Conduct and Compliance Procedure - Entertainment

Parent policy

Conduct and Compliance Policy

Preamble

Entertainment is recognised as necessary to promote the University to commercial and philanthropic benefactors and to engage with staff, colleagues and stakeholders to further the University's strategic objectives.

Refreshments and meals are provided to staff and guests in a style and location to minimise the imposition of Fringe Benefits Tax, where possible. Entertainment expenses for employees and associates are deemed to be a benefit to the employee and incur the additional cost of FBT, which effectively doubles the cost of the entertainment.

The purpose of this procedure is to advise University staff on the circumstances under which entertainment expenditure is deemed appropriate and to guide staff incurring such expenditure.

Definitions

Associates: defined as being a relative, partner, spouse or child of a staff member or their partner.

Entertainment expenditure: is the provision of meals, refreshments and recreational activities other than staff amenities, refreshments, and meals whilst travelling and includes:

• breakfasts, lunches and dinners off-campus;
• official functions, receptions, farewells, retirement functions (social functions);
• conference dinners held locally (i.e. interstate or international are considered meals whilst travelling).

Fringe benefits tax (FBT): tax payable to the Australian Taxation Office (ATO) by the University on that portion of the expenditure which relates to the provision of benefits to University staff (or their associates). Entertainment benefits include meals, refreshments to University staff (or their associates).The following general rules apply to the determination of “taxable” entertainment.

• Meals and drinks provided to staff at an in-house dining facility on a business day are exempt from FBT, except for social functions.
• Meals and drinks provided to staff at on-campus restaurants on a business day are exempt from FBT if paid by the corporate credit card. If a staff member pays and seeks reimbursement FBT will be applicable.
• The cost of entertainment provided to staff at off-campus venues is taxable on their and their associates portion of the total bill.
• Light refreshments provided on University premises do not attract FBT - except where alcohol is consumed.
• “Eligible seminars” are exempt from FBT. (i.e. conferences, conventions, lectures, meetings, award presentations, speeches, question and answer sessions, training sessions or educational courses) These seminars must have a continuous duration of 4 hours or more (excluding breaks), must not be associated with the promotion or advertising of the business and its services, and their sole or dominant purpose must not be for the provision of entertainment.

Meals whilst travelling: is the cost of meals incurred by staff whilst travelling on official University business, unless there is other entertainment such as a floor show, dancing, or live band (refer to Staff International Travel Procedures for Australian Campuses).

Staff amenities and refreshments: includes non-alcoholic drinks and finger food to be consumed on University premises. This food and drink is provided for morning and afternoon work breaks, business meetings and training sessions. This category includes meals served to employees in an "in-house dining facility" during business hours, except at a social function.

1. Authorisation of entertainment expenditure

Staff members incurring entertainment expenditure are responsible for:

• demonstrating that the cost is appropriate and reasonable in the circumstances, including that the number of staff attending is necessary to advance University business or where the University will benefit from their attendance;
• providing complete documentation, including detailing the purpose and the benefits accruing to the University from the activity; and
• obtaining proper authorisation and sign off by their supervisor, including prior approval from the dean or divisional director for entertainment of associates.

The cost of the entertainment should not exceed $150 per head. If a staff member intends to spend more than $150 per head they must notify their supervisor.

Authorising officers are responsible for ensuring that any claim for payment or reimbursement of entertainment expenditure is:

• appropriate and reasonable in the circumstances, including that the number of staff attending is necessary to advance University business or where the University will benefit from their attendance
• properly supported by complete documentation, including detailing the purpose and the benefits accruing to the University from the activity; and
• Prior approval of the dean or divisional director was obtained for the entertainment of any associates.

Where the cost of the entertainment exceeds $200 per head, the Dean/Divisional Director/PVC must provide a written report of the entertainment to the Vice Chancellor on a monthly basis.

2. Payment for entertainment and reimbursement claims

The responsibility for paying the bill on their corporate credit card falls to the most senior staff member present.

Staff should refer to the University FBT Policy and Procedure in order to minimise the imposition of FBT and ensure that all relevant details are recorded and appropriate procedures are followed.

Where an invoice or claim form is for the provision of entertainment, FBT will be charged on the whole amount unless the number of employees, associates and non-employees who attended the function is clearly indicated.

All expenses relating to entertainment are to be processed using the Monash Corporate MasterCard, Monash Club account or via an Entertainment Claim Form.

Purchase orders or standard claim forms are not to be used for processing entertainment expenses.

Responsibility

Staff may incur University entertainment expenditure where they have the express prior approval of their dean or divisional director. Staff incurring entertainment expenditure must read, understand and comply with this procedure.

Related procedures

• Petty Cash – Summary of Entertainment
• Staff International Travel Procedures for Australian Campuses
• Procedure for Preparing the Entertainment Expense Claim Form

Related documents

• Fringe Benefits Tax
• Meal Entertainment FBT Calculator

Related forms

• Entertainment Claim Form