Handbook of Business Procedures

9.1.1. ENTERTAINMENT AND OFFICIAL OCCASION EXPENSES

The University has Launched an Improved HBP 9.1.1 Entertainment Expenses and Guidelines. The updated HBP policy outlined below is currently in effect and is expected to be implemented by all CSUs. Please visit PPS News for more details.

Sec. 1 Purpose

The purpose of this policy is to govern the manner and extent to which funds of The University of Texas at Austin may be expended for entertainment for business purposes, to specify the fund sources that may be used for such purposes, and to provide guidance for the reasonable expenditure of funds or other expenses often related to reimbursement from institutional funds. All guidance is provided to ensure the university maintains compliance with:

1. State laws, including the Texas Constitution and statutes, the general appropriations action, and Texas Administrative Code. Additional information may be found on the Texas Comptroller of Public Accounts website. See also here.
2. Internal Revenue Service guidance on taxable income (IRS Publication 463, Chapter 2: Meals and Entertainment and IRS Publication 274, Expenses for Business Meals). See also here.
3. UT System Regents Rule 20205: Expenditures for Travel and Entertainment by Chief Administrators and UT System’s entertainment policy.

Sec. 2 Principles

Entertainment expenses must be considered reasonable and justifiable as determined by the approving authority. They should be cost-effective, within budget limits, and have a clear business purpose for The University of Texas at Austin (refer to Section 5 for allowable expenses and Section 4.2 for maximum permitted amounts). The University retains the right to deny reimbursement for any expenses deemed inappropriate.

Sec. 3 Authority and Applicability

Authority is provided by the UT System Board of Regents’ Rules and Regulations. This policy applies to all employees of The University of Texas at Austin, with the exception of the President, who for purposes of entertainment expenses is guided by Rule 20205 of the Board of Regents’ Rules and Regulations, Expenditures for Travel and Entertainment by Chief Administrators.

Sec. 4 Policy on Entertainment Expenses

4.1 Allowable Expenses.

Expenses for entertainment must be deemed appropriate in the best judgment of the approving authority, be cost-effective, within budget authority, and serve a clear business purpose (see Sec. 5). Refer to Sec. 6.3. for information on funding sources and limitations.

4.2 Maximum Permitted Amounts.

Maximum per person rates for entertainment expenses incurred are set forth below. Beginning in 2025, these rates will be reviewed every five years by the Senior Vice President and Chief Financial Officer and adjusted if appropriate. Note that the deans or other senior administrative officials may set a lower dollar limit as deemed in their best interest. In addition, specific limitations may apply to some sponsored or donor funds.

a) Per person maximum for entertainment expenses:

1. $100/person per meal or event, including food/beverage, alcohol, tax, gratuity, and required service fees. The cost should be appropriate for the type of meal or event, and this limit applies to all venues including restaurant expenses and entertainment at a private residence. The limit does not need to include event expenses (e.g., parking, venue rental, invitations, etc.). Units will not be required to get a per person cost when there is a negotiated agreement with a vendor for a total package price that includes food and non-food expenses (e.g., venue rental, etc.). If units are using multiple vendors, then the per person limit applies.
2. Gratuities are allowed within reasonable limits. Gratuities should not exceed 20% of the pre-tax subtotal or the rate mandated by the venue/restaurant (if applicable). An explanation must be provided in the payment voucher if tips exceed this amount.
3. If paid with personal funds, reimbursement of sales tax on meals at restaurants, delivery from restaurants, or carry-out food from restaurants is allowable from institutional funds and should be calculated as part of the per person limit noted above. See Appendix A for more information on state sales tax and mixed beverage sales tax.

b) Flowers – Expenses for flowers (fruit or similar item may be substituted) for an individual, that are not part of a university event, may not exceed $200, including taxes and delivery fees.

c) Alcohol – Expenses for alcohol may not be the primary expenditure, that is, greater than the total food expense. This limit applies to all entertainment expenses except those related to talent recruitment (faculty and staff) and the development of donor relations. See Section 5.1.k. for additional requirements for all events that serve alcohol. Note: If multiple payment documents are submitted for the same event and alcohol is paid separately, then a copy of all backup documentation related to the event must be included to verify alcohol expense is not greater than food expense.

4.3. Exceptions.

Exceptions to the amounts outlined in 4.2.a and 4.2.b require approval by the dean or vice president, or their official delegate. Exceptions to 4.2.c require justification documented on the voucher and approval by the dean or vice president, or their official delegate. Exceptions for the deans, vice presidents, the executive vice president and provost, the senior vice president and chief financial officer, and the president require additional higher-level approval. Refer to section 6.2.a. below for the approval hierarchy.

Sec. 5 Guidelines on Entertainment Expenses and Other Uses of Institutional/Gift Funds

5.1 Allowable Expenses.

Expenses from institutional or gift funds must be deemed appropriate in the best judgment of the approving authority, be cost effective, and serve a clear university business purpose. Generally, entertainment expenditures include food and beverages, facility rentals, flowers, invitations, and other similar expenses, and should be related to one or more of the following purposes:

• Recognition or promotion of academic achievement, athletic achievement, scholarship, and/or service to the institution
• Promotion or communication of intellectual ideas and/or exchange of administrative and operational information of the institution’s programs or activities
• Support of institution-sponsored student events and activities
• Recruitment of students, faculty, and staff
• Unit or department morale building events (does not include individual awards)
• Assistance to The University of Texas Regents, accrediting agencies, officials from other institutions, etc.
• Support of a program of continuing education

a) Official Occasions. An “official occasion” is a reception, luncheon, dinner, or similar event that is sponsored and funded by The University of Texas at Austin and is often hosted by an administrative officer. These functions are normally associated with special programs, university guests, faculty, and staff recruitment. Examples include conferences, workshops, seminars, development events (e.g., donor receptions, fundraising activities, etc.), planned retreats, unit or department morale building events, and other similar activities.

b) Administrative/Business Meetings and Business Meals. When meetings (e.g., department retreat, training event, staff meeting, Staff Council events, etc.) of two or more UT Austin employees are held, or when a UT Austin employee attends an external meeting or formal training, the cost of meals or light refreshments may be reimbursed only if the following three criteria are met:

1. The meeting is agenda driven and directly concerned with the business of the university.
2. The meal or light refreshment is an integral part of the meeting, not a matter of personal convenience.
3. The meeting could not otherwise be scheduled outside of a regular meal time.

c) On-the-job Meals. The University may provide meals to certain employees during work hours when the employees are required to be at their work locations during a normal meal time (e.g., the employee needs to be on-call for emergencies during the meal period). These meals can also be provided when requirements necessitate that meals be provided as a condition of the employee's appointment. Meals provided to employees to improve morale or goodwill are not 'on-the-job meals'. In order to be reimbursed for an on-the-job meal, all of the following criteria must be met:

1. The meal must be approved by an authorized approver (see Sec. 6.2.).
2. The meal must be taken at the employee's work location during the employee’s working hours.
3. The meal must be reasonable in value and not provided on a regular or frequent basis.
4. The meal cannot include alcoholic beverages.

d) Club Memberships. Club memberships are allowed if they pertain to the person's job duties and benefit the university. Faculty and staff may be reimbursed for these expenses, or the vendor may be paid directly. An approval letter for the social club membership signed by the current dean, vice president, provost, or president is required. Academic staff must have social club memberships approved by the appropriate dean, and administrative staff must have them approved by the President's Office. Signatures from official delegates will not be accepted for social club dues. Dues for deans or vice presidents require approval from the Provost’s or President’s Office.

Social Club Membership Approval Letter Sample for Academic Departments approved by Dean*

Social Club Membership Approval Letter Sample for Deans approved by Provost*

Social Club Membership Approval Letter Sample for Administrative Departments and Vice Presidents approved by President*

A club membership used for personal benefit will be prorated based on personal use. The prorated amount will be added to the employee’s taxable income reported on IRS Form W-2. Any personal charges incurred at a club should be paid by the employee.

e) Departmental Beverages. Expenses for coffee, tea, bottled water, soda, and related supplies used in departments may be purchased for the consumption of departmental visitors and employees.

f) Flowers. Flowers may be purchased for memorial services or extended illnesses of an employee, an employee’s family, or a retiree. Family is defined as the employee’s spouse, as well as children, parents, brothers, sisters, grandparents, great-grandparents, and grandchildren of the employee or the employee’s spouse, and must be sent in the name of the department or office. Costs for flowers for an individual should not exceed the amount listed in Section 4.2. Flowers may be paid by reimbursement to the purchaser or by direct payment to the florist. Departments should collaborate with other campus units to minimize the duplication of sending flowers to a single recipient (i.e., four departments sending congratulatory flowers or sending multiple arrangements for funerals). Flower purchases made in the name of the university are exempt from Texas Sales Tax. Purchasers can find University tax-exempt information on the Texas Sales Tax Exempt Information page. Flowers may also be purchased for other occasions that serve a bona fide business purpose of UT Austin, such as event décor.

g) Holiday Functions. Annually, executive officers/department heads may host a holiday event for their own departments.

h) Holiday Greeting Cards/Invitations. 

1. In the event that a department or office chooses to send holiday greeting cards to customers and constituents unique to that office, such cards must be issued in the name of the department or office. Cards are not to be sent to other departments or offices within the university. Exceptions exist for certain functional areas within the university where the majority of employees office outside Austin, Texas.
2. Invitations may only be issued by administrative officers; normally the president, a vice president, dean of a college or school, or the administrative equivalent. Invitations should clearly indicate that the event is a university function.

i) Retirement Gifts. University of Texas at Austin funds may not be used for a retirement gift that would be taxable to the recipient. This includes a gift of cash, a cash equivalent, a gift card or certificate, bonds, and securities.

See the HBP 9.1.8. for more information on retirement gift merchandise limits.

j) Companion of a university guest or of the university host. Companion expenses are generally not reimbursed unless they serve a bona fide business purpose (e.g., companion expenses are for receptions, development, distinguished visitors/lecturers, or recruitment purposes). To request reimbursement for a companion, a business purpose for the companion’s attendance must be documented, including how their attendance is compliant with Sec. 5.1. The companion of a university host may only be reimbursed if the guest also brings a companion.

k) Alcohol. The following guidelines must be followed for all entertainment expenses that include alcohol, including those related to talent recruitment (faculty and staff) and development-donor relations.

Advance approval by an approved delegate is required to serve alcohol in campus facilities, including leased spaces, per the Board of Regents’ Rule 80102 (Alcoholic Beverages). This approval must be submitted with the Official Occasion Expense Form (OOEF). Vouchers will be rejected if a delegate’s prior approval has not been obtained.  For more information, refer to the Request to Serve Alcoholic Beverages at an Event on Campus page.

Food (i.e., meals, hors d’oeuvres, or refreshments) must be served at all events that include alcohol. Per best practice, events that include alcohol should be held outside of normal business hours (8:00 a.m. to 5:00 p.m. local time, Monday through Friday).

The university highly discourages serving alcohol at events at which undergraduate students will be present. Should undergraduates attend such an event, the university requires that a TABC-licensed caterer/bartender be used.

In addition, when serving alcohol at a non-licensed venue including private residence, the following must be observed:

1. All pertinent laws, regent rules, and university policy regarding alcoholic beverages must be observed.
2. It is advisable for an individual that is licensed by the Texas Alcoholic Beverage Commission (TABC) to serve the alcohol.
3. The area where the alcohol is being served should be monitored to ensure that only invited guests participate in the event.

5.2 Nonallowable Expenses.

a) Social Employees Meals. Reimbursement will not be allowed when two or more employees choose to have a meal together or conduct business as an incidental part of the meal or when the meeting could have been scheduled during regular working hours.

Sec. 6 Procedures

6.1 Responsibilities.

a) Senior Vice President and Chief Financial Officer (CFO). The CFO officially interprets this policy and is responsible for revising it as necessary to meet the changing needs of the university and statutory requirements.

b) Deans and Vice Presidents. Deans and Vice Presidents, through their Chief Business Officer or equivalent authority, are responsible for ensuring that entertainment and other expenses conform to the requirements of this policy and that claims submitted for payment or reimbursement include the appropriate supporting documentation (i.e., detailed, itemized receipts for meal expenses). The Dean or Vice President is responsible for restricting reimbursements to allowable expenses and occasions and for ensuring that expenses incurred are appropriate to the fund source.

c) Accounts Payable (AP). AP is responsible for ensuring that payment or reimbursement requests submitted by departments contain the approval of an authorized approver, for reviewing all supporting documentation to verify that the amounts are accurate and that the appropriate funds are charged, and for questioning those requests that do not appear to be in accordance with this policy. In addition, AP is responsible for ensuring that supporting documentation is retained in accordance with the university’s records retention schedule and for updating accounts as appropriate. AP will also monitor the 60-day window for timely submission of reimbursement requests. Reimbursement requests submitted more than 60 days after the expense, if approved for reimbursement, will be treated as taxable income. An explanation for the delay in submission will be required.

d) Employee. Each employee is responsible for submitting a request for reimbursement or payment of expenses, with itemized receipts, through their departmental routing processes, ensuring approval through their Dean or Vice President or their delegate. The request for reimbursement or payment must be submitted to AP within 60 days of the expense in order to remain non-taxable.

e) The President and Provost. The President and Provost are responsible for approving club memberships for executive officers in advance. 

6.2 Required Approval of Expenses.

a) Approving Authority. An individual may not approve their own entertainment expenses, regardless of if the payment is by reimbursement or direct payment to the vendor, nor can they approve the entertainment expenses of a person to whom they directly report.

Authorized approvers for reimbursement of entertainment expenses are as follows:

1. Oversight of entertainment expenditures totaling less than or equal to $5,000 is required at the unit’s administrative level, i.e., by the unit head, department chair, or director or their authorized delegate. Unit heads, department chairs or directors can authorize up to one individual as their delegate. Delegates must hold a higher-level administrative position.
2. Oversight of entertainment expenditures totaling over $5,000 is required at the senior administrative level, i.e., by vice presidents and deans or their authorized delegates. Authorized delegates include the CBO or Council of University Business Officer (CUBO) member in the vice president’s or dean’s office plus up to two additional delegates. Delegates must hold a higher-level administrative position. It is recommended that delegates are in the CBO’s or CUBO member’s office.
3. To ensure timely processing of requests, any changes in delegation must be provided to Accounts Payable. Contact Accounts Payable for documentation required for vice presidents and deans to delegate authority to official delegates.

b) Expenses Requiring Additional Approval. Vice president or dean approval of entertainment expenses is required under the following circumstances:

1. If an individual is requesting an exception to the amounts outlined in Sec 4.2 Maximum Permitted Amounts. The vice president’s or dean’s authorized delegates can approve these exceptions.
2. If the vice president’s or dean’s authorized delegate is being reimbursed for the event. This approval cannot be delegated.

When the authorized approver is hosting or being reimbursed for an event, the person to whom the authorized approver reports (or a higher officer) must approve the expense or reimbursement.

1. Department Chairs and Directors: Expenditures and exceptions for department chairs or directors must be approved by the dean or vice president or their assigned delegates.
2. Deans: Expenditures and exceptions for deans must be approved by the Executive Vice President and Provost or their assigned delegates.
3. Provost and CFO: Expenditures and exceptions for the Executive Vice President and Provost and the Senior Vice President and Chief Financial Officer must be approved by the President or their assigned delegates.
4. President and Vice Presidents: Expenditures and exceptions for the President and vice presidents must be approved by the Senior Vice President and Chief Financial Officer or their assigned delegates.
5. University-hosted: Expenditures and exceptions for university-wide events (i.e., University Events and Experience) must be approved by the Vice President for Development or their assigned delegates.
6. Authority has been delegated by the President to Payment Services in the Office of the Senior Vice President and Chief Financial Officer to review and grant final approval for all entertainment expenses.

For more information on the routing of entertainment expenses, please refer to the chart below:

Entertainment and Official Occasion Expenditure Approval Chart

c) Required Approvals for Expenses from Institutional/Gift Funds. Approval at the appropriate level must be obtained for all expenses.

6.3 Funding Sources/Limitations.

a) Gift and Endowed Funds. Gift and endowed funds that contain restrictions may be used for entertainment expenses only if the purpose is in compliance with the terms of the gift or endowment. Care must be taken to ensure that the use of gift funds does not violate the donor’s restrictions, if any, and the donor’s intent. Some expenses in this policy require payment by gift or endowed funds only.

b) Institutional Funds. Funds specifically budgeted for official occasions and funded by institutional funds must be used for entertainment or expenses.

c) State Funds. State funds (14- and 20-accounts), including available university funds (AUF) and tuition, may not be used for entertainment expenses or other expenses covered by this policy.

d) Indirect Cost. Indirect Cost (19-accounts) may not be used for entertainment expenses or other expenses covered by this policy.

e) Service Center Funds. Service Center Funds (18-accounts) may not be used for entertainment expenses or other expenses covered by this policy.

f) Auxiliary Funds. Auxiliary Enterprises Funds (29-accounts) may be used in conjunction with specific programs and activities if appropriate.

g) Designated Funds. Designated funds (other than student fee, flat rate tuition, and indirect cost funded 19-accounts) may be used in conjunction with specific programs and activities if appropriate. Student Fee and Flat Rate Tuition funded accounts have additional limitations in use. These funds must be used to support student academic services, events, or materials. Meals and refreshments are not allowed except for events in support of student and/or academic services where the majority of the attendees are students.

h) Limitations Concerning Alcoholic Beverages.

1. Institutional funds may be used for alcoholic beverages that are included with a meal and that are purchased and consumed in a business establishment as part of business entertainment.
2. Payment for alcoholic beverages that are purchased and consumed in a business establishment as part of business entertainment, but that are not part of a meal, must be from gift or endowed funds only.
3. Alcohol purchases are never allowed on any account involving student fees or flat rate tuition.
4. Pursuant to Article III of the Texas Appropriations Bill, all alcohol purchases for entertainment and official occasions related to Intercollegiate Athletics must be entirely processed, approved, and purchased using Gift funds under the control of the Vice President.

i) For a complete list of the account types that are allowed for entertainment expenses, please refer to the chart below:

Entertainment and Official Occasion Expenditure Policy Chart

6.4 Taxable Income.

Under IRS regulations, an entertainment expense is taxable income to an employee if the activity is not directly related to the employee’s job, is lavish or extravagant, the official host (or another employee) is not present at the entertainment activity, or the expense is not substantiated with supporting documentation.

6.5 Direct Payment to Vendor.

In accordance with the Prompt Payment Act, payment for goods and services must be submitted within 30 days of either the receipt of goods or services or of the receipt of the invoice for the goods or services (whichever date is later). If a request is received after 30 days, employees who request reimbursement of expenses are required to submit a written statement explaining the reasons for the delay. Late reimbursement requests will require additional levels of approval and may be disallowed entirely or reported as taxable income to the payee.

To issue a direct payment to a vendor for an entertainment expense, the expense must be in accordance with this policy and must be appropriately documented with supporting documentation and itemized receipts.

Sec. 7 University-Wide Official Occasions

7.1 Definition.

University-wide events are large-scale, high-profile community events managed by University Events and Experience that may require numerous vendors and expenditures. Examples include, but are not limited to:

• Gone to Texas
• Commencement
• Honors Day
• UT Remembers
• Ball on the Mall
• Longhorn Halloween
• SXSW
• Pop-up events
• Forty Acres Scholars luncheon
• Advisory Council meetings in accordance with UT System policy

The Vice President for Development or their delegate (i.e., the Chief Business Officer or Chief Experience Officer) holds the authority to decide what constitutes a university-wide event.

7.2 Maximus Permitted Amounts.

University-wide events that have received budgetary pre-approval from the Vice President for Development or their delegate are exempt from following the maximum permitted amounts outlined in Sec. 4.2. However, in accordance with IRS policy, event and meal expenses should not be lavish or extravagant. An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances.

A budget pre-approval memo for university-wide events will be submitted to Accounts Payable at the start of each academic year by the Vice President for Development or their delegate using the following template. The University Development Office will keep a copy of the approval on file.

UEE University-Wide Event Approval Sample Memo for Approval by VPD

Definitions

Entertainment - expenditures on food or beverages and related services (e.g., facility rentals, equipment rentals, decorations, flowers, invitations, and other similar expenses) incurred that were directly related to, or associated with, the conduct of official university business usually involving guests external to the university. Examples include meals, a buffet line, sandwich line, heavy hors d’oeuvres, or similar fare served in connection with a reception, luncheon, dinner, or conference. Such expenses must be deemed appropriate in the best judgment of the approving authority, be cost effective, within budget authority, and serve a clear business purpose for The University of Texas at Austin.

Development/Donor Relations – the process of building and maintaining relationships with donors to foster long-term engagement and investment with the university. It involves a variety of activities, including but not limited to acquiring donors, retaining donors, and engaging donors. Entertainment expenses that involve current UT Austin employees or currently enrolled students as the “donor” do not meet the definition of development-donor relations in this policy.

Gift Funds or Endowed Funds - institutional funds paid from an account beginning with “30” and a report code of GFT and END. There are a limited number of 30 accounts that are local funds. These accounts may not be used for entertainment expenses unless the purpose is in compliance with the terms of the gift.

Institutional Funds - for purposes of this policy, institutional funds (sometimes referred to as “local funds”) are defined as non-state, gift, endowed, service center, or agency funds.

Light Refreshments - nonalcoholic drinks and edible items commonly served between meals, but not intended to substitute for meals, such as tea, coffee, soda, bottled water, doughnuts, cookies, fruit, or similar items. A buffet line, sandwich line, heavy hors d’oeuvres, or similar fare is not considered to be light refreshments.

State Funds - funds paid from any account beginning with “14,” “20,” or “19” tuition accounts. These funds are appropriated by the General Appropriations Act or the Texas Constitution.

Supporting Documents and Attachments

Appendix A - Voucher Requirements for Payment(s) and/or Reimbursement(s) for Entertainment Expenses

Official Occasion Expense Form (OOEF)

To access the archived version of the previous HBP 9.1.1 policy, click here. Please note that this document is intended solely for reference during Phase II of the policy transition and will be removed after August 31, 2025.

Part 9. Expenditure Procedures - Table of Contents