Hospitality expenses must be directly related to, or associated with, the active conduct of official CSU business. When an employee acts as an official host, the occasion must, in the best judgment of the approving authority, serve a clear CSU business purpose, with no personal benefit derived by the official host or other employees. In addition, the expenditure of funds for hospitality should be cost effective and in accordance with the best use of public funds.

Specifically, employee business meal or entertainment expenses must conform to IRS regulations. No employee business meal or entertainment expenditure that is considered taxable income under IRS regulations will be reimbursed or paid (See Tax Guideline link below). An employer's reimbursement of an employee business meal or entertainment expense may be considered taxable income to an employee if:

• The activity is not directly related to the employee's job.
• The expense is lavish or extravagant under the circumstances.
• The expense is not substantiated with supporting documentation.

When determining whether a hospitality expense is appropriate, the approving authority must evaluate the importance of the event in terms of the costs that will be incurred, the benefits to be derived from such an expense, the availability of funds, and any alternatives that would be equally effective in accomplishing the desired objectives. Following are examples of occasions when the provision of hospitality is permitted when:

• The CSU hosts or sponsors business meetings that are directly concerned with the welfare of the CSU;
• The CSU hosts official guests, including employees visiting from another work location, students, donors, visitors, volunteers and other individuals with an interest in the CSU;
• The CSU is the host or sponsor of a meeting of a learned society or professional organization;
• The CSU hosts: receptions held in connection with conferences, meetings of a learned society or professional organization, meetings of student organizations and groups, student events such as commencement exercises, and events or meetings of other CSU related groups such as alumni associations;
• The CSU hosts community relations or fundraising events to promote goodwill, recognize distinguished service, or cultivate donors;
• The CSU hosts receptions for the benefit of employee morale, employee recognition, length of service awards, or retirement presentations;
• Representatives of the CSU participate in community outreach to enhance partnerships, promote goodwill, recognize distinguished service, or cultivate donors.

Employee Meetings and Recognition Events - (see Definitions for further clarification)

Meals or light refreshments provided to employees may be permitted if the expenses occur infrequently and are reasonable and appropriate to the business purpose. Meals or light refreshments provided to employees on a frequent or routine basis are considered taxable income by the IRS and are therefore not permitted under this policy.

• Meals or light refreshments should be limited to no more than twelve times per year, per group.
• Meals or light refreshments provided to a group should be counted on an event basis, e.g., a two-day meeting should be counted as one event in determining compliance with these guidelines.

Meals or light refreshments provided in the course of a business meeting must be modest and reasonably priced. When a meeting takes place over an extended period of time and the agenda includes a working meal, there may be justification that the meal is integral to the business function, examples include:

• A meeting where there is a scheduled speaker during the meal period;
• A meeting where the participants work through the meal period;
• Circumstances where it would be too time-consuming or disruptive for participants to take a meal break away from the meeting location.

Campus procedures should identify authorization and documentation requirements as well as a maximum per person rate for breakfast, lunch, dinner and light refreshments inclusive of the total cost of food, beverages, labor, sales tax, delivery fees or other service fees. The maximum rates should be reviewed annual by the Chief Financial Officer. High level authorized authorities at the Vice Chancellor/Vice President level or above may approve limited exceptions to the maximum per person rate with a documented explanation.

Spouses and Domestic Partners

Hospitality provided to the spouse or domestic partner of an employee may be permitted when it serves a CSU business purpose. Such an individual's presence is considered to serve a CSU business purpose if he or she has a significant role in the proceedings or makes an important contribution to the success of the event. Official functions to which spouses or domestic partners are invited as a matter of protocol or tradition such as ceremonial functions, fundraising events, alumni gatherings, athletic games, and community events may be considered business related. An agenda, invitation or similar documentation should be included with the payment record.

Students and Prospective Students

Hospitality provided to students or prospective students may be permitted when it serves a CSU business purpose. Permissible activities may include recruitment efforts, student activities, student programs, student organization events, student recognition events and commencements. Students may be hosted to attend fundraising and other community relations events that enhance their learning experience, in recognition of their student achievement, to engage with alumni and donors, or as representatives of elected student leadership. Hospitality provided to student athletes and recruits must be in accordance with the rules, regulations, guidelines, standards and procedures of the inercollegiate athletic association's national governing board; e.g., National Collegiate Athletic Assocation.