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Approval Authority: CONTROLLER
Responsible Executive: CONTROLLER
Responsible Office: OFFICE of FINANCE
Originally Issued: February 16, 2006
Revisions/Updates: November 22, 2006
- Policy Statement
The commitment of Stevens Institute of Technology funds should be carefully reviewed to ensure that business expenses are reasonable, necessary, and appropriate, and incurred in the performance of Institute business. - Reason/Purpose for Policy
The primary revenue sources for Stevens are students, donors, and research sponsors, therefore employees must be sensitive and prudent on how funds are used to promote the Institute’s mission, and further program goals and objectives. The Business Expense Policy is intended to provide faculty and staff a guide to making decisions as to whether the expense represents a reasonable, necessary, and appropriate use of Stevens’ funds. It is also intended to ensure Stevens maintains an Accountable Plan for Internal Revenue Services (IRS) purposes. - Who Should Read Policy or Policy Applies To:
This policy applies to all Stevens’ faculty and staff. - Related Documents
Accounts Payable procedures
Procurement Policy
Travel Policy
Petty cash policy - Contacts
- Accounts Payable
- Controller
- The Policy
Faculty and staff may be reimbursed, (including/excluding sales tax) for pre-authorized purchases of goods and services up to $250 with the submission of an itemized receipt attached to an approved Travel and Business Expense Report. (TABER) As with travel expenses, TABERS submitted for reimbursements of business expenses MAY NOT be approved by the reimbursee. Also, TABERS with expenses submitted beyond 6 months after the date of the expenses WILL NOT be processed. Under normal circumstances these expenses would be covered through use of the Corporate Purchasing Card or Corporate Card. Expenditure and reimbursement of personal funds should always be a last resort for business expenses. The following are guidelines to be followed by Stevens’ faculty and staff members who are responsible for authorizing and approving these expenditures. The list is intended to exemplify business expenses that are appropriate and allowable, and identify those that are not. While the allowable list is not all inclusive, the examples convey the concept of reasonableness. - Accountable Plan
In order to exclude business expense reimbursements from employee income, the Institute must maintain an "accountable plan" for employee business expenses. Expenses not meeting all three of the below conditions may be taxable to the employee and therefore subject to W-2 reporting. Under Internal Revenue Service (IRS) regulations for an accountable plan, expenses are required to meet the following three conditions:
- There must be a business connection and only for business expenses that are ordinary and necessary in the performance of duties as an employee.
- All business expenses must be substantiated with the date, amount, place, and business purpose of the expense being submitted to the employer within a reasonable time period. Specific documentation requirements are noted throughout the policy.
- Employees are required to return all amounts in excess of substantiated expenses.
- Tax-exempt status
Stevens is a tax-exempt organization and individuals should request that taxes not be collected. Unfortunately, the travel industry (e.g., airlines, rail, hotel, car rental, restaurants) frequently will not recognize this status and insist that taxes be paid. In these instances, the employee will be reimbursed for the taxes paid. If the supplier requests a tax-exemption document, a tax exemption letter can be obtained from the Controller or the Purchasing Office. - Allowable business expenses
Travel For reimbursable and non-reimbursable expenses related to travel, including transportation, lodging, meals (in travel status), etc., see Travel Policy at www.stevens.edu/fd/policies. Business Meals The Institute will reimburse a business meal expense when it is deemed to be necessary, reasonable, and appropriate by a dean, director, department head or designee. Reimbursement of meals will occur when they are an integral part of the business meeting or activity, NOT as a matter of personal convenience. The receipts must be original and itemized and include the provider’s name and date, the name(s) of any other person included on the bill, and the purpose of the meeting. The receipt must indicate that the bill was paid. Credit card receipts alone are not acceptable since they do not provide the itemized receipt. When payment is made by credit card, a copy of the credit card receipt should be attached to the itemized receipt. To determine whether a business meal expense is appropriate, the individual seeking reimbursement should first consult with his or her supervisor. The supervisor should exercise professional judgment in determining whether:
- The topic of discussion (meeting) or activity of the meeting warrants the use of Institute funds for the meal expense.
- The benefit derived from incurring the expense is the most effective, efficient, and productive use of Institute resources.
- The funds are available.
Meals for employees only are generally not allowable unless it is the only possible or practical time for such a group to gather due to schedules. Employee only meals may also be appropriate when employees are required by supervisors to work well beyond their normal work schedules. These expenses are at the discretion of the Dean, Director or Department Head. Employee Recognition and Morale Reasonable expenses incurred for employee recognition and morale activities may be reimbursed. This would include reimbursement for food and related expenses for events such as birthdays, holiday parties, births, and farewell and retirement parties. Institute funds for flowers or other suitable remembrances are permissible in the event of death, as defined in the Human Resources policy. Use of departmental funds for gifts for farewell and retirement parties should depend on length of service and contribution to Stevens, and normally should supplement personal contributions. In no instances may such expenses be allocated to any contract, grant, or state funding source. Telephone calls Long distance phone charges incurred on a personal home phone or cellular phone in conducting Institute business may be reimbursed. Copies of the bill showing the charges must be attached along with an explanation of the business purpose of each call for which reimbursement is being requested. This reimbursement policy does not extend to individuals who have Institute-supplied cell phones. Conference/Registration fees The Institute will reimburse employees for approved conference or professional meeting registration fees. Preferably, this expense is paid via a check request or Institute Procurement Card, however, employees have the option of paying the fee with personal funds and being reimbursed. A receipted bill or registration confirmation with the fee noted and a copy of the fee sheet detailing the conference itinerary (or brochure) are required to substantiate the business purpose, the time period of the trip and the amenities provided by the conference or meeting. Association Dues Professional association dues should generally be paid through a check request, however in the event they are paid through personal funds, they are a reimbursable expense at the discretion of the Dean, Director, or Department Head. The individual must show that the association and its activities are related to the individual’s position at Stevens. Association dues are normally non-reimbursable on contract and grant funds. Subscriptions Subscriptions to periodicals should generally be paid through a check request, however in the event they are paid through personal funds, they are a reimbursable expense. The subscription must have a business relevance to the individual’s position at Stevens and the delivery address should be the individual’s office or department. Subsciptions are normally non-reimbursable on contract and grant funds. - Unallowable expenses
There are certain expenses, because of the nature of the expense, which may never, under any circumstances, be bought with personal funds and reimbursed. Those included in this category are:
Business Expenses Consultant Services
Plant Expenditures
Capitalized Equipment
Computer equipment (excluding accessories) Alcohol Alcohol expenses within reason in the course of an official Institute reception are an acceptable business expense. In addition, alcohol is a reimbursable expense in rare circumstances, such as entertaining a donor, or a potential corporate liaison. All expenditures of alcohol should be pre-authorized by the appropriate dean, director or department head. However, these expenses must be segregated in the appropriate account object code in the accounting system. When incurred, this expense is not allocable to any federal or state funding source. When alcohol is served at an official Institute reception, care must be exercised to comply with the requirements of Drug Free Schools and Communitis Act (in development).
Office hospitality Coffee and water services provided for the benefit of employees may be purchased at the discretion of the Dean, Director, or Department head at reasonable expense. Food and snacks are not appropriate business expenses. - Personal Expenses
Personal and unrelated business expenses are not reimbursable at any time. If an expense does not fall into a category above, or an individual is unsure of its appropriateness, the answers to the following questions will provide a guide.
- Is it the right thing to do?
- Do your actions CLEARLY comply with applicable restrictions (donor, sponsor, IRS, SIT)?
- Is this something your administrative assistant, friends, family, and Stevens’ students would clearly see as a Steven’s business expense?
- Is it true, there would be no cause for concern if you read about this in the Stute? The Chronicle of Higher Education? The Wall Street Journal?
- If the answer to any one of the questions is “No”, the individual should consult with the Office of Finance before submitting the expense for reimbursement.
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