Business entertainment expenses (business meals) are often essential for employees to carry out the mission of the School of Government (SOG). Business meals occur when an employee is hosting a group of individuals for a specific business purpose and the meal is provided as a part of that business meeting.
Funding for business meals is limited, and not all fund sources may pay for business meals.
SOG specific guidelines and limitations for business meals
SOG employees are required to seek approval from their supervisor, department head, or SOG Leadership Team prior to incurring the expense. All business meals must also follow the University policy and the payment process referenced below.
- Operations departments are granted morale funds in the amount of $500 per calendar year to support business meals and professional development activities. These activities should be approved by the department director.
- Entrepreneurial Initiatives are responsible for setting appropriate internal budgets for business entertainment in accordance with available funding and limitations of funders.
- Faculty should seek approval from the appropriate Division Director for business meals, unless the faculty member has funding from a contract, grant, or gift specifically deemed for this purpose, or if using Professorship funds for appropriate research-related business entertainment expenses.
- Recruitment business meals should follow the parameters described below and should be approved by the Associate Dean for Human Resources.
- Business meals in support of advancement activities should be approved by the Associate Dean for Advancement.
- Requests to use School funding to support other business meals in support of special activities or initiatives, such as committee meetings, meet and greets, and celebrations, should be directed to the SOG Leadership Team. Contact the Associate Dean for Business and Finance to request approval.
University Policy on Business Entertainment Expenses
The following summarizes important elements of University Policy. See UNC Policy Knowledge Base for full details.
Business entertainment expenses are considered appropriate only if the following three conditions are satisfied:
- there must be a business connection/reason for the expenses; The business connection requirement generally is satisfied if the expenses are incurred in connection with the performance of services as an employee.
- the employee must substantiate (document) the expenses (documentation requirements are detailed below); and
- the employee must return to the SOG amounts in excess of the substantiated (or deemed substantiated) expenses.
See UNC Policy Knowledge Base for further guidance around specific funding sources and business purposes.
Process for paying for business meals and documentation requirements
Allowable Payment Methods
Business Entertainment Expenses may be paid for through the following methods:
- SOG Services Ramp Card – allowed for Business Entertainment Expenses in support of general school operations or in conjunction with specific programs and events as defined in university policy.
- Purchasing Card (P-Card) - allowed only for Business Entertainment Expenses which do not include Alcohol and do not exceed $5,000.
- Travel & Expense (T&E) Card - allowed for Business Entertainment Expenses which do not exceed $5,000.
- Requisition - if the event exceeds $5,000 or requires advanced payment.
Documentation Requirements
Business entertainment expenses must be documented (substantiated) to meet requirements of the federal tax code (see section below), and prudent business practices. To meet these standards the expenses must be documented to show:
- Identification of the persons or group being entertained. If a small group (eight or fewer individuals) is being entertained, the names and total number of all persons attending must be shown.
- A statement as to the reason for such business entertainment. Indicate how the business entertainment benefited the SOG and clarify the relationship of the persons in attendance to the particular aspects of the SOG's programs or activities (titles, committee names, field of interest of person being entertained, reason for visitor being on campus, etc.).
- The place of entertainment. The location must be provided. Receipts for business entertainment expenses are required for reimbursement to employees. If payment is to be made to a vendor, the normal invoice or statement of costs is required. If payment is made on the P-Card, T&E Card, or out-of-pocket, a copy of the credit card receipt and the itemized receipt is required. If the itemized receipt is not available, a Missing Itemized Receipt Affidavit form must be completed and submitted.
Additional Resources:
SOG Business Meal Policy