FN10 Other Business Expenses and Activities
Policy Status:Under Review>
Subject Matter Expert:
Policy Steward:Associate Vice President for Budget and Finance>
NOTE: The implementation of SIMBA requires the evaluation of all University Financial Policies and Guidelines. After consultation with key constituencies, work will be underway to update, consolidate, and improve our policies to better serve you. Please be aware that due to volume, all policies may not be updated to reflect changes which have been communicated; however, policies will be updated with appropriate and applicable effective dates. Thank you for your patience as we work through this process.
- UNIVERSITY-SPONSORED EVENTS (GROUP MEALS/MEETINGS, ALCOHOLIC BEVERAGES, ENTERTAINMENT):
- GIFTS AND AWARDS (INCLUDING CHARITABLE CONTRIBUTIONS, SUPPORT TO STUDENT GROUPS, AND MEMORIALS):
- Taxability and Reporting of Gifts and Awards:
- Gifts and Awards to Outside Guests, Donors and Friends of Penn State:
- Gifts and Awards to Students:
- Gifts and Awards to Employees:
- Memorials or Tributes:
- Support to Recognized Student Organizations:
- Charitable Contributions and Fundraising Events for Non-University Entities:
- OTHER EXPENSES:
- ADDENDUM: RISK MANAGEMENT GUIDELINES FOR EVENTS:
- SANCTIONS AND NON-COMPLIANCE:
- FURTHER INFORMATION:
- CROSS REFERENCES:
- REVISION HISTORY:
- Alcoholic Beverages – Beer, wine, liquor or any other drinks that are considered “alcoholic beverages” by the Pennsylvania Liquor Control Board (PLCB).
- Awards - merit recognition of notable achievement, including retirement. Door prizes and other prizes are awards for purposes of this policy.
- Gifts - tokens of appreciation or consolation.
- Licensed Public Venues – University-owned, occupied or leased property licensed by the PLCB as a “public venue.” These include the Bryce Jordan Center (BJC), Beaver Stadium, Pegula Ice Arena, and any other University location approved by the University’s Board of Trustees and licensed by the PLCB as a “public venue.”
- Public Event – Any event at a Licensed Public Venue at which alcoholic beverages are sold to the general public.
- University Property – all property owned, occupied, or leased by The Pennsylvania State University
- University-Sponsored Event – an event, function or activity for which University funds are paying all or a portion of the cost of the event sponsored by the University or a University department, organization, or group. For purposes of this policy, a University-Sponsored Event does not include a Public Event.
This policy applies to all Penn State campuses, colleges, departments, or units conducting business in the name of The Pennsylvania State University. This policy also applies to anyone who approves or processes such business transactions. This policy does not apply to events held by University faculty, staff or students if no University funds are expended in support of the event. Penn State Health and The Pennsylvania College of Technology, each having separate policies, are thereby exempt from the requirements of this policy.
Budget executives and administrators are stewards of the financial accounts under their authority, and have a responsibility to assure that all financial transactions posted to these accounts are appropriate and reasonable, based on various criteria:
- The transactions support or advance the unit's mission and goals
- The transactions are aligned with budget priorities
- The transactions are compliant with legal requirements and stakeholder expectations
Budget executives and administrators are accountable for judgments and decisions made regarding expenditures on accounts for which they are responsible. The Financial Officer is responsible for assuring the transaction is compliant with University policy and procedure, especially to assure compliance with external laws and regulations.
Policy regarding expenditures will vary based on the source of funds for the account:
- General funds -- Justifiable to students, parents, taxpayers, and legislators - and reasonable from their viewpoints.
- Grants/Contracts (Restricted) -- Compliance with specific sponsor requirements and reasonable based on the purpose for which funds were provided.
- Endowments and Gifts (Restricted) -- Compliance with the letter and spirit of donor guidelines and commensurate with the goals for which the funds were given.
- Unrestricted donor funds -- Justifiable to donors who have entrusted funds to discretion of executive and administrators and reasonable given other needs these funds could satisfy.
Accountability reporting related to any of the expenditures under this policy may be implemented at the discretion of senior management. If such reporting is instituted, time frames, parameters and format will be coordinated through the Financial Officers.
UNIVERSITY-SPONSORED EVENTS (GROUP MEALS/MEETINGS, ALCOHOLIC BEVERAGES, ENTERTAINMENT):
In the conduct of business, the University sponsors many events, including group meals, meetings, conferences, retreats and receptions. A University-Sponsored Event is one for which University funds are paying all or a portion of the cost of the event.
Expenditures Related to Events:
This portion of the policy does not apply to the University's sale of Alcoholic Beverages pursuant to a liquor license from the Pennsylvania Liquor Control Board (PLCB); however, if an academic or administrative unit of the University is hosting guests at an event at one of the Licensed Premises or Licensed Public Venues, that unit's purchase of Alcoholic Beverages is covered by these rules.
The Serving of Alcoholic Beverages at a University-Sponsored Event is an important decision within the context of the stewardship of University funds. Alcoholic Beverages may only be paid from limited sources of funding (see more detail below). Choosing to serve Alcoholic Beverages paid for by the University reduces the funding available from these sources for other University and departmental priorities.
See detail below on Events Involving Guest and Donors, Events Involving Students, and Events Involving Employees for specific restrictions. In general, Alcoholic Beverages paid for by the University are permitted at events with guests and donors but are not permitted for student events unless approved prior to the event and are not permitted for employee only events unless the event is hosted and attended by the unit executive (i.e., the applicable Dean, Chancellor, or Vice President).
The provision or serving of Alcoholic Beverages at all University-Sponsored Events must comply with the following rules:
- Non-alcoholic beverage alternatives must be available. (This applies even if University funds are not used to purchase Alcoholic Beverages.) All non-alcoholic beverages must comply with the University's contract with its beverage provider (see Policy AD26 Sale and Serving of Food and Beverages at University Locations).
- Alcoholic Beverages should not be served or ordered prior to 3:00 P.M. on a business day (Monday – Friday).
- Costs for Alcoholic Beverages should not exceed an average of 2 drinks or $25 per person.
- Top shelf beverages and premium wines are rarely appropriate on University funds.
- Kegs of beer are never permitted at events on University property.
- Costs for Alcoholic Beverages and related serving costs may only be paid with unrestricted donor funds or restricted funds which specifically permit the purchase of Alcoholic Beverages. These costs may not be paid with endowment funds unless specifically permitted by the guidelines and are not permitted to be paid with miscellaneous research funds.
- If the event is being held at an on-campus location other than one of the Licensed Premises, permission must be granted to possess/use Alcoholic Beverages on Penn State property per the provisions of University Policy AD18 Possession, Use, and Distribution of Alcoholic Beverages.
- Serving of Alcoholic Beverages must comply with University Risk Management guidelines (See Addendum, below) to assure the safety of those attending, even if the Alcoholic Beverages are not purchased with University funds.
The University assumes no responsibility for any liability of any nature arising from the possession, use, distribution, and/or sale of alcoholic beverages on University property or at any University-Sponsored Event pursuant to any permission for such use, possession, distribution and/or sale granted by the University under Policy AD18 Possession, Use, and Distribution of Alcoholic Beverages. Any person, not in the course of the University employment, receiving permission or approval under Policy AD18 Possession, Use, and Distribution of Alcoholic Beverages to possess, use, distribute, or sell alcoholic beverages on University property or at any University-Sponsored Event shall indemnify and hold harmless the University from any liability, damage, or claim, including counsel fees, arising from such possession, use, distribution and/or sale, pursuant to a written agreement in form and substance satisfactory to the Risk Management Office.
At certain University-Sponsored Events, entertainment may be appropriate. All such costs must be expensed to unrestricted donor funds.
Entertainment which showcases Penn State is preferred, either through student groups or University athletic or artistic events. Tickets for admission to such events must be paid for on unrestricted donor funds. Tickets for intercollegiate athletic events must be purchased through the approved procedures established by the University. In certain cases, Policy AD75 University Events and Ticket Accountability, will apply.
Flowers and Other Decorations:
Flowers and other decorative items purchased for University events involving University guests (such as table centerpieces) are permitted but must be paid on unrestricted donor funds. The one exception permitted on general funds is flowers for commencement exercises.
Procurement and Documentation:
For events where costs are expected to exceed $10,000, a purchase order should be prepared to procure the event. For events less than $10,000, a purchasing card or Special Request for Check may be used, but detailed receipts are required, as well as reporting on those in attendance. All contracts for facility agreements, meals, or catering must be forwarded to either Purchasing (events over $10,000 on a purchase order) or to Risk Management for signature by an authorized University representative (see Policy FN11 Contracts and Leases).
Events which are catered by an outside food service provider must comply with University Policy AD26 Sale and Serving of Food and Beverages at University Locations. All caterers providing service to Penn State must have adequate liability insurance coverage. A list of caterers meeting these requirements is available through Risk Management.
Events Involving Guests and Donors:
Group meals, meetings, or other events which focus on external guests or donors are permitted, but within the following policy parameters:
- Events focused on networking, recruiting, and professional meetings are permitted on general funds, and restricted funds if permitted by the guidelines or regulations for the account. Events with a development or fundraising purpose must be charged to a development account (general or unrestricted). Events with a primarily social purpose must be paid on unrestricted donor funds.
- Cost per person for food, facility or equipment rentals, and other expenses related to the event (excluding alcoholic beverages and entertainment) cannot exceed the per diem amount at the location, if charged to general funds. If cost exceeds per diem, the difference must be charged to unrestricted donor funds.
- Alcoholic beverages and entertainment are permitted at these events, subject to the general provisions above.
- Spouses and partners of employees are permitted at these events, but all costs related to spouses and partners must be paid on unrestricted donor funds. For purposes of this policy, spouses, partners and children of employees are not considered guests.
- Children are permitted, but should be invited only when their presence will not detract from the business purpose of the event. The hosts must assure that there is proper supervision, as needed, to assure the safety of younger guests. If children are in attendance, serving of alcoholic beverages is discouraged. All costs related to the attendance of children must be paid on unrestricted donor funds.
Events Involving Students:
Meals, meetings, and other events which include students, both graduate and undergraduate, are permitted and encouraged as part of student engagement. General funds may be used as the source of funding if the event has a clear educational or academic purpose and a faculty or staff representative will be present, or if the event falls under student affairs or activity programming. Unrestricted donor funds must be used for all other events, including those for social purposes and meals provided for regular class sessions.
- Alcoholic beverages may only be served at events involving students if approved prior to the event, and must comply with the general provisions for alcoholic beverages listed above. Alcoholic beverages are never permitted as a cost of recruiting students. The following approvals are required:
- Graduate Students: Budget Executive
- Undergraduate Students: Vice President for Student Affairs
- Entertainment at events involving students must follow the provisions above.
- Spouses, partners and children of students may be included in social events, as appropriate, with supervision provided for younger children to assure safety.
Events Involving Employees:
Events at which only faculty, staff, post-docs, fellows, and graduate assistants are in attendance are permitted, but must be reasonable. Only events which have a clear business purpose, including meals between two (2) or more employees, are permitted on general funds (up to the per diem limit for the location). All other events, including social events, must be paid on unrestricted donor funds and approved by the budget executive.
STANDING EXCEPTION: Each administrative area may hold two (2) social events per year which can be charged to general funds, to encourage networking within units as well as employee morale. These events would include a welcoming event at the start of the new academic year and a holiday event. Spouses and children may be included in these events, and for these two (2) events only, can be charged to general funds. If spouses/partners and/or children are included in other events, including at the departmental level, all costs related to the inclusion of spouses/partners and/or children must be paid on unrestricted donor funds.
All events involving employees must be reasonable in terms of cost and no more than the daily per diem for the location at which the event is held. The per diem per person includes all costs for food, facility rental, and entertainment. Costs per person exceeding this amount will be subject to post-audit review and may be considered personal costs for the host if found to be unreasonable or excessive.
Alcoholic beverages are discouraged at employee events and should be considered a personal expense if offered (i.e., available through a cash bar or paid by host). Even if provided at no cost to the University, the Risk Management Guidelines for Events: Alcoholic Beverages should be followed.
Alcoholic beverages may be provided at employee events and paid from unrestricted gift funds ONLY when the event is sponsored and attended by the President of the University, The Executive Vice President and Provost, Vice Presidents, Vice Provosts, Deans, other executives (with approval of The Executive Vice President and Provost) or Chancellors (with the approval of the VP for Commonwealth Campuses) for the unit. The cost of alcoholic beverages should be within the per diem limit at which the event is held.
Serving of alcoholic beverages must be appropriate based on the business purposes of the event and use of unrestricted gift funds for this purpose should be vetted against other potential uses of those funds in meeting unit priorities. Group meetings where only alcoholic beverages are consumed are highly discouraged and alcoholic beverages are never permitted to be served prior to 3 pm on a business day.
Purchase of alcoholic beverages and related costs at employee only group meals/events which are not sponsored as noted above, will be considered a personal expense and will not be reimbursed or permitted as an expenditure against any University funds. Spouses/partners, children, University retirees, post-docs, fellows, graduate assistants, and Penn State students cannot be considered University guests for purposes of this guideline.
GIFTS AND AWARDS (INCLUDING CHARITABLE CONTRIBUTIONS, SUPPORT TO STUDENT GROUPS, AND MEMORIALS):
Recognizing individuals and organizations for achievement, service to the University and appreciation of their contributions to the University community are appropriate in certain cases but must recognize the source of funds to determine if such gifts or awards are appropriate. Generally, gifts to employees are not permitted and no gifts or awards are permitted to be paid on federal or state grants or contracts. Gift and endowment funds may only be used as a source if permitted by the guidelines or gift purpose.
Gifts are tokens of appreciation or consolation, while awards are given in merit recognition of notable achievement, including retirement. Door prizes and other prizes are awards for purposes of this policy.
Payments to participants in research studies, including surveys, are not considered gifts or awards. These are addressed in Research Protections Guideline RPG03 - Payments to Human Participants in Research.
Taxability and Reporting of Gifts and Awards:
Cash gifts and awards, including gift certificates, are taxable to the recipient, no matter what the source of funds or the dollar amount. All non-cash gifts and awards purchased with University funds or donated to the University are taxable to the recipient, but only need to be reported if valued at $100.00 or more. All reportable taxable gifts and awards must be reported to Payroll/Accounting Operations for appropriate reporting. Following is an overview of taxable and reportable gifts and awards:
|REPORTABLE AMOUNT||TAXABLE?||SUBMIT TO:|
|Non-Cash||$100 or more||Yes*||Payroll|
|AWARD||REPORTABLE AMOUNT||TAXABLE?||SUBMIT TO:|
|Cash||$100 or more||Yes||Accounting Operations|
|Non-Cash||$100 or more||Yes||Accounting Operations|
* The only non-taxable exceptions are awards to employees for length of service (i.e., 25-year chairs - see Policy HR49 Twenty-five Year Service Award Program) or for safety. Also see Policy FNG04 Employee Reward and Recognition Programs.
Financial Officers should assure that award recipients are properly notified of taxability. Employees will have the value of the award and applicable taxes withheld through the payroll system. Non-employees should be notified based on the following:
The Tax Code provides that prizes and awards are taxable and requires the University to report the value given where the recipient receives more than $600 during any calendar year. To ensure compliance with its reporting obligations, the University requires the recipient of any prize or award valued at an amount of at least $100 to provide his or her name, address and social security number before winnings can be claimed.
Gifts and Awards to Outside Guests, Donors, and Friends of Penn State:
Gifts and awards are appropriate to recognize those who support the University. Gifts and awards are permitted for these individuals or organizations, but must be paid on unrestricted donor funds, or funds designated for such a purpose. These are never permitted on federal or state contracts or grants.
Flowers and plants may be given as gifts to non-employees but must be purchased on unrestricted donor funds, or funds which specifically allow for such purchases.
Gifts and Awards to Students:
Gifts and awards to students are generally permitted. Scholarships are not covered under this policy, with an exception to endowed/non-endowed scholarship sources used for student research and student travel expenditures. Scholarships are addressed in University Policy FN09 Scholarships. The following are the parameters under which gifts and awards other than scholarships may be given:
- Non-Cash Awards
- Non-cash awards for academic, artistic or athletic achievement, such as trophies, medallions or plaques, are permitted on general funds if the cost is $425 or less per award.
- Non-cash awards valued over $425 and any cash awards must be paid on unrestricted donor funds or funds designated for the purpose of student awards. The award should be reasonable in relation to the achievement.
- All non-cash awards valued at $425 or more must be entered into the student system for reporting purposes.
- For Student Financial System reporting, gift certificates and gift cards to a specific vendor are considered non-cash awards.
- Non-cash gifts or awards related to competitions, contests and other incentives, including door prizes, must be paid on unrestricted donor funds or funds designated for that purpose.
- Cash Awards
- All cash awards must be paid on unrestricted donor funds or funds designated for the purpose of student awards. The award should be reasonable in relation to the achievement.
- All cash gifts and awards to students MUST be entered and disbursed through the student system in compliance with financial aid regulations.
Travel or research support may also be provided to students and may be considered a scholarship or award. There are three (3) ways to provide travel or research support to students:
- If the University pays all costs for travel or research directly to a third party, it does not have to be entered into the Student Financial Aid system through the Student Financial System.
- If a student personally pays for travel or research expenses and receives reimbursement for these expenses, then it does not have to be entered into the Student Financial Aid system. For research expenses paid by the student, a Special Request for Check (SRFC) can be processed to reimburse the student. Travel should be reimbursed through the Employee Reimbursement System (ERS) as a non-employee travel reimbursement following standard travel procedures. An SRFC should not be used for reimbursing travel expenses and all University Travel policies apply to travel reimbursements.
- If the research or travel support is granted directly to the student, this can be treated as a scholarship/award to the student and, in that case, would be entered into the Student Financial Aid system through the Student Financial System. This method of reimbursement should be employed only if direct payment of expenses or reimbursement to the student is not appropriate.
If a student is directly reimbursed, or if the University pays for the travel or research directly, there should be no adjustment to the student's cost of attendance in the Student Financial Aid system. The source of funds to be used to support student travel or research is dependent on the purposes of the travel or research. The Financial Officer should be consulted to determine the appropriate source of funds.
Gifts and Awards to Employees:
These are generally not permitted, except for the following:
- Formally-established “Employee Reward and Recognition Programs” falling within University Guideline FNG04 Employee Reward and Recognition Programs, allowable on general funds up to $100. Rewards and recognitions not falling under FNG04 are limited to $50; amounts over $50 must be charged to unrestricted donor funds.
- Employee morale or event incentives, if approved by the budget executive. These incentives must be justifiable and reasonable to outside constituents and should be infrequently given. These are payable on general funds if $50 or less per employee; those over $50 must be paid on unrestricted donor funds.
- Clothing items, such as shirts, which will be used for identification purposes at events or for other business purposes, are permissible on general funds, but must cost less than $100 per person. Items which cost more than $100 must be paid fully on unrestricted donor funds. The expectation is that this will be an infrequent expense.
Gifts for birthdays, holidays (including Boss’ Day or Administrative Professional's Day) and other personal events are not permitted from any source of funds. These would be considered personal expenses for supervisors or others who wish to recognize such events for their employees or colleagues.
Memorials or Tributes:
The passing of employees, students, and friends of the University are events which should be recognized by the University through an act of condolence. The following are guidelines to be followed:
- Units are encouraged to solicit contributions among employees for memorials and tributes rather than using University funds
- General funds may be used for memorials or tributes only for current employees and students
- $75 safe harbor for general funds
- Each unit should develop guidelines to assure consistent treatment for current employees and students
- Single gift from unit – floral arrangement
- In-lieu of flower donations permissible if prescribed by the family, but must be made to a tax-exempt entity
- Unrestricted donor funds may be used, with approval of the budget executive, for memorials for family members of employees, donors and other friends of Penn State.
University memorial service costs are permitted if approved by the budget executive of the unit but must be reasonable based on the impact of the employee or student and would generally be expected to be hosted on campus with any costs paid on unrestricted donor funds.
Support to Recognize Student Organizations:
University departments may provide financial support for Recognized Student Organizations. General funds may only be used when the event or activity being supported or co-sponsored has a clear educational purpose; otherwise, unrestricted funds must be used. University departments cannot provide funding to student groups which are not Recognized Student Organizations.
University departments are not permitted to give Recognized Student Organizations equipment, furniture, computers or other items. If these items are no longer needed, normal disposition procedures must be followed. Recognized Student Organizations would be able to purchase such items through Lion Surplus.
Charitable Contributions and Fundraising Events for Non-University Entities:
Direct contributions or donations from general funds of the University for any purpose are not permitted. However, in certain instances, it may be in the best interest of the University to make donations directly to select organizations or to be represented at non-University fund-raising events. Reimbursement for direct donations, or expenses incurred in attending such events, will be treated as an exception (although general funds are not to be used as the source for reimbursement). The request for reimbursement must be submitted to the budget executive of the administrative unit, accompanied by a written justification that indicates that such direct donation or attendance is of significant benefit to the University and its off-campus relations.
The purchase of tickets for raffles or other small games of chance are prohibited expenditures from any funds received and/or administered by the University, regardless of the source of funds. Under no circumstances may contributions or donations be made, directly or indirectly, to a political party, a political candidate or an elected official from any funds received and/or administered by the University, regardless of the source of such funds. Purchase of sponsorships, advertising or other promotional items related to a non-University fundraising event or charitable promotion may be permitted on general funds if the cost is comparable to other promotional costs and is charged to a marketing or promotions account. Otherwise, unrestricted donor funds must be used as the source of funding.
NOTE: University entities are not permitted to conduct raffles to raise funds. University-affiliated groups, such as alumni groups or advisory boards, are also restricted from conducting raffles if any University funds are involved; this includes if the group's funds are held in a University bank account. Recognized student organizations may conduct raffles in accordance with provisions outlined in "Policies and Rules for Recognized Student Organizations."
There are numerous other expenses which may or may not be appropriate expenditures from University funds:
For purchases of furniture and office décor, a purchase order or purchasing card shall be utilized in accordance with University Policies BS09 Initiating Purchases from Vendors Outside the University and BS14 Penn State Purchasing Card.
Standard office furniture, including traditional, standing, and adjustable height desks, files, tables and chairs are permitted to be paid on general funds, if the cost of the furniture is reasonable. Alternative work station equipment, such as treadmill desks, may not be purchased on general funds. Purchase of this equipment is only permitted on unrestricted gift funds and MUST be approved by the Budget Executive.
The cost of moving office or lab equipment for faculty or staff are considered a business expense and as such are not eligible for relocation expense payment. See Policy HR104 – Payment for Relocation Expenses for full details.
Office Decor (including Plant Maintenance Costs):
- Public areas: Permitted on general funds. A public area is defined as rooms/areas that outside visitors or prospective students/parents frequent on a regular basis.
- Non-Public areas: Permitted on unrestricted donor funds.
- Private Offices: This is considered a personal expense and is not reimbursable from University funds; however if the private office is used for recruiting or development purposes, it may be considered a public area with the approval of the administrative officer of the unit.
- All items purchased as office decor with University funds are considered University property and must remain with the unit making the purchase.
- Decorations related to specific holidays are not permitted expenditures from any University funds, with the exception of limited decorations for the December holiday season in public areas, paid from unrestricted donor funds upon approval of the administrative office of the unit.
Office Food and Drink Service:
- Refrigerators, microwaves and other appliances (including basic coffee machines) purchased for the benefit of all employees in a work unit or area are permissible expenditures on general funds if approved by the budget executive.
- Cappuccino (or any other specialty coffee machines) are not permitted to be purchased from any University funds. Coffee supplies for guests can be purchased on general funds, but not supplies exclusively for employee use, except as part of beverage service for authorized group meetings or meals.
- Purchase of beverages for employees, such as soda or juice, is only permitted from general funds for authorized group meetings or meals. All beverage purchases must comply with the University's contract for beverage services, including water. It is recommended that purchases of beverages for authorized group meetings or meals be through CAMPUS Catering or for bottled water, from General Stores, to assure compliance with the University’s beverage contracts.
- Water purification devices or services, including bottled water service, are not permitted expenditures from any funds of the University, with the exception of water filtering or purification devices required for research purposes. Exceptions may be granted due to non-potable water at a location; these must be approved by the Associate Vice President for Budget and Finance in consultation with the Office of Environmental Health and Safety.
Licenses and Certifications:
Licenses or certifications which are a requirement to be qualified for the position are not permitted expenditures from University funds and are considered a personal expense. However, continuing education required to maintain the license may be paid for by the department if deemed appropriate to the individual's professional development. Licenses and certifications which are not required to be qualified for the position, but which are necessary to perform the work and are of benefit to the University, such as licensing for pesticide application or for food safety requirements, may be paid for by the University, at the discretion of the department.
Theft or Loss of Personal Property:
The University will not reimburse faculty, staff, students or guests for personal property lost, stolen or damaged on University property or elsewhere while on University-affiliated travel. Individuals are encouraged to maintain adequate personal insurance to cover any such loss.
ADDENDUM: RISK MANAGEMENT GUIDELINES FOR EVENTS:
Events at Personal Residences:
Group meals or meetings held at private residences are not covered by University insurance, except for Deans, Chancellors, Vice Presidents, Vice Provosts and other specifically designated senior executives. The use of a caterer is not required for events at an employee's home. However, if a caterer is used, the caterer must be from the List of Caterers maintained by Risk Management, having adequate insurance coverage. The employee should be aware that their personal homeowner's policy would be the primary liability insurance coverage for these events, given that the host held the event at their home and was responsible for controlling the circumstances of the event.
As noted in this policy, the provision of alcoholic beverages at University-funded or sponsored events holds increased potential for liability. To request permission to possess/use alcoholic beverages for activities on the property of The Pennsylvania State University per the provisions of Policy AD18 Possession, Use, and Distribution of Alcoholic Beverages, a Permission to Possess/Use Alcoholic Beverages Form must be completed and forwarded to Risk Management for final approval prior to any University-sponsored or funded event. The following are requirements which must be met for all University-funded or sponsored events which include the serving of alcoholic beverages, even if provided through a cash bar, or paid by an outside sponsor or individual.
If the event is held at an established hotel, restaurant or other facility:
Bartender services must be provided by the facility. All agreements must be reviewed and sent to Risk Management to process for the authorized University signature, as required by Policy FN11 Contracts and Leases.
If the event is being held at a personal residence or a facility which does not offer catering or bartending services (such as a community center, outdoor venue or on University premises):
- If a caterer is used and will provide and/or serve the alcohol, then the caterer must have appropriate liquor liability insurance, even if the caterer is not supplying the alcoholic beverages.
- Only caterers listed by Risk Management as having liquor liability coverage for the date of the event may be used for such events. A listing of approved caterers is available on the Risk Management web page.
- Not all approved caterers on this list have liquor liability coverage. Only those marked “YES” by “Liquor Liability” have evidenced sufficient coverage to the Risk Management Office.
- If a caterer is used, but does not supply or serve the alcoholic beverages, liquor liability insurance is not required. However, the department is responsible to procure a certified bartender to serve any alcoholic beverages provided.
- A bartender is considered certified when they have been credentialed as "Responsible Alcohol Management Program" (RAMP) Certified in the state of Pennsylvania. When using a certified bartender, proof of their certification must be sent with the Permission to Possess/Use Alcoholic Beverages Form to the Risk Management Office.
- RAMP training information is available on the Pennsylvania Liquor Control Board's website. NOTE: Penn state Hospitality Services no longer provides this type of training.
- When considering using a certified bartender rather than a caterer to serve alcohol the following applies:
- It is strongly preferred to use Penn State Hospitality Services or a certified bartender who has liquor liability insurance in an amount not less than $1,000,000 with the University named as an additional insured. Insurance certificates from the certified bartender must be sent to the Risk Management Office for approval.
- If Penn State Hospitality Services is not available and you are unable to arrange for a certified bartender with the required liquor liability insurance, then it is allowable to use an employee who qualifies as a certified bartender for the event.
- Penn State will not reimburse for the cost of RAMP training, except for those employees where it is a job requirement. Costs for bartending services must also be charged to unrestricted donor funds.
- As a last resort, it is allowable to have a certified bartender who is not a University employee serve the alcohol, but the administrative area is responsible for any liability arising from the provision of alcoholic beverages at the event.
- Exception: If the only alcoholic beverage being served is one glass of wine during a meal, or if 20 people or less are attending, no bartender is required. However, the host is responsible for any liability arising from the provision of alcoholic beverages at the event.
Alcoholic Beverage Sales Restrictions:
On University-owned property affiliated with the University Park Campus (including Rock Springs, Stone Valley and other facilities), for events which otherwise qualify to include alcoholic beverages under this Policy and AD18 Possession, Use, and Distribution of Alcoholic Beverages, sponsoring units may utilize Penn State Hospitality Services, as the liquor licensee, to either provide a cash bar or to provide alcoholic beverages to the sponsoring unit for a charge. No other liquor licensee will be permitted to sell alcoholic beverages on University property. This paragraph only applies to licensees selling alcoholic beverages at an event on University property or charging the unit for alcohol purchased by the licensee. It does not prohibit Campus Catering or independent caterers from serving alcohol purchased by the unit sponsoring the event.
At all other University locations, units may host events which otherwise qualify to include alcoholic beverages by this policy and Policy AD18 Possession, Use, and Distribution of Alcoholic Beverages, at which a licensee supplies alcoholic beverages through a cash bar or charges the sponsoring unit. Any such licensee must submit to a pre-approval process through Risk Management, which includes signing an agreement with the University in advance of any event.
SANCTIONS AND NON-COMPLIANCE:
Persons, organizations, or groups possessing, using, distributing, or selling Alcoholic Beverages in violation of Policy AD18 Possession, Use, and Distribution of Alcoholic Beverages and this policy, or in violation of the laws of the Commonwealth of Pennsylvania, will be referred to the appropriate administrative disciplinary mechanism and/or law enforcement officials.
The Office of the Senior Vice President for Finance and Business is responsible for the administration of enforcement.
For questions, additional detail, or to request changes to this policy, please contact your Financial Officer.
Policy AD18 Possession, Use and Distribution and Sale of Alcoholic Beverages.
Policy AD26 Sale of Food and Beverages at University Locations
Policy AD27 Commercial Sales Activities at University Locations
Policy AD75 University Events and Ticket Accountability
Policy BS09 Initiating Purchases from Vendors Outside the University
Policy BS14 Penn State Purchasing Card
Policy FN11 Contracts and Leases
Policy HR104 Payment for Relocation Expenses
Policy Guideline FNG04 Employee Reward and Recognition Programs
Policy Guideline RPG03 Payments to Human Participants in Research
Policies and Rules for Recognized Student Organizations
Employee Reimbursement System (ERS)
Pennsylvania Liquor Control Board
Permission to Possess/Use Alcoholic Beverages Form
Serving of Alcoholic Beverage at a University-Sponsored Event
- February 15, 2023 - Editorial changes - changed all references to the Associate Vice President for Finance and Corporate Controller to Associate Vice President for Budget and Finance, per the directive of the Senior Vice President for Finance and Business.
- September 16, 2019 - edits to remove "TIPS" training verbiage from Alcohol sections and to increase the Non-Cash Awards for Students from $100 to $425 in accordance with NCAA policy. JAVA Catering was replaced with Campus Catering.
- November 8, 2018 - Subject Matter Expert added.
- September 13, 2018 - Editorial changes to update the Cross References section and to remove redundant;Date Approved, Date Published, and Effective Date information.
- July 31, 2017 - edits to the "Alcoholic Beverages" portion of the UNIVERSITY SPONSORED EVENTS section, in conjunction with changes to policy AD18 Possession, Use and Distribution and Sale of Alcoholic Beverages.
- February 3, 2016 - In the OTHER EXPENSES section, the addition of a subsection entitled Theft or Loss of Personal Property to specify the University's position regarding personal property lost, stolen or damaged on University property or elsewhere while on University-affiliated travel.
- November 9, 2015 - Editorial change in the GIFTS AND AWARDS section under "Gifts and Awards to Employees" increasing the amount permitted for clothing items from $50 to $100.
- May 27, 2015 - Editorial change in the GIFTS AND AWARDS section under "Gifts and Awards to Students" to clarify processing as it pertains to travel or research support to students.
- March 30, 2015 - Editorial change in the UNIVERSITY-SPONSORED EVENTS (GROUP MEALS/MEETINGS, ALCOHOLIC BEVERAGES, ENTERTAINMENT) section under "Alcoholic Beverages" (3rd paragraph; added a new bullet) to provide additional guidance for the serving of alcoholic beverages at University events, as it pertains to alcoholic beverages being ordered/served at, or prior to, 3:00 P.M.
- February 24, 2015 - Editorial change. A link to the newly created Alcoholic Beverages Decision Tree was added to the UNIVERSITY-SPONSORED EVENTS (GROUP MEALS/MEETINGS, ALCOHOLIC BEVERAGES, ENTERTAINMENT) section under "Alcoholic Beverages" to provide additional guidance for the serving of alcoholic beverages at University events.
- August 18, 2014 - Major edits made throughout the entire policy. Edits have been made throughout the UNIVERSITY-SPONSORED EVENTS section: Events Related to Events and Events Involving Employees, to clarify acceptable practices and parameters for such events. Updates to the GIFT AND AWARD section: specifically, Gifts and Awards to Students, clarifying the three ways to provide travel support to students; Support to Student Groups was renamed Support to Recognized Student Organizations, and verbiage edited to clarify process. In OTHER EXPENSES, Office Furniture was added as a category, and parameters were clarified for the purchase of furniture beyond standard office furniture. All sections of the ADDENDUM: RISK MANAGEMENT GUIDELINES FOR EVENTS, were updated to reflect current operations.
- September 25, 2013 - Editorial changes. Addition of policy steward information, in the event that there are questions or requests for changes to the policy.
- September 7, 2011 - Verbiage added to the Alcoholic Beverages section of ADDENDUM: RISK MANAGEMENT GUIDELINES FOR EVENTS (last 2 paragraphs) to reflect changes to the PLCB law (effective July 27, 2011) which now permit liquor licensees to sell alcohol off their premises.
- January 19, 2011 - Add-back of the section entitled "Support To Student Groups" (previously removed) to clarify the parameters by which University departments may provide support to student groups. Additionally, a note has been added to the section entitled "Charitable Contribution and Fundraising Events for Non-University Entities," clarifying that University entities may NOT conduct raffles, restricting such practices by University-affiliated groups if any University funds are involved, and defining the parameters by which recognized student organizations may conduct raffles.
- August 5, 2010 - Editorial change; "Serv-Safe Alcohol Training" added to the Alcoholic Beverages section of ADDENDUM: RISK MANAGEMENT GUIDELINES FOR EVENTS as another acceptable certification for bartenders serving alcohol at events covered by this policy.
- January 15, 2010 -Revisions in OTHER EXPENSES, specifically in the section entitled "Office Food and Drink Service," to clarify the types of allowable and unallowable expenditures.
- April 29, 2009 - Revised "Gift and Awards to Students," to better explain handling when giving cash awards or non-cash awards.
- April 1, 2009 - Major rewrite of the policy, which incorporates the concepts of accountability and stewardship discussed with the Academic Leadership Council and President’s Council in 2008.
- April 03, 2007 - Major changes to all sections of the policy. "Bottled Water" section removed; "Gifts" and "Awards" sections combined. New section added, entitled "Support To Student Groups."
- October 18, 2002 - When reporting group meal expenses, the use of a title of the committee or group in lieu of individual names is valid only for groups exceeding 12 individuals. Individual names must always be provided for groups of 12 or less, and the names and affiliation of all non-employee guests regardless of the size of the group. When the title of the committee or group is used in lieu of individual names, the Financial Officer reserves the right to clarify the identity of attendees before approving the group meal expense.
- May 9, 2002 - Editorial changes: in light of the provisions for group meals/meetings and the Group Meal Support Form, clarified that a receipt detailing the alcoholic beverages is always required.
- May 22, 2001 -
- Under the Group Meeting/Group Meal Expenses section, clarified the condition under which spousal expenses are permitted.
- Under the Gifts section, added a provision to allow budget executives to distribute holiday greeting cards if approved by the Provost.
- Under the Awards section, added a link to policy guideline FNG04.
- January 24, 2000 - Substantial changes; policy rewritten.
- January 13, 1993 - Added a section on Alcoholic Beverages and a section on Nittany Lion Inn group meetings and meals.
- June 11, 1991 -
- Advance approval of the appropriate budget administrator or budget executive is required prior to an event being scheduled.
- Expenses for spouses of University employees are not approved from general Funds.
- The costs incurred for group meetings/meals must be prudent, reasonable, and in the best interest of the University.
- Introduced the form "Request for Reimbursement of a Group Meal."
- Prohibited raffles.
- Changed the purchase of flowers to also include lease/rental.
- August 31, 1989 - Under the Group Meeting Expenses section, indicated that the policy applied regardless of the source of funds.
- April 10, 1989 - New Policy - chiefly from old policy TR7 and an August 1, 1960 policy titled Reimbursable Entertainment Expenses.
Date Approved:March 13, 2016>
Date Published:August 2, 2017>