University of Minnesota  Administrative Policy

Hospitality and Entertainment of Non-Employees

Policy Statement

Hospitality and entertainment expenses occur only when non-employees are present and integral to the purpose of the event. Hospitality and entertainment of non-employees includes donor and alumni relations and recruitment of students, faculty or staff, visiting lecturers, representatives of research organizations, visitors from other universities, guests invited to assist in the development of new programs (unpaid consultants), and business and community leaders. 

Employees who incur or approve expenses for hospitality, alcoholic beverages, entertainment, and other special expenses must exercise prudent judgment to ensure that the expenses are for legitimate University business and comply with the Expense Allowability Grid (PDF), regardless of funding source.

If a proposed expenditure is not specifically addressed in the Expense Allowability Grid, it may still be allowable. In those cases, the following principles should guide employee decision-making in conjunction with the unit’s Chief Financial Manager:

  • The expenses must be reasonable, allowable, and allocable under governing laws, regulations, and University policy;
  • The purpose for the expenses must directly support the University’s mission of teaching, research, and outreach; and
  • The expenses may not create, maintain, or increase the value of a personal asset, or be personal in nature.

Campuses, colleges, and vice presidential units may interpret and apply this policy more restrictively where budget, reputation, prior patterns of behavior, or other risk factors are a consideration. Campuses, colleges, and vice presidential units are not allowed to establish their own separate policies in lieu of this University-wide policy.

Exceptions should be infrequent and must route through the unit’s Chief Financial Manager and if needed, must be escalated to the University Controller for final approval. If an exception is determined to be unallowable, the expense may not be reimbursed. 

Activities or events that are attended by only University faculty and staff, should refer to Administrative Policy: Business Expenses.

External research sponsors may have more or less restrictive rules than the University. Hospitality and entertainment expenses on sponsored funds should follow the most restrictive applicable policy (University policy or sponsor rules). However, if the sponsor has given prior written approval, expenses generally not allowed on non-sponsored funds may be allowed on sponsored funds.

Hospitality and entertainment expenses are typically unallowable on sponsored projects. "Unallowable" expenditures for Sponsored Projects include (applicable account codes in parentheses):

  • Advertising to promote University products or services (720701)
  • Alcoholic beverages (720702)
  • Entertainment (720703)

See also Examples of Unallowable Costs for a complete list of these types of expenditures.

Documentation/Reimbursement Request

All hospitality and entertainment expenses must be documented to include:

  • The purpose of the meeting or event
  • Location and date
  • Number and type (alumni, donor, etc.) of attendees
  • The expected cost of the meal per planned number of attendees

Employees must provide all requested justification and documentation for hospitality and entertainment expenses within 60 days of incurring the expense. Employees must process expenses incurred near the end of the fiscal year in accordance with the year-end accounting calendar or before the end date of the grant, depending on which deadline is sooner to ensure reporting in the correct accounting period.

Campuses, colleges, and vice presidential units may receive requests not meeting the requirements for documenting and requesting reimbursements in a timely manner. Hospitality and entertainment expense reimbursement requests which are not adequately documented in accordance with Administrative Policy: Processing, Documenting, and Approving Financial and Accounting Transactions, or are not submitted within 60 days, should be denied. In rare circumstances, there may be reimbursements which cannot meet the requirements for adequate documentation or submission within 60 days, due to legitimate extenuating circumstances which impaired  employee from meeting the requirements. In those situations, after consultation between the employee's unit and the Chief Financial Manager for the campus, college, or vice presidential unit, the reimbursement may be approved, and the rationale for determining that the circumstances warranted approving the request must be documented.

Spending Limits

Dollar limits within the Expense Allowability Grid include all associated charges (food, beverages, taxes, tips, etc.), excluding room rental fees. Total expenses must be calculated based on the planned number of attendees and must be well documented in advance, despite actual attendance. 

Meal limits (per meal event) for hospitality and entertainment of non-employees must not exceed $100 per attendee.  Exceptions must route through the unit’s Chief Financial Manager. Chief Financial Managers may approve exceptions up to 10% over the $100 threshold, all other exceptions must be escalated to the University Controller for final approval.

Meals for individuals invited as visitors to contribute to the intellectual life of the university community are allowable. Normally such visitors will deliver a seminar, colloquium talk, or other lecture (or performance in the case of creative activity) for the benefit of the University faculty, staff and/or students.  The number of University faculty, staff and/or students accompanying a visitor for a meal should be no more than four or be commensurate with the purpose of the meal and/or networking opportunity expected from attending. 

Budgets for special events that have extraordinary significance and importance to the University’s mission with set up fees and other associated costs may be reviewed and approved by the Chief Financial Manager prior to the event. Any events that are held at an individual’s home must follow the policy and applicable limits.

Expenses for Alcoholic Beverages

Expenses for the purchase, use or consumption of alcoholic beverages are permitted under the following conditions:

  • The activity or event for which the expense is incurred must have a legitimate University business purpose (e.g., faculty recruitment or donor relations activities)
  • The alcoholic beverages should be moderately priced and paid for with University non-sponsored private funds only, and they must be allowable on the intended source of funds. See Chart of Accounts, Fund
  • The expenditure and the circumstances for the consumption of alcoholic beverages must not jeopardize the University’s reputation, or the health and welfare of those involved.

Alcoholic beverage sales and/or service on University owned or operated property by University and non-University entities is covered in Administrative Policy: Alcoholic Beverage Sales and Service and Venue Liquor Licensing.

Activities or events where alcohol will be served and are attended by only University faculty and staff, must refer to Administrative Policy: Business Expenses.


Tips should not exceed 20%.

  • In some cases, tips on meals may exceed 20% when there is an automatic gratuity charged for a large group.
  • Tips on delivery of items such as food, flowers, etc. should be reasonable, and in most cases should be less than 20%. Delivery and services charges should be deducted when tips are calculated.
  • Tips may be rounded up to the nearest whole dollar.

Hospitality and Entertainment Expenses Incurred While Traveling

This policy also applies to employees incurring hospitality or entertainment expenses while traveling on University business. Due to the higher expense limits for certain hospitality and entertainment expenses, employees may not use this policy to circumvent travel per diem limits. Employees are assumed to be in “travel” status for purposes of reimbursement unless a clear case for hospitality status can be made. Employees cannot be reimbursed for both a hospitality meal and the per diem for the same meal. See Administrative Policy: Traveling on University Business.

Applicability of this Policy to Students

If meetings or events include both students and employees, and are for the purpose of student recruitment, this policy must be followed. Students are not required to be part of one of the formal groups listed below in order for this policy to apply.  See also Special Situations for Intercollegiate Athletics.

Student Groups

Campus Life Programs

Campus Life Program (CLP) groups must follow all University policies.  As a part of a University    department, CLP’s may occasionally raise funds for charitable organizations or activities and must use the appropriate accounting procedures required by the University or the University of Minnesota Foundation.

Registered Student Organizations

Registered Student Organization (RSO) groups must follow all University policies.  As a separate legal entity from the University, these groups may occasionally raise funds for charitable organizations or activities based on the specific legal status of the organization and should follow any registered student group process in doing so on campus.  The University of Minnesota Foundation does not accept gifts for RSO’s.

Special Situations for Intercollegiate Athletics (all campuses)

All situations and expenses must follow NCAA Rules.

  • Food/meal expenses for student athletes are exempt from this policy.
  • Events that include student athletes, student recruits and their parents, and University staff who may be in attendance are considered recruiting events and must follow the limits set in this policy. Occasionally family members of University staff may also be present at these events and with proper justification their expenses would also be allowable.
  • Recruiting, student athlete team building, and personal development expenses, other than meals, may be based on industry standards and departmental funding capacity.
  • Student athlete only events (the non-food/meal portion) must follow the engagement/recognition section of Administrative Policy: Business Expenses.

Reason for Policy

To comply with federal and state law, to comply with Internal Revenue Service guidance regarding expense reimbursements made pursuant to “accountable plans”, and to satisfy restrictions imposed by funding agencies. As a public institution, the University must demonstrate appropriate use of funds entrusted to it by various constituencies and assure that expenses do not personally benefit University employees.


Primary Contact(s)Beth Tapp612-624-5255[email protected]
Exception ApprovalsMollie Viola612-625-0126[email protected]
Allowable CostsFinancial Helpline612-624-1617 [email protected]
Taxability of Employee Recognition AwardsTax Management Office612-624-1053[email protected]
Reporting Taxable AwardsHuman Resources Helpline (4-UOHR)612-624-8647 (4-UOHR) 
Greater Minnesota: 1-800-756-2363
Responsible Individuals
Responsible Officer Policy Owner Primary Contact
  • Controller
  • Director of Purchasing Services
  • Beth Tapp
    Director of Purchasing Services


Fund Types for funds included in definition. See Expense Allowability Grid (PDF) for Expense Allowability by Expenditure Type.


The amount of expense for goods or services which can be charged to (or allocated to) a particular unit, activity or function because the goods or services provide a commensurate benefit to that unit, activity or function.


An expense is allowable when it is acceptable to charge it to a particular source of funds. Expenses may be deemed allowable by law or regulation; by external parties such as donors or sponsors; or by the University, when the financial or reputational risk associated with a particular expense falls within the University’s tolerance level.

De Minimis Fringe Benefit

For tax purposes, a de minimis fringe benefit qualifying for tax-free treatment is a benefit that is so small as to make accounting for it unreasonable or administratively impracticable. Both the frequency and value of the benefit must be considered; the benefit must be occasional or unusual in frequency and the value must be less than $100. A qualifying de minimis fringe benefit must be either property or a service and cannot be cash or a cash equivalent. A gift card or gift certificate that is considered to be a cash equivalent item is never excludable from income as a de minimis fringe benefit. See Appendix University Employee Recognition Awards for further guidance.

Discretionary Funds

Those funds that are given to faculty or staff to be used for business-related goods or services as needed or desired by the individual.

Entertainment Hospitality & Entertainment

Expenses for development or maintenance of relationships that benefit the University; official recognition, recruiting, receptions or similar activities; concert and athletic tickets; gifts or flowers.

Non-Current Funds

Those funds used for activities which are not part of the “current operations” of the University. Non-current funds include loan, endowment, plant and agency funds. For purposes of this policy, agency fund expenditures are subject to approval by the constituency the funds are being held on behalf of. See Chart of Accounts, Fund Types.


A non-employee is a person who is not on payroll and who renders a service to the University or to whom the University wishes to extend goodwill and who is present at the University business meeting, entertainment event, or other activity. 

Non-Sponsored Funds

Funds available for use on activities that are not externally-sponsored research. For a list of non-sponsored funds numbers, see Chart of Accounts, Fund Types.

Personal in Nature

Expenses that do not exclusively benefit the University.

Private Funds

Those received from individuals or external entities primarily through gifts. Funds cannot be considered private if they have been received from activities that are part of the University’s primary mission (teaching, research, and outreach). Private funds include gifts from University recognized foundations, individuals, business and industry, and unrelated foundations. See Chart of Accounts, Fund Types.

Public Funds

Those received from “public” sources, such as students, governmental entities, or taxpayers, and which are intended to support the primary mission of the University. As such, public funds should be used in a manner which would withstand the test of public scrutiny. Public funds include federal and state appropriations, tuition and fees, income generated from external sales activities, and all sponsored research funds. See Chart of Accounts, Fund Types.

Reasonable Costs

“A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.” (OMB Uniform Guidance 200.404.)

Sponsored Funds

Money received by the University from an external party to fund a sponsored project. Sponsored projects are governed by specific terms and conditions, and are separately budgeted and accounted for in accordance with OMB Uniform Guidance, University policies governing sponsored projects, and/or the terms of the sponsoring entity. Sponsored funds may include money received to fund grants, contracts, and cooperative agreements for research, training, and other public service activities.

University Funds

All funds; non-sponsored, private, public, noncurrent, discretionary.


Certified Approver

For expenses on sponsored funds; reviews expenses for accuracy (including accounts being charged), appropriateness and compliance to applicable policies, procedures and Sponsor agreement. Takes action to approve, return or deny expenses based on review. For expenses to be denied or reimbursed as taxable, consults with department head, RRC Manager, or Chief Financial Manager.

Chief Financial Manager

Provide oversight and management of the financial activities and financial management practices within the Resource Responsibility Center. Review and approve budgets for special events that have extraordinary significance and importance to the University’s mission. Review, approve, or deny expense reimbursements that are not adequately documented or not submitted within 60 days. 

Internal Audit

If inappropriate expenditures are suspected or identified while conducting an audit or investigation, Internal Audit will refer the incident(s) to the Office of the Controller for evaluation and a final determination. The Controller may require the authorizing administrative unit to recover the expenditure from the individual involved or to report the amounts to Payroll Services for inclusion in the employee’s taxable income that will be reported to the Internal Revenue Service.


Document expenses via PeopleSoft EFS, or using the forms provided with the policy (or equivalent) when necessary. Correctly code the expenditure(s) so that expenses that are considered "unallowable" from an OMB Uniform Guidance cost perspective are identified. Departments and approvers are responsible for making sure that hospitality, entertainment, alcohol, and other special expenses are documented in accordance with appropriate standards. See the job aid Transaction Justification and Documentation Standards for all Non-Sponsored and Sponsored Transactions.

University Controller

Provide guidance and assistance to departments in evaluating and determining the allowability of expenses in various situations. Grant exceptions to the policy in situations where one is allowed and requested.

Related Information



July 2018 - Comprehensive Review, Major Revision.

  • Clarified that this policy is only applicable when external parties are involved and are integral to the purpose of the event.
  • Expenses related to employees only, employee recognition and employee engagement moved to new business expense policy.
  • College/System Campuses/VP Units may establish more restrictive guidelines than the ones within this policy.
  • Clarified the $100 limit includes food, beverages (incl. alcohol), tax and tip
  • Tipping should not exceed 20%
  • Exceptions must route to Controller from unit Chief Financial Manager
  • Related Procedure Documenting Hospitality and Special Expenses renamed to Applying for Expense Reimbursement (applicable to both policies)
  • Related Appendix University Fund Types no longer needed as referring directly to the Chart of Accounts, Fund page
  • Related Appendix University Employee Recognition Awards moved to Administrative Policy: Business Expenses


February 2013 - Minor Revision, Comprehensive Review: Removes the policy language on the sales and service of alcoholic beverages. These requirements now reside in the new Administrative Policy: Alcoholic Beverage Sales and Service, and Venue Liquor Licensing. Title changed to "Hospitality and Other Special Expenses" to reflect this change.


March 2011 - Comprehensive Review: Expands the policy to cover hospitality expenses incurred while in travel status; selling or serving alcohol on University property; and applicability of the policy to student groups who raise funds for outreach or charity. Clarifies departmental responsibilities, especially as it relates to tax compliance. Combines multiple appendices into one Allowability Matrix. Enhances the definitions and FAQ sections of the policy.


November 2004 - Updated Procedure - Purchasing Alcohol with University Funds. Added a checklist: Acknowledgement of Laws and University Standards Relatedto Serving Alcohol to the Application to Serve Alcoholic Beverages at an On-Campus Event Form. Responsibilities and Special Situations section updated. Processing of these applications is now the responsibility of Risk Management and Insurance rather than the President's Office.


July 2003 - Added Hospitality Expense Supplement, Allowability of Club Memberships, Spouse Expenses and Other Expenses Incurred in Donor Development and Faculty Recruitment Activities. The Expense Allowability Chart was updated to reflect these changes.


September 2002 - Personal memberships in social, non-professional organizations are no longer allowed, regardless of funding source. Any allowable expenditure of flowers, gifts or awards is limited to $75. Clarified definition of memorial gifts. Added more examples of non-allowable expenses.


March 2002 - Application to Serve Alcohol on Campus form was made into a fillable pdf document. Fund numbers updated.


February 2000 - Added Special Situation for Fleet Services charging vehicle fines to departmental accounts. Updated Expense Allowability Chart.


October 1999 -Added FAQ on employee recognition


June 1995


Hospitality and Special Expenses, July 1990, May 1991