Offering an award to large number of employees is not consistent with the term “extraordinary.”

Q21. My college hosts an annual retreat. Can state funds be used for expenses related to the retreat?

Yes, if the retreat has a business purpose with a predetermined agenda. Expenses must comply with this practice directive.

Q22. My college (or department) hosts a meeting at the beginning of each semester. Can state funds be used to provide light refreshments at these meetings?

Yes, if the meetings have a business purpose with a predetermined agenda.

Q23. My program will be tabling on behalf of the University at an off-campus event. We would like to offer promotional items that promote the mission of our program. Can state funds be used to purchase these promotional items?

Yes. If a University business purpose is being achieved, state funds may be used to purchase these items. Promotional items bearing the University’s logo must be approved by University Advancement.

Informational and educational items, related to a University program, such as brochures, illustrative guides, etc. are deemed programmatic and are not subject to the requirements of this practice directive.

Q24. My department would like to collect money from our employees to send flowers to an employee who is in the hospital. Is this allowed?

This practice is not governed by this practice directive.

Q25. My department chair would like to reward several students for their outstanding academic performance by paying them a stipend. Is this hospitality? If so, can state funds be used?

This is an award – not a stipend. This is hospitality and state funds can be used for this expense. The award should be either a tangible item or a gift card; cash awards are not allowed.

Q26. We will be providing participating students with a stipend in our program. Our program helps prepare students to apply for graduate programs. Is this hospitality? If so, can state funds be used?

No, this is not hospitality. States funds may be used for this.

Q27. I will be traveling to conduct interviews for an open position in my department. I will be paying for each candidate’s dinner as part of the interview. Is this a hospitality or travel expense? Can state funds be used for this?

The meals are subject to this practice directive and should be listed as a business expense and a hospitality form must be attached to your travel expense claim.

State funds can be used to pay for the meals (with the exception of alcoholic beverages). Maximum limits apply (e.g. $50 for dinner).

Q28. A Pulitzer Prize-winning author has agreed to give a lecture and conduct a workshop for my writing class. She is not charging the University anything for this or seeking reimbursement for any related costs such as travel. I would like to acknowledge her generosity and thank her with a small gift basket from a local gift shop. The gift basket costs $25. Can state funds be used for this?

Yes, while gifts are not typically allowed to be purchased with state funds, these circumstances indicate a clear business purpose and public benefit for this reasonable gift.

Q29. Our department would like to send flowers to an employee whose spouse recently died. Can state funds be used for this?

No. State funds may not be used for sympathy gifts.

Q30. Can state funds be used to purchase alcoholic beverages for a fundraising event?

No. State funds may not be used to purchase alcoholic beverages.

Q31. An alum from our college just won a prestigious award in her discipline. Can state funds be used to send congratulatory flowers?

No. State funds may not be used for gifts.

Q32. I am contemplating providing hospitality that does not comply with this policy. I am afraid I will not achieve an important business purpose if I don’t provide this hospitality. What are my options?

Exceptions to this practice directive may be approved by your Vice President. It is suggested you obtain this approval prior to incurring any costs.

Q33. Are Trust Funds considered state funds?

Yes. Trust funds agreements may impose stricter hospitality rules (and not allow hospitality) but an agreement cannot be less restrictive than this practice directive.

Q34. Can state funds be used to purchase coffee, tea, sugar, candy, bottled and snack items for my Vice President’s (Dean’s) Office?

Generally, no. Exceptions to the practice directive should follow §812.

Q35. Can state funds be used to purchase plates, cups, napkins, cutlery, etc. for an event where a meal and light refreshments are served?

If the event is for a University business purpose and complies with this practice directive, state funds may be used to purchase these items. Bulk purchases of large quantities of these items must be monitored to ensure left over items are used appropriately.