ARCHIVED Bulletin: Provost Issues Business Meal Expense Guidance (Posted October 22, 2007)




Date:           October 22, 2007

To:               Department Chairs
                    Members of the University Management Group

From:          John Etchemendy, Provost

Subject:      Business Meal Expense Guidance


Dear Colleagues,

I write to inform you of recently issued guidance on expenses for Business Meals. The guidance is attached to this message and is also available online at: It will also soon be referred to in Administrative Guide Memo 36.4 on "Reimbursement of Expenses."

Most of you are prudent when spending University funds and comply with all of our policies. So I am not writing to you because we have uncovered rampant problems on campus. Still, we spend well over $20 million annually on Food, Entertainment and Employee Morale unrelated to travel. Most of these expenses are justifiable business expenses. Furthermore, in the context of the University's budget and the number of people we have on campus, the total amount spent is not unreasonable. But there are individual expenses that do push the envelope of what is reasonable, and we occasionally have to turn reimbursement requests down. As you can imagine, this is not pleasant either for us or for the person requesting reimbursement.

Recently, there has been increased scrutiny of not-for-profit institutions and their use of the funds entrusted to them. The IRS prohibits the tax-free treatment of lavish or extravagant meals or entertainment for any type of business. Under IRS rules, excessive expenses can lead to tax penalties, additional taxable income to the employee, and/or required reimbursement to the institution. Internal Audit and the Controller's Office continue to review expenditures with these rules in mind and have noted a number of examples where people could have been more prudent in their meal and entertainment expenses. In addition we have found that there is confusion about what constitutes a "reasonable expense." What one person thinks is reasonable, another believes is extravagant. Many of the staff who process or approve reimbursements have asked for help in determining what constitutes a reasonable expense. The attached memo is intended to provide guidance on what is reasonable within the broad array of events and situations that occur on campus.

This memorandum has been discussed with and endorsed by all of the school deans. I am sending it to you with the request that you share it with all of the faculty and staff in your departments.

Please encourage your staff to raise any questions they have or issues that they encounter. For questions about specific transactions contact Customer Outreach in the Disbursements Department at 5-9100.


With best wishes,



cc: University Cabinet


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