Entertainment generally includes a guest-host relationship in which a UC Davis host invites an official guest to attend an event.
There may also be meetings that don't fall into this guest-host category but still incur allowable entertainment expenses.
If you spend funds on university-sponsored events or host official guests, learn best practices for entertainment-related spending.
- Separation of duties
- A key step your department can take when handling entertainment expenses is to have different people involved in the process. Entertainment expenses must serve a business purpose, with no personal benefit to the host or other university employee.
Best practice is to have different people:
> Host the event
> Prepare cost reimbursements
> Approve reimbursable costs
> Review and reconcile financial records
Potential consequences if duties are not separated:
> Erroneous or fraudulent charges approved for payment.
> Unauthorized or fraudulent reimbursements processed.
> Unauthorized or excessive costs incurred.
> Personal or non-business related costs are reimbursed. - Accountability, authorization, and approval
- You maintain accountability when you properly authorize, review, and approve expenses that make the best use of public funds and comply with University entertainment policy.
Best practices:
> Ensure that the proper approval authority is in place.
> Obtain pre-approval for entertainment event.
> Evaluate expenses to ensure that anticipated benefits outweigh costs.
> Verify that expenses are appropriate to the fund source charged.
> Justify why exceptional expenses were incurred and necessary.
> Obtain vice chancellor approval for all exceptional expenditures.
Potential consequences if accountability does not exist:
> Damaged public image if costs are inappropriate.
> Unauthorized, unnecessary, or fraudulent payments.
> Loss of funding.
> Improper charges to incorrect account/ funds resulting in a misappropriation of funds.
> Excessive costs incurred. - Security of assets
Once you've purchased and received the goods to be used for an approved event, secure them in a place where a limited number of people have access.
Best practices:> Secure goods in a restricted area.
> Restrict access to the appropriate staff.
> Keep inventory records of goods to assure anticipated consumption levels will be met.
Potential consequences if your assets have not been secured:
> Stolen or lost goods
> Inadequate quantity of goods and supplies to support the event
> Personal use of university assets
> Increased costs due to replacement of goods- Review and reconciliation
Your reconciliation activities ensure that your entertainment costs are accurate and appropriate. Perform monthly ledger reviews to confirm that you're paying only for approved charges.
Best practices:> Review costs to ensure that they are properly classified and recorded.
> Review fund restrictions to assure that expenses are allowable and appropriate.
> Periodically review and update signature authorizations.
Potential consequences if review and reconciliation is not performed:
> Improper charges made to your department budgets.
> Disallowances resulting from costs charged to incorrect accounts/funds.
> Payments made for items or services not provided.
> Misstated financial records.
Resources
Policies
- UCD PPM 330-80, Entertainment and Hospitality with University-Controlled Funds
- UC BUS-79: Expenditures for Business Meetings, Entertainment and Other Occasions
Questions?
For questions on entertainment, contact Travel & Entertainment.
For questions on internal control practices, contact Controls & Accountability.