Entertainment & Other Expense Reimbursements

Loyola University will reimburse employees for expenses that are authorized, reasonable and necessary to conduct university business.  Please review the guidleines for expenses as indicated below.

 

REQUIRED DOCUMENTATION AND RECEIPTS / TIMELINE FOR SUBMISSION

Policy:

In accordance with IRS accountable plan regulations, reimbursements must be submitted within 60 calendar days after business related expenses are paid to avoid being included as wages for tax purposes. Reimbursements processed after 60 days from the date the expense was paid will be added to W-2 taxable earnings and appropriate taxes will be withheld from the employee's next regular paycheck.  The 60 calendar day reimbursement period begins on the date of purchase.

Reimbursement requests must be received by the Financial Affairs Office within the 60 day period. Reimbursement requests that are submitted to other offices for approval but are not received by the Financial Affairs Office within the 60 day time period will be added to W-2 taxable earnings.

The University will not process reimbursement requests that are submitted to the Financial Affairs Office more than 90 calendar days after an expense is paid. This policy will apply to reimbursements for faculty and staff.  Reimbursement requests for expenses submitted more than 90 days after the expense was paid will be refused. 

For student reimbursements with receipts 60 days or older, the check request must be accompanied by a completed W-9 form for 1099 reporting purposes. Any single expenditure of $25 or more must be accompanied by an original receipt. If, in rare cases, original receipts are not available, an explanation must be submitted with the Expense Statement prior to processing. Expense Statements that are not properly completed and approved will be returned unprocessed to the employee with an explanation of the deficiency.

Reimbursement requests may be submitted to the Financial Affairs Office as soon as expenses are paid for immediate processing.

Examples:

For clarification, please review the following examples:

Example 1) Employee A pays for a business lunch on June 1, 2012. Employee A submits a reimbursement request for the lunch on July 1, 2012. The reimbursement request is processed and no taxes are imputed because the reimbursement was submitted within 60 days of the purchase.

Example 2) Employee B pays for a business lunch on June 1, 2012. Employee B submits a reimbursement request for the lunch on August 15, 2012. The reimbursement request is processed but taxes are imputed on Employee B’s W-2 taxable earnings because the reimbursement was not submitted within 60 days of the purchase. Accountable plan regulations require that expenses be submitted within 60 days of the expenses being paid to avoid being taxed as earnings.

Example 3) Employee C pays for a business lunch on June 1, 2012. Traveler C submits a reimbursement request for the lunch on September 15, 2012. The reimbursement request is refused and no reimbursement is provided to Employee C because the request was submitted more than 90 days after the expense was paid. 

The examples cited above refer to payment for a business lunch, but please be aware that the same process will be applied to all reimbursement requests (such as parking fees, postage, etc.).  For additional examples, please refer to the University's Travel policy.

Procedure:

The following procedures must be follwed when submitting requests for reimbursements:

  • Sufficient information must be provided to establish the business purpose of the travel, entertainment, or other expenditure by completing a properly completed Travel, Entertainment and/or Miscellaneous Expense Statement;
  • Substantiation of expenditures with original receipts. Original documentation is necessary to verify expenditures and eliminate the possibility of duplicate payments.
  • Any single expenditure of $25 or more must be accompanied by an original receipt. If, in rare cases, original receipts are not available, an explanation must be submitted with the Expense Statement prior to processing. Expense Statements that are not properly completed and approved will be returned unprocessed to the employee with an explanation of the deficiency.
  • All lodging and entertainment expenses and meals shared by two or more individuals must be supported by receipts, regardless of amount.
  • Entertainment expenses and meals shared by two or more individuals (regardless of amount) require submission of business purpose and a list of the attendees.
  • All receipts should be secured to an 8 ½” x 11” sheet of paper and attached to the Travel and/or Entertainment Expense Statements. In the event that a receipt is lost or unavailable, the Missing Receipt Affidavit must be completed and attached to the appropriate expense statement.

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Entertainment Expenses

The University recognizes that it may be necessary for an employee to incur occasional entertainment expenses while acting on behalf of the university.  These expenses may include, but are not limited to, on or off-campus meals.  To ensure compliance with IRS regulations, the business purpose of these transactions must be clearly identified.  For example, an explanation of “food purchased for staff meeting” would be insufficient. The description should include the names of each individual present (if less than 10 people are present) and an explanation must be provided that clearly identifies the need for the event and the benefit to the university.

An example of an appropriate description is, “On-campus lunch meeting with XXXXX faculty members to discuss upcoming changes in the curriculum to XXXXX program.” If there is insufficient space for a comprehensive description on a form line, please continue the description on the lines below as needed.

When requesting reimbursement for 3 or more expense items a properly completed Entertainment expense statement must be included with the Check Request.
 

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Miscellaneous Expenses

The University recognizes that it may be necessary for an employee to incur occasional miscellaneous expenses while acting on behalf of the university. The employee must ensure that expenses paid for miscellaneous items do not violate the University's Purchasing, Accounts Payable, Travel or other applicable policies. To ensure compliance with IRS regulations, the business purpose of these transactions must be clearly identified.  For example, an explanation of “books for office” would be insufficient.  An explanation must be provided that clearly identifies the need for the item and the benefit to the university.

An example of an appropriate description is, “Books for XXXXX faculty members to be used in teaching XXXXX course.” If there is insufficient space for a comprehensive description on a form line, please continue the description on the lines below as needed.

When requesting reimbursement for 3 or more expense items a properly completed Miscellaneous expense statement must be included with the Check Request.
 

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SPOUSAL TRAVEL/ENTERTAINMENT
Purpose:
This policy provides a framework, in compliance with IRS regulations, for determining the need and processing of expenses related to the spouse of an employee to travel and/or entertain on behalf of Loyola University New Orleans to further the mission of the University. Please note that this policy applies to all spousal expenses, regardless of whether the expenses are for local events or are travel-related.

Policy:
It is anticipated that from time to time spouses of faculty and staff members of Loyola University New Orleans will be expected to attend certain functions related to the ongoing mission of the University. Such functions where the employee and spouse are representing the University may include meetings either at association or conventions, alumni meetings, donor events or other meetings of organizations in which the university is involved. Additionally, it is expected that on occasion the spouses of Deans, Provost and Vice Presidents may provide a determinable benefit to the university by accompanying the employee while traveling on university business. (Reimbursement for spousal travel expenses is limited to Deans, Provost and Vice Presidents.) It is the responsibility of the Controller and Associate Vice President of Financial Affairs to determine if reimbursements for spousal entertainment and travel expenses are reimbursable and not taxable, reimbursable but taxable, or not reimbursable. Due to the potential that a spouse’s expenses may not be reimbursable and would therefore be considered a personal employee expense, no spousal expenses may be charged to a university issued credit card.

  • It is the position of the University that if it is determined that the presence of the employee’s spouse at an event serves a bona fide business purpose of the University, the travel or entertainment expenses of such spouse may be paid by the University in accordance with university reimbursement policy. All spousal expenses must be approved at the level of Dean or above, though final determination of reimbursements and taxability is made by Financial Affairs.

To be a bona fide business purpose, the presence of the spouse must be essential (not just beneficial) to the employee being able to carry out his/her business purpose for the University. The spouse's performance of some incidental service does not make it a bona fide business expense. A primarily social role does not qualify. An employee's spouse performing certain tasks (such as typing notes) and/or accompanying the employee to luncheons and dinners is not a bona fide business purpose. The spouse must perform substantive business related functions. Documentation of the bona fide business purpose should include an event or meeting agenda, a list duties performed and specific details on topics discussed and individuals engaged. Enough detail should be provided to evidence knowledge of the institutional related topics discussed.

  • In other cases, the Deans, Provost, Vice Presidents and President may determine that it would be desirable for an employee’s spouse to attend a particular function on behalf of the University because the presence of the spouse will generate significant benefit to the university. However, the expenses may not meet the IRS standards of bona fide business purpose as described in section 1 above. In these cases, if the reimbursement of the spouse's expense is approved at the appropriate signatory level and the significant benefit to the university can be documented (subject to approval by Financial Affairs), it will be necessary under IRS code to include such reimbursement in the employee's income as a taxable employer-provided benefit.
  • Unless significant direct benefit to the university is derived by the spouse’s presence at the event or function, the spouse’s expenses are not reimbursable and will be the personal responsibility of the employee.

Procedure:
All travel and entertainment by spouses of employees of Loyola University New Orleans will be reviewed and a specific determination made as to University need and business purpose based upon the following:

  • In some cases, it will be determined that there is a bona fide business purpose for the spouse to represent the University at a particular function. For spousal travel or entertainment to be considered for application of the bona fide business purpose exemption the Spousal Travel/Entertainment Documentation form must be completed and authorized at the appropriate signatory level (Dean and above). If it is determined that a bona fide business purpose does exist, Financial Affairs will authorize the expenditure, and the travel or entertainment expenses of such spouse may be paid by the University in accordance with the University's reimbursement policy. The approved Spousal Travel/Entertainment Documentation form should be submitted along with the applicable expense statements and appropriate documentation upon completion of the event. This form must be attached to any reimbursement request related to spousal travel or entertainment. There will be no tax consequences to the employee if the event is deemed to meet the IRS standards of bona fide business purpose.
  • In other cases, the Deans, Provost, Vice Presidents and President may determine that it would be desirable for an employee’s spouse to attend a particular function on behalf of the University because the attendance of the spouse will generate significant benefit to the university, but the expenses do not meet the IRS standards of bona fide business purpose. In such cases, if the reimbursement of the spouse's travel is approved at the next signatory level and the significant benefit to the university can be documented (subject to approval by Financial Affairs), it will be necessary, under IRS code, to include such reimbursement in the employee's income as a taxable employer-provided benefit. The Spousal Travel/Entertainment Documentation form must be completed to indicate the benefit derived by the university. Additionally, to appropriately account for the cost of the spouse’s expenses, a separate expense statement must be completed by the employee documenting the expenses of the spouse. {For travel costs associated with spouses of Deans, Provost and Vice Presidents, any cost increases that result from the spouse’s travel (ex. double vs. single room, additional driver added to rental vehicle, etc.) must be clearly indicated on the spouse’s expense statement.} The employee will be reimbursed for the spouse’s expenses, but the total amount of the spouse’s expense will be imputed as taxable income to the employee and applicable taxes will be withheld on the employee’s next regular paycheck.
  • Unless significant direct benefit to the university is derived by the spouse’s presence at the event or function, the spouse’s expenses are not reimbursable and will be the personal responsibility of the employee.

Due to the potential that a spouse’s expenses may not be reimbursable and would therefore be considered a personal employee expense, no spousal expenses may be charged to a university issued credit card. 
 

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