9.13 Business Meals

Policy Information

Purpose and Summary

To provide policies and procedures related to expenditures made for meals, light refreshments, non-alcoholic beverages, and related expenses (except for Meal Reimbursement for travelers and meals required to be provided to student athletes). The University is a public institution and has a fiduciary responsibility as stewards of public funds to exercise discretion to pay for these items and to document how each purchase serves a public purpose and benefits the University.

Source

Arizona Revised Statutes, including but not limited to §35-301
Arizona State Constitution, including but not limited to, Article 9 Section 7
Code of Federal Regulations, including but not limited to, 2 CFR 200.432 and 200.438

Scope

This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.

For meals and incidentals incurred while traveling on University business, refer to 14.13 Meal Reimbursement.

Definitions

1. Allowable: Expenditures that are Reasonable, Business-Related, have adequate supporting documentation and a University Business Purpose and benefit, and are not prohibited by any policy or law, and are therefore payable from University funds. Note that not all Allowable expenditures are allowed on all funding sources.
2. Business Meals: Meals, light refreshments, and non-alcoholic beverages, including tax and tip and related services, incurred in connection with meetings or events focused primarily on business relations or dissemination of information. Business Meals do not include Meal Reimbursement.
3. Food: Food items, non-alcoholic beverages, and water purchased for use in classroom or educational demonstrations (e.g. nutritional education), for research, for patients, or for animal feed. Must be directly related to the teaching, research, and public service mission of the University.
4. Meal Reimbursement: A specific amount of money limited to University of Arizona travelers to cover meals and incidentals while traveling on University business. The rates are established by the State of Arizona and designated to reduce the administrative burden on travelers to eliminate collecting receipts per meal. These rates are not designed to cover the entire cost of the meal, but to cover the difference between the costs of a meal of which the traveler might otherwise partake when not traveling for the University.
5. Business Purpose: A statement that justifies how an expense is appropriate and Reasonable, and how it supports and/or advances the goals and objectives of the University.
6. Business-Related: Ordinary and necessary expenses incurred to conduct University of Arizona business.  These expenses are for the primary benefit of the University over the benefit of an individual.
7. External Parties: Individuals who are guests of the University such as community leaders, consultants, customers, donors, prospective faculty or staff, visiting lecturers, or vendors, who are not University employees.
8. Personal: Expenses that are for the primary benefit of an individual over the benefit of the University. Refer to Misuse of University Assets Policy for additional information.
9. Reasonable: An expenditure is considered Reasonable if:
   1. The nature of the goods or services acquired, and the amount involved reflect the actions of a prudent person under the circumstances,
   2. The expenditure is appropriate given the mission of the University, and
   3. Reimbursement for, or direct payment of, the expenditure is not otherwise disallowed by any University policy.
10. Unallowable: Expenditures that are not Reasonable or Business-Related, lack a University Business Purpose and benefit, are Personal, or are prohibited by any policy or law, and are therefore not payable or reimbursable from any University funds regardless of payment method.
11. University-Established Committees: Standing committees that can provide evidence of their continuing status via an established University website.

Policy

1. Business Meals that meet all other requirements to be Allowable, are permitted only when provided at:
   1. Business-Related meetings or events where External Parties are present, and their attendance is necessary for the business being conducted. If hosting prospective faculty or staff, University funds can only be used to pay for a Business Meal for the candidate, a guest of the candidate, the hiring committee chair, and one other member of the unit.
   2. Employee Recognition events that meet the requirements of 9.11 Employee Recognition and the events are infrequent (no more than annually).
   3. Retiree farewell events that meet the requirements of 9.11 Employee Recognition.
   4. Cross-departmental and intra-departmental professional development workshops and training sessions with 10 or more employees (less than full day [six hours] is limited to light refreshments).
   5. University-approved emergency response.
   6. Meetings of University-Established Committees and shared governance bodies (limited to light refreshments).
   7. Student engagement events with current or prospective students (includes activities linked to the desired outcomes of higher education and what the University does to induce students to participate in these activities).
   8. Student convocation and award events.
   9. Student performances and rehearsals (limited to light refreshments).
2. Alcohol, including associated tax and tip, is Unallowable.
3. Business Meals must maintain a Reasonable cost per person, including tax and tip. Business Meals exceeding the following guideline for Reasonable cost require a memo documenting justification signed by a dean or department head and are subject to additional review that will result in processing delays.
   1. Light refreshments $10
   2. Breakfast $25
   3. Lunch $30
   4. Dinner $60
4. Tipping may not exceed 20% of the total amount.
5. Business Meals require a valid Business Purpose and the following supporting documentation:
   1. Agenda or program,
   2. Date and location,
   3. Itemized receipt or invoice, and
   4. List of attendees and their relationship to the University.
6. Purchasing an on-hand supply of coffee, tea, or snacks for future meetings or events is not permitted unless there is a demonstrated regular practice of providing these refreshments for external parties and there are documented controls and safeguards that prevent consumption of these supplies by university employees. Reasonable supplies of cutlery are permitted.
7. All Business Meals, except for water provided in public areas and permitted on-hand supplies, must be for a specific Allowable meeting or event and accompanied by the required supporting documentation above.
8. Business Meals are not allowed on State funds and are limited on sponsored projects.
9. Business Purpose and supporting documentation must be included in the transaction within UAccess Financials.
10. Failure to follow this policy will result in disapproval of Requisitions, non-payment or reduced reimbursement, or suspension or cancellation of the PCard.

Procedures

1. Refer to 9.01 Determining Purchasing Method to determine the appropriate purchasing method.
2. Refer to Allowable Expenditure Summary by Fund Source to determine allowable fund types for Business Meals and Food.
3. For instructions on documenting Business Purpose in UAccess Financials, refer to the Business Purpose Guide.
4. Refer to 9.12 Independent Contractor Services for additional policy details specific to meal reimbursements for Independent Contractors.
5. Refer to 9.11 Employee Recognition for additional policy details specific Employee Recognition and farewell events.
6. Refer to 9.16 Payments to Nonresident Aliens before payment is made to or on behalf of a nonresident alien as some visa types do not allow payments. For additional details on specific situations please contact Tax Services.
7. For events on Main Campus that include Business Meals and exceed $750, refer to Catering & Alcohol Service.
8. Refer to 9.10 General Expenditure Policy for procedures related to reimbursements and Requisitions.

Object Code Usage

9. Business Meals not associated with faculty or staff recruitment should be recorded using Object Code 5175 – Business Meals.
10. Record supplies, room rentals, and other charges to an appropriate Object Code based on the nature of the expense. Do not record these purchases as a Business Meal.
11. Business Meals associated with faculty or staff recruitment should be recorded using Object Code 5570 – In State Interviewing and Recruiting Expense or 5571 – Out of State Interviewing and Recruiting Expense.
12. Do not record Food purchases as a Business Meal. Food purchases should be recorded to an Object Code that explains the reason for purchasing the Food. For example, Food purchases to be used in teaching should be recorded to 5180 – Educational Supplies, Food to feed animals should be recorded to 5110 – Agriculture Supplies – Feed and Seed, and Food used in research should use 5290 – Research Supplies/Medical – Laboratory.
13. Do not record Meal Reimbursement to travelers as a Business Meal.

Frequently Asked Questions

1. What are examples of meetings or events where Business Meals may be permitted?
   • University hosted conferences, seminars, symposiums, or colloquiums that include non-University attendees and/or guest speakers
   • Student recruitment events
   • Student engagement events
   • An annual Employee Recognition event
   • A retiree farewell event meeting the requirements of 9.11 Employee Recognition
   • An employee training with 10 or more employees, such as the Crossroads Conference
   • Convocation and student award events
   • Meetings of University-Established Committees 
   • Meetings of Shared governance bodies
      
2. Is purchasing a table that includes a meal at a charitable event allowable?
   The purchase of a table that includes a meal at an event where attendance is Reasonable, Business-Related, supported by a University Business Purpose and benefit, and permitted on the specific funding source may be Allowable. Supporting documentation must be provided, including a list of attendees, and may include a sponsorship flyer listing the University as a sponsor or a letter from the event host showing sponsorship benefits, including the table at the event. Charitable contributions, donations, and alcohol are Unallowable.
    
3. Can University funds be used to purchase alcoholic beverages?
   No, the purchase of alcohol, other than by the Student Union for cooking or resale purposes, is Unallowable. Certain alcohol-related expenses, with a valid Business Purpose, are Allowable. Examples include alcohol permits and payment for services such as setup and bartenders.
    
4. Are any alternatives available for payment of alcohol and Business Meals that are not permitted on University funds?
   Departments may contact the University of Arizona Foundation or refer to the Foundation’s Financial Services Policies & Procedures Manual.
    
5. What are some examples of appropriate Food expenses?
   Food purchases must be Reasonable, Business-Related, supported by a Business Purpose and benefit, permitted on the specific funding source, and have adequate supporting documentation. Some examples of when the purchase of Food may be appropriate include:
   1. Water or snacks provided to patients or study participants, when permitted on the funding source.
   2. Food used in a classroom demonstration about nutrition.
   3. Feed for animals.
       
6. Where should other event costs, such as facility rentals and entertainers be recorded?
   Costs should be categorized based on the nature of the expense. Facility rentals and related costs should be recorded to 4690 – Rentals - Other. Services for entertainers and performers should be recorded to 3130 Entertainers & Performers.
    
7. Arizona Sands Club includes a service fee on the receipt, can an additional tip be included?
   No, the service fee that is charged by Arizona Sands Club includes a tip for the service staff thus, an additional tip exceeding 20% will not be reimbursed or will require repayment to the University if the PCard is utilized.
    

8. Does the Business Meals Reasonable cost per person include tax and tip?
   Yes, the Reasonable cost per person includes tax and tip. Refer to the following table to help users in calculating per person costs excluding tax and tip.

   		Staying within reasonable limit
   Reasonable Cost Per Person		Purchase Amt	Tax (AZ 8.7%)	Tip (max 20%)	Total	Rounded Purchase Amt
   Light Refreshments	$ 10.00	$ 7.70	$ 0.67	$ 1.54	$ 9.91	$ 7.00
   Breakfast	$ 25.00	$ 19.40	$ 1.69	$ 3.88	$ 24.97	$ 19.00
   Lunch	$ 30.00	$ 23.30	$ 2.03	$ 4.66	$ 29.99	$ 23.00
   Dinner	$ 60.00	$ 46.60	$ 4.05	$ 9.32	$ 59.97	$ 46.00

    

9. For candidates interviewing, do we have to treat internal candidates differently than external candidates for the purpose of Business Meals?
   There should be no difference in treatment of external/internal candidates.
    
10. Previously, the full recruitment committee might attend the recruitment dinner. Are recruitment meals now limited regardless of faculty rank?
    For recruitment meals with prospective faculty or staff, University funds can only be used to pay for a Business Meal for the candidate, a guest of the candidate, the hiring committee chair, and one other member of the unit. This is true regardless of faculty rank.
     
11. Is there flexibility in replacing the hiring committee chair with their supervisor or other member if the chair is unavailable for a recruitment meal? 
    Yes, there is flexibility as to who can attend. Please provide supporting documentation demonstrating the attending alternate to the hiring chair.
     
12. What is the definition of light refreshments?
    Light refreshments are items that can be purchased within the $10 limit for Reasonable cost. The $10 limit was developed based on Student Union costs for providing non-alcoholic drinks (e.g., coffee, tea) and light snacks.
     
13. If we have a large group on campus and the Student Union can't provide light refreshments for less than $10/head, what is the recommendation?
    The $10 limit was developed based on Student Union costs for providing non-alcoholic drinks (e.g., coffee, tea) and light snacks. If this cannot be met, consider whether light refreshments are necessary for the event.
     
14. Can you define "external" attendees in regards to the business meal policy? Does that include all U of A employees, students, DCCs?
    As defined above, External Parties are individuals who are guests of the University such as community leaders, consultants, customers, donors, prospective faculty or staff, visiting lecturers, or vendors, who are not University employees. University employees, students, and DCCs are not considered external parties.
     
15. The new dollar guidelines seem to exclude business lunches at the Sands Club due to their costs and service charge. Is this no longer allowed?
    The policy will allow such expenditures if they include "justification signed by a dean or department head."
     
16. Since the new policy went into effect during the fiscal year, are departments expected to recode expenses previously recorded on Object Codes 5170 and 5550?
    No, departments are not expected to move historical expenses. If a document was coded incorrectly using object codes 5170 or 5550 and a correction needs to be processed, a note should be placed on the document indicating the correct accounting string and the document should be ad hoc routed to the UA FSO FM Operating Fund Accountants group. For corrections on Sponsored Projects accounts, the note will also need to include the required Error Certification information. The Fund Accountants are tracking these documents and will reopen the old object codes to correct transactions on behalf of campus.

Related Information

Allowable Expenditure Summary by Fund Source
Arizona Revised Statutes
Business Purpose Guide
Catering & Alcohol Service
Code of Federal Regulations
Convocation and Award Events – Best Practices
Employee Reimbursements
FSM 9.01 Determining Purchasing Method
FSM 9.10 General Expenditure Policy
FSM 9.11 Employee Recognition
FSM 9.12 Independent Contractor Services
FSM 9.16 Payments to Nonresident Aliens
FSM 14.13 Meal Reimbursement
Reasonable Expense Guide
Sponsored Projects Services
Sponsored Projects Services Other Costs Guidance
Unallowable Expenditures Table

* Please note that sections titled Frequently Asked Questions and Related Information are provided solely for the convenience of users and are not part of the official University policy.