Account Administration Policies

Expendable Accounts

1. Expendable accounts receive gifts, non-gift income, and in some cases endowment payouts (see below) that are immediately available to be used according to the purpose of the account and in accordance with the Foundation’s policies
2. Any income earned on expendable accounts is used to support the operations of the Foundation.
3. The minimum amount to open this type of account is $2,500, provided there is no other existing account with a similar purpose.

Endowment and Quasi Endowment Accounts

1. Please refer to the Endowment Procedures on the Foundation’s website, at Finance > Endowment Procedures.

Quasi Endowment Accounts

1. A quasi endowment account represents expendable monies that account administrators have requested be invested in the endowment pool.  Funds may come from gifts or surplus operating funds.
2. Quasi endowments are treated the same as permanent endowments; they generate payouts to an expendable account and are subject to the endowment administration fee. An account administrator may request that the payout be reinvested.
3. Account Set Up
   1. To establish a new quasi endowment the following must be submitted:
      1. A “Request for Establishment of Account” Form
      2. A “Transfer of Expendable Money to Quasi” Memo with the appropriate signatures.
   2. Quasi Endowments of less than $100,000 must be approved by the Foundation’s management.
   3. Quasi Endowments of $100,000 or more must be approved by the Foundation’s Board of Trustees or management under a delegation from the Board of Trustees.
   4. Contact the Chief Financial Officer to set up this approval process.
4. Minimum amount and waiting periods
   1. The minimum amount required to set up this type of account is $50,000.
   2. The minimum book balance to maintain a quasi endowment fund is $25,000.
   3. The minimum transaction amount for additions or redemptions is $5,000 per quarter.
   4. The waiting period for the first withdrawal is one year.
   5. Additions and withdrawals are made on a quarterly basis.

Transfers Between Accounts

1. No monies can be transferred from one Foundation account to another without specific written approval and justification by the account administrator(s) in a Transfer Funds memorandum. Transfers must be in accordance with the purposes of the accounts.

Advance Spending Policy

1. In accordance with Foundation policy, deficit spending is not permitted. Account administrators may only expend or encumber funds currently available in their accounts.

Inactive Account

1. If an account has been inactive for two years, the account may be closed with the account administrator’s approval.
2. Depending on the circumstances and the amount of the remaining balance, the funds may be transferred to an account with a similar purpose or to a discretionary account within the unit or to the Trustee Leadership Fund.
3. The Foundation will determine if donor approval is required.

Definitions

1. Contributions: A contribution is charitable and is a nonreciprocal transfer in that there is no implicit or explicit statement of exchange, purchase of services, or provision of exclusive information. If the donor receives benefits in return for the contribution, the amount of the gift recorded and reported is reduced by the fair market value of all benefits given according to IRS regulations. The Foundation is contracted by the University to receive all charitable contributions for the benefit of the University students, faculty/staff, and programs. All fundraising campaigns held for the benefit of a campus or unit shall be coordinated with the Foundation per UH Executive Policy 8.209.
   1. Acceptable Contributions
      1. Contributions for a University of Hawai‘i program or activity are processed through the Foundation.
      2. Contributions earmarked for a specific purpose must be deposited into an account with the same purpose.
      3. Please see the Foundation’s Gift Acceptance Policy for the types of contributions the Foundation accepts.
         1. Gift of securities – See Procedures for Accepting Gifts of Securities.
         2. Gift-in-kind – See Gift-in-kind Procedures. Please also refer to the UH Administrative Procedure Administrative Procedure AP 8.620.
2. Quid Pro Quo: The IRS defines quid pro quo as, “a payment made partly as a contribution and partly in consideration for goods or services provided to the payer by the donee organization.” The value of the benefits or “premiums” the donor receives is a key factor in determining the amount of the actual gift.
   
   If a donation is required to purchase tickets to an athletic event, the payment is not tax-deductible as a charitable contribution.
3. Safe Harbor Index: This IRS index helps determine whether donor benefits are considered insubstantial relative to the contribution. Generally, a benefit is deemed insubstantial if its value is the lesser of 2% of the donation or the IRS-defined threshold, which is adjusted annually for inflation. When benefits are insubstantial, the full amount is treated as a charitable donation.

Revenue Forms

For detailed instructions and access to all referenced forms, please visit the UH Foundation website.

3. Event & Membership Deductibility Worksheet: Required before promoting events or solicitations to determine the tax-deductible portion of payments. Annual submission is necessary for recurring events.

4. Transmittal of Contribution Form: Used when submitting contributions, including those with a quid pro quo element. Helps ensure proper fund allocation and compliance.

5. Transmittal of Other Income Form: For non-contribution income (e.g., reimbursements, royalties). Only income benefiting UH programs is eligible.

6. Transmittal of Auction Proceeds Form: Required for auction sales to properly acknowledge donors and comply with IRS rules.

7. Transmittal of Donated Items Form: Required for donated auction items valued at $250 or more. Ensures proper donor recognition, though acknowledgements will not include estimated or appraised values.

8. Prize Acknowledgement Form: Must be signed by individuals who win prizes valued at $600 or more. Used to gather information for IRS Form 1099-MISC.

9. Transmittal of Non-Cash Gift Form: Needed for tangible gifts-in-kind over $250 accepted by UH programs. Gifts of $1,000 or more are recorded in UH’s inventory.

General Expenditure Policies

1. Foundation funds come from donors. The Foundation strives to maintain complete transparency regarding the use of these funds.
2. Expenditures must be reasonable and appropriate. They should never be lavish or extravagant and must align with the intent and spirit of the donor’s contribution.
3. Use of donor funds must be scrutinized carefully. 
   
   When spending Foundation funds, consider the following questions to ensure that resources are used appropriately and that the Foundation is acting as a responsible steward of the funds entrusted to us.
   1. Alignment with Policy
      1. Is the expenditure consistent with the guidance in this document?
      2. If not, is there a clear and documented justification?
   2. Donor Perspective
      1. Would donors find this use acceptable?
      2. Would they have contributed if they knew how and for what amount the funds would be spent?
      3. If expenditures were public, would the benefit to the University be evident?
      4. Would you feel comfortable explaining this expense to a donor?
   3. Public Scrutiny
      1. Could the amount be defended under audit or public review?
      2. Would you be comfortable if the expense appeared in the news?
4. Special attention to enrichment, advancement, and discretionary accounts. These accounts often have broad purposes, allowing flexibility in supporting a unit, program, or project. While this flexibility is beneficial, it requires heightened responsibility to ensure funds are used prudently to advance departmental work, not for personal benefit.
5. University units hold primary responsibility for ensuring expenditures comply with donor intent.
6. The Foundation, as a tax exempt organization, will determine in its sole discretion whether to reimburse, not pay, or to reduce payment requests for expenses which appear unreasonable, unjustified, lavish or extravagant, or inconsistent with donor’s intent.
7. Some expenditures, especially meals, may be subject to additional approvals.
8. Payments to University employees:
   1. The Foundation may reimburse employees for expenses.
   2. It cannot make direct payments to or on behalf of employees for items considered compensation and benefits under IRS rules. In such cases, the University must pay the employee first, and the Foundation may then reimburse the University.

Requests for Payment

1. Time Limits
   1. Reimbursement requests should be submitted to the Foundation’s Accounting & Finance Office within ninety days of the transaction.
   2. Requests submitted ninety days after the transaction require written justification as to the reason for the delay and may not be reimbursed.
2. Payment requests must be submitted through Concur Invoice, the Foundation’s cloud-based invoice management system. Include the following which are discussed in more detail below.
   1. Business purpose.
   2. Documentation of expenditures.
   3. Authorized approvals.
   4. Documentation of quotes. Purchases over specific amounts require documentation of verbal or written quotes.
   5. Other documentation. Different types of expenditures require additional documentation. A summary (see Section H) is provided for these types of expenditures, the forms required, the reason for the additional requirements, and the policy section for further information.
   6. The Foundation requires an IRS W-9, W-8 BEN, or W-8 BEN-E form on all vendors and individuals who are non-UH employees when payment is requested. This is to comply with federal tax reporting guidelines.
   7. Payment requests should be made payable directly to the vendor or, when necessary, to the employee requesting reimbursement. Employees should make every effort to pay vendors directly and minimize the need for employee reimbursements.
3. Purchase Orders
   1. In some situations the account administrator may choose to use a purchase order or a vendor may require a purchase order before providing goods or services.
   2. Complete and submit a UHF Purchase Order Request in Concur. Include the following:
      1. Business purpose
      2. Authorized approvals
      3. Documentation of quotes with supporting documents. Purchases over specific amounts require documentation of verbal or written quotes
   3. Purchase orders are generally issued two days after the requisition is received, provided all documentation is in order.
   4. A copy of the purchase order will be available in Concur once fully approved. The requester must transmit the PO to the vendor in Concur.
   5. Once goods or services have been received, the receiver must submit the PO supporting documents and invoice in Concur for payment.
   6. If the actual amount of the invoice is greater than 5% or $500 more than the purchase order amount, the account administrator's approval will be required before payment can be made except for reasonable changes or modifications to taxes, shipping charges or insurance.

Business Purpose

1. All payment requests must include a detailed written justification that clearly identifies the business purpose, demonstrates how the expenditure advances the University’s mission, and confirms alignment with donor intent.
2. Documenting the business purpose is essential to show that the expense is appropriate and reasonable. The explanation must be in writing and provide sufficient detail so the benefit to the University is easily understood.
3. Even if the business purpose seems obvious, it must be explicitly documented to ensure compliance and favorable tax treatment.
4. The purpose and amount of the expense must reflect sound judgment and responsible stewardship of funds.

Documentation of Expenditures

1. Include the date and amount of the expenditure on all documentation.
2. Meals/entertainment.
   1. Provide the names, titles, and business affiliations of individuals involved. When appropriate, use descriptive terms such as “donor” or “prospect.”
   2. If the event is a meeting or reception where only refreshments are served, attendee names are not required. Instead, submit a copy of the meeting notice, invitation, or agenda with the disbursement request.
3. Invoices or itemized receipts are required for all amounts over $25. Acceptable receipts include:
   1. Vendor-provided receipts including airfare/rail receipts, hotel folios and car rental receipts.
   2. Cancelled checks (if copies, include back and front).
   3. Credit card receipts if detail of purchases are listed.
   4. For meals, include the detailed receipt as normally supplied by the restaurant. This would be the receipt the restaurant would provide if the meal was paid for in cash. A credit card receipt without details is not sufficient.
4. Electronic Receipts
   1. a. The Foundation accepts legible scans of original invoices, receipts, and receiving reports.
   2. Supporting documentation for online bookings or internet purchases must include proof that the transaction was successfully completed. The following outlines the minimum requirements for an electronic receipt to be considered acceptable as proof of purchase.
   3. Airline e-tickets
      1. Passenger name.
      2. Issue date and ticket number. A ticket number on the receipt indicates that a ticket has been purchased.
      3. Travel itinerary.
      4. Total payment amount and payment type.
   4. Hotel
      1. Name and address of hotel.
      2. Guest name(s), number of guest(s) and number of rooms.
      3. Check in and out dates, number of nights and price per night.
      4. Date paid, total amount paid and payment type.
   5. Conference registration fees
      1. Name of registrant.
      2. Name and dates of conference.
      3. Date paid, total amount paid and payment type.
   6. Other Miscellaneous Purchases
      1. Name and address of vendor.
      2. Date purchased.
      3. Itemization of items purchased.
      4. Total amount paid and payment type.
      5. Document needs to include evidence that the transaction was completed.
5. Missing invoices/receipts; Credit Card Slips Without Detail
   1. The Foundation stresses the importance of retaining receipts for an accurate accounting of expenses but understands there are rare instances where receipts cannot be obtained or are lost. The IRS provides an exception in keeping records “actual receipts” for any expense, other than lodging, that is less than $70.
   2. b. A Missing Receipt Affidavit must be signed by the claimant with a complete explanation of the expense and the reason for the missing receipt. Some other form of documentation may be required for certain types of purchases.
   3. For missing airline receipts, the affidavit must be accompanied by a copy of the itinerary and one of the following:
      1. Credit card receipt or credit card billing statement.
      2. Cancelled check or other record of payment.
   4. Using missing receipt affidavits instead of actual receipts may delay or, in some cases, result in the denial of reimbursement requests. If missing receipts become frequent, the Foundation reserves the right to suspend future reimbursement payments until the underlying issue is resolved.

Approvals of Payments, Transfers and Reimbursements

1. All requests for payment or transfer of funds must be approved by an account administrator.
2. Payments or transfers of $3,000 or more require approval from two account administrators. In certain circumstances, a dean, director, or higher-level authority may serve as the secondary approver.
3. Account administrators are prohibited from approving reimbursements for themselves. When submitting an expense reimbursement request, both the account administrator and the UH/RCUH/UHF employee receiving reimbursement must certify that the expenditure:
   1. aligns with the purpose of the account,
   2. complies with Foundation account policies,
   3. supports bona fide University activities, and
   4. does not provide any direct or indirect personal benefit.
4. Payments made directly to an account administrator in the amount of $3,000 or more must be approved by two individuals other than the account administrator being reimbursed. Approvers may include:
   1. Two other account administrators, or
   2. a fiscal officer, supervisor, department chair, or higher-level authority, even if they are not an account administrator.
5. Reimbursements to deans, directors, and higher-level authorities may require approval from their supervisor, in addition to account administrator approvals. Supervisor approval may be required for the following:
   1. Meal and entertainment expenses involving others, regardless of amount.
   2. Non-meal and entertainment expenses exceeding $150. Submitting multiple check requests to circumvent this requirement is strictly prohibited.

Documentation of Quotes for Goods or Services $4,000 or More

1. Payment for goods or services in the amount of $4,000 to $15,000 requires at least three verbal quotations or sole source justification. Document the verbal quotes and submit a written quotation for the vendor selected when submitting a requisition for a purchase order or a request for payment.
2. Purchase of goods or services over $15,000 require three written quotations or sole source justification, which must be submitted together with the requisition for a purchase order or the request for payment. You can document verbal quotations and sole source on the Record of Sole Source and Verbal Quotations.
3. If the lowest quotation is not selected, the justification for the selection should be stated.

Reimbursement Timing

1. Requests for payments received on a business day will generally be processed within approximately five business days (one week), provided that the business purpose, documentation, and approvals are complete and in order. If additional information or clarification is required, processing may be delayed until all necessary details are received.

Other Documentation Summary

Types of Expenditures

1. Contributions
   1. The Foundation does not make charitable contributions using donor funds. All funds entrusted to the Foundation are designated to advance the University and its mission. As stewards of these resources, we ensure that expenditures align strictly to benefit the University.
   2. Political contributions: Foundation policy prohibits the expenditure of Foundation funds to support a political campaign, a candidate for public office or a political party. This includes fundraisers or dinners sponsored by a committee whose proceeds go to the benefit of a politician or political party.
   3. Employee recognition and appreciation activities
2. Employee recognition and appreciation activities
   1. Expenses for parties, holidays, and social events are not reimbursable. This includes Administrative Professionals Day, birthday lunches, social gatherings, and similar activities..
   2. Recognition Events
      
      Occasional group events, may be held by a department or work group to celebrate extraordinary individual or group accomplishments, or the retirement or departure of a key, long-term staff or faculty member. These types of events and occasions should not occur more than once annually.
      
      Light refreshments may be reimbursed for such events.
   3. Service Awards
      
      Generally such tangible personal property awards can be viewed as achievement awards for length of service and therefore are excludable from taxable income to the employee and may be paid directly by the Foundation.
   4. Service Recognition
      
      The Foundation cannot make direct payments to University employees for awards or prizes. Cash awards, gift cards, and certain tangible items (e.g. jewelry) are taxable under IRS rules and must be processed through University payroll; the University unit may then request reimbursement from an appropriate Foundation account. Non-cash service awards that meet IRS criteria, such as tangible items given for length of service, may be excluded from taxable income and paid directly by the Foundation, subject to IRS limits.
   5. To request reimbursement from the Foundation, the department must coordinate with the University’s payroll office and be prepared to provide the following information: a list of employees, their departments, reimbursement amount, and a short description of the item. Proof of acknowledgement from the University payroll department should be submitted to the Foundation with the payment request. The department must also notify employees that the reimbursement will be included in their W-2. Awards of tangible items valued at $25 or less (excluding cash and gift cards/certificates) are considered de minimis and may be paid directly from a Foundation account.
   6. Service Recognition Event
      
      Refreshments for a group may be reimbursed for employees with 10 or more years of service. For employees with fewer years of service, the event must be approved by a dean or higher. Meals related to retirement events or an employee leaving a department are not reimbursable, except for the retiring individual and their supervisor; all other guests must cover their own expenses.
3. Facilities renovation
   1. Before payment can be made by the Foundation for renovations, repairs, or additions to University facilities such as those listed below, written approval from the University Facilities Management Office will be required.
   2. Please contact your unit fiscal officer for University procedures for obtaining the appropriate approval for the following:
      1. Renovations that involve electrical, plumbing or structural alteration work to a University building, room or other facility.
      2. Purchase and installation of certain types of fixtures to a University facility, e.g. carpets, window blinds, signs, air conditioning units.
4. Fines and Fees
   1. Violations that result in fines (parking, traffic or others) or late fees are the personal responsibility of the individual. These expenses will not be paid. Credit card annual fees are not reimbursable.
5. Flowers
   1. Flowers may be purchased for business-related activities including the following:
      1. University-organized public relations and fundraising activities.
      2. Student orientation, student/parent receptions, and departmental graduations or awards ceremonies.
      3. Funeral or illness of an employee, retiree with a minimum of ten years of service at the University, donor, or volunteer of the University.
   2. The dollar limitation for floral arrangements is $200 and for leis is up to $35. Amounts in excess of this limit will be deemed a personal expense and will not be paid.
   3. Contributions (“In lieu of flowers”) The Foundation allows expenditure of funds for flowers sent to a funeral of an employee, a donor or a volunteer of the University. When the family requests that a donation be made to the deceased’s or family’s charity of choice “in lieu of flowers,” an exception to the charitable contribution policy may be made. The gift must be made on behalf of the University and not any one individual or individuals.
6. Fundraising activities
   1. Development expenses incurred in the course of organizing and conducting activities for the purpose of raising funds or creating “good will” for the University may be paid. Expenses may include meals, refreshments, entertainment and travel.
7. Fundraising events, tables and sponsorships
   
   Foundation funds may only be used to purchase tables or sponsorships at fundraising events when there is a clear, legitimate business purpose. All purchases must meet the following requirements:
   1. Demonstrated direct university connection
      
      There must be a clear and direct connection between the event and the University. Examples include:
      1. A University employee or representative is being honored at the event; or
      2. The event’s purpose directly aligns with the University unit’s mission, program objectives, or the University’s strategic plan.
   2. Cost limitation
      
      If a table is purchased, the lowest-priced table option available should be selected.
   3. Non-allowable purpose
      
      Events where the primary purpose is to increase or enhance the University’s presence in the community are not an allowable use of funds and will not be approved.
8. Furniture/equipment
   1. All tangible materials, supplies, and equipment purchased using Foundation funds are considered University property and must be managed in accordance with University asset policies. Certain equipment purchases must be reported to the University Property & Fund Management Office for inventory. The Purchase of Equipment form must accompany the payment request or purchase order requisition for items that:
   2. Certain types of equipment purchases must be reported to the University Property & Fund Management Office for inventory purposes. The Transmittal of Non-Cash Gifts form is also used for this purpose and must be submitted together with the request for payment or requisition for a purchase order for the following items:
      1. Have a useful life of more than one year, and
      2. ii. Cost over $5,000 per unit.
9. Gifts to Non-employees
   
   When appropriate, funds may be used for gifts for dignitaries and visiting guests. Contact the Foundation’s Accounting and Finance Office with any questions related to these expenditures. The limit is $150 for these types of expenditures.
10. Meal Expenditure Policy
    
    More restrictive policies and procedures may apply to Foundation accounts based on donor restrictions. This guidance applies to all payment types.
    1. Reasonableness Test
       
       Meal expenses must be reasonable in amount, appropriate under the relevant circumstances reasonably necessary to the expedient conduct of University business and compatible with the Foundation’s status as a publicly supported entity.
        
    2. Prior Approval
       
       To avoid any potential rejections of expenditures, prior approval of questionable expenses should be obtained from the Foundation’s Accounting & Finance Office and your supervisor.
        
    3. Documentation of Business Purpose
       
       Business must generally be discussed during the meal or activity, and every person whose expenses are paid by the Foundation must have a direct business connection to the event. Even if the business purpose seems obvious, it must be specifically documented to ensure favorable tax treatment. This documentation does not require lengthy explanation; in most cases, a short description such as “discussed new research project” will suffice. The Foundation will refuse payment for any meal or entertainment expense that lacks sufficient documentation of the business purpose. For example, a vague statement such as “to discuss University/Department issues” will not be considered adequate. Additionally, the Foundation will not pay for meals that are deemed lavish or extravagant.
        
    4. When both business and non-business individuals attend the same event, the Foundation will reimburse only the expenses for those with a business purpose. If individual expenses cannot be identified, it is acceptable to allocate the total bill on a pro rata basis among the business participants. Children are not considered business participants, and their expenses will generally not be reimbursed.
        
    5. Meals while traveling on business and in-town meals when only employees are in attendance. These amounts do not apply if the traveler chose to be reimbursed based on per diem rates while traveling.
       
       The following are the per-person expenditure limits for meals established by Foundation policy.
       
       These limits are all inclusive and include, but are not limited to, meals, beverage/alcohol, tip, tax, and any other service fees.
        

       Meal	Per Person Maximum for Meals While Traveling & In Town Meals Between Employees
       Breakfast	Up to $25.00
       Lunch	Up to $40.00
       Dinner	Up to $55.00

       
       In general, the Foundation will not pay for or reimburse costs for meals just between employees within the same department / unit except as provided below. Examples of such events include:

       • Meals related to offsite seminars / conferences / retreats.
       • When a meeting takes place over an extended period of time and the agenda includes a working meal.
       • A meeting where there is a scheduled luncheon speaker.

       Meals between employees from different unit departments are not eligible for reimbursement when the gathering is primarily social or incidental to ongoing business discussions. Reimbursement is not permitted when the meal is of a reciprocal nature, when the business discussion could have occurred during regular working hours, or when the meal does not serve a clear and necessary business purpose.

    6. Business meals
       
       Business meals are those taken in connection with a bona fide business purpose, where payment is made and reimbursement is requested, and an outside party (in addition to the employee) is present.
       
       These expenditure limits reflect best practices and benchmarking against other institutionally related foundations and universities.
       
       The following per-person expenditure limits for meals are established by Foundation policy. These limits represent the maximum allowable amounts and are all-inclusive, covering meals, beverages (including alcohol), tips, taxes, and any applicable service fees. Actual expenses should be reasonable and fall below these limits whenever possible.
        

       Meal	Per Person Maximum for Business Meals
       Breakfast	Up to $35.00
       Lunch	Up to $70.00
       Dinner	Up to $140.00
       Light Refreshments	Up to $25.00

       
       Amounts in excess of these limits may be permissible based upon circumstances such as the business purpose of the meal, the guests present and other factors. The business purpose write-up explaining the need for the exception will be critical.
       
       Meetings involving senior recruitments, visiting dignitaries, donor relations may involve a higher cost. Certain events, particularly those honoring or cultivating donors may fall outside of these guidelines. These special events are not meant to set the style for traditional business meals with vendors and business partners.
       
       The Foundation recognizes that typical meal expenses can range widely depending on circumstances. A breakfast meeting in a hotel restaurant will be far more expensive than coffee at a local coffee shop. Hence, the above guidelines are presented as a guideline rather than a single amount.
       
       In all cases, fiscal prudence and good judgment should be exercised.
        

    7. Alcoholic Beverages
       
       The Foundation will reimburse the cost of alcoholic beverages up to a reasonable amount. Prudence should be used in the purchase of such beverages as they may comprise a significant portion of the cost of the meal. The average cost should not exceed $25 per person.
       
       Where applicable the appropriate University forms related to alcohol should be completed approved and a copy submitted with the payment request.
        
    8. Meals in a private home
       
       Such meals are allowed within the overall guidance for business meals. When the meal is provided in a private home, only actual out-of-pocket costs relating to that specific affair (e.g. catering, set up/take down, floral arrangements, rentals, cleaning) will be paid by the Foundation. While the Foundation will pay for these expenditures, the Foundation is not liable for these events, nor are they covered by the Foundation’s insurance. Insurance should be secured from other sources for these types of events.
        
    9. Spouse Expense Reimbursement
       
       Reimbursement for spousal attendance at business meals / events is allowed only in a few situations.
       
       Meals provided to a spouse, family member or other person accompanying a University employee will be reimbursed only when there is a substantial and bona-fide business reason for that person’s attendance. The IRS does not permit tax-free treatment when the spouse or other person is present merely for a social or personal purpose. It must be shown that the spouse played a “significant role in the proceedings” or made “an important contribution to the success of the event.” This type of expense will not be approved without detailed supporting documentation, including an explanation of the Spouse’s role or contribution to the event. (e.g., an event or meeting agenda, or a letter of invitation requesting that spouses attend.)
       
       This is in addition to documenting the business purpose of the event. If the spouse’s attendance is not business related, a pro rata share of the total expense should be excluded from the expenditure payment.
       
       There are events, however, where spouses or others are appropriate and necessary for building the sense of community. While permissible, such situations should be kept to a minimum.
       
       Examples of business events where spouse attendance would be paid / reimbursed:
        
       • A University employee provides a meal to a business relation as part of a meeting. The business relation’s spouse attends the meeting because it is impractical to provide the meal to the client without the spouse. The spouse of the University employee attends the meeting, because the spouse of the business relation is in attendance. Then, the meals of both spouses will be reimbursed.
       • Annual University reception for new faculty / chairs / professorships.
       • Conferences where attendance of spouses or others is customary.
          
    10. Frequency of Business Meals
        
        Business meals require a significant commitment of time and financial resources. Accordingly, the number of such events should be limited. It would be an extraordinary circumstance for an individual to participate in University business meals on a daily or several days per week basis. Where possible, meetings should be conducted during the remaining hours of the workday.
         
11. Membership and dues
    1. Dues and fees for institutional memberships may be paid from Foundation funds.
    2. Dues for individual memberships in a professional association may be paid from Foundation funds.
    3. Dues and membership fees for individual membership in civic service or private/social clubs may be paid from Foundation funds when provided for in an employment contract. Such dues may otherwise be paid from Foundation funds only when such memberships are deemed necessary for business purposes and appropriate discretionary Foundation funds are available. Requests for Foundation support of such memberships must be made in writing with an explanation of how the membership will advance University purposes and describing the source of funding and its suitability. Requests must be approved by both the University President and the UH Foundation CEO. In compliance with IRS requirements, civic service or private/social club dues paid on behalf of employees must be reported in the employee's taxable compensation even if the club is used entirely for business purposes.
    4. Certification fees or fees for licenses to practice a profession related to the University may be paid from Foundation funds.
    5. Membership in airline clubs, e.g., United Club, may not be paid from Foundation funds.
        
12. Moving/relocation expenses
    
    All moving expenses paid to or on behalf of an employee must be reported on the individual’s W-2. Therefore, these types of payments must be made by the University. If the funds to cover these expenses are held in a Foundation account, a request for payment form to reimburse the appropriate University account may be submitted together with an invoice from the University to the Foundation or some other proof of payment, e.g. copies of invoices/receipts paid by the University.
     
13. Office of Research Services (“ORS”) Agreements
    1. A University unit/department wishes to pay salary and fringe for UH personnel, or large equipment, etc. from a Foundation account. These types of expenses may require an ORS agreement.
    2. For additional information please visit ORS Procedures for instructions and a link to request for an Request for ORS Agreement.
14. Prizes
    1. Merchandise or services with a fair market value of $600 or more purchased with Foundation funds (or donated) that are given away as a prize at a fundraising event (e.g., door prize at a banquet or prize won at a golf tournament, etc.) are considered taxable income to the winner.
    2. The recipient must complete a Prize Acknowledgement Form to provide the Foundation with information required for the issuance of IRS Form 1099-Miscellaneous income at calendar year-end.
15. Salary supplementss
    
    The Foundation cannot make direct payments to a University employee that may be considered income for IRS purposes. These types of payment must be made by the University. Please submit the Verification for Payment of Services to an Individual form, in order for the Foundation to transfer the funds to the appropriate University account.
     
16. Subscriptions
    
    Subscriptions should be limited to professional journals and periodicals required as working tools by academic departments or administrative office. Payment requests for subscriptions must be accompanied by the renewal notice or order form showing the price of the subscription. A copy of such documentation is acceptable in cases where the department wishes to send the check with the original form.
     
17. Travel
    
    It is the policy of the Foundation to pay for necessary and reasonable travel expenses incurred for official University business. In cases where individuals combine University travel with personal travel, the Foundation will reimburse only the portion attributable to University business. This applies to both the per diem and actual expenditure reimbursement methods.
    
    Required Documents for Business Travel Expenses
    1. Approved University employee travel form (e-travel) with each request submitted for all travel expenses.
    2. A traveler may select either a per diem or direct reimbursement payment. The traveler will not be able to receive a combination of both. The only exception would be for excess lodging for moderate/budget accommodations.
    3. Per Diem
       
       A per diem allowance is authorized to cover the lodging, meals and incidental expenses of a traveler. Federal law establishes the maximum per diem rates by location. Go to IRS website to download Publication 1542.
       1. Travelers may receive an advance per diem not more than two weeks before the date of travel. If the traveler selects a per diem allowance, the traveler will not receive reimbursement for excess meal costs.
       2. The per diem will be prorated for partial travel days as follows:
           

          If Time of Departure or Return is:	Per Diem Allowed on Day of Departure	Per Diem Allowed on Day of Return
          12:01 a.m. – 6:00 a.m.	1 day	1/4 day
          6:01 a.m. – noon	3/4 day	1/2 day
          12:01 p.m. – 6:00 p.m.	1/2 day	3/4 day
          6:01 p.m. – midnight	1/4 day	1 day

       3. A traveler's per diem shall not be reduced on the basis of meals included in conference programs. But, if the conference meal is an option (at added cost to the registration fee), the meal subsistence will be reduced based on the rates below. In situations where living quarters are made available to the traveler without charge, a meal subsistence allowance will be given in lieu of per diem.
       4. Business meals with others while traveling will be reduced by traveler’s per diem for that day. This applies to all University employees in attendance.
       5. When traveling with other University employees, a traveler will be required to certify that he/she notified others to reduce their per diem if the traveler pays for a group meal.
       6. Subsistence allowances are based on the maximum federal per diem meal rates per locality and are established as follows:
           

          Breakfast	20% of per diem meal rate (rounded to nearest $)
          Lunch	30% of per diem meal rate (rounded to nearest $)
          Dinner	50% of per diem meal rate (rounded to nearest $)

       7. In situations where travel packages include air, room and meals (e.g., Las Vegas tours), per diem will not be allowed.
       8. For same day inter-island business travel, the traveler may claim $30 per diem per day for meals.
    4. Direct actual reimbursement
       
       Travelers requesting direct reimbursement will not be given a travel advance. The traveler must submit appropriate documentation for all reimbursable expenses. Other reimbursable expenses include, but are not limited to, parking, taxi fares, mileage, and conference fees.
       1. Hotel
          • Generally, lodging should not exceed the federal maximum allowable rate for the particular location.
          • Excess lodging will require justification.
          • If the hotel is located at the conference site, the conference rate offered by the hotel will be deemed reasonable.
          • Charges to the hotel bill, other than room expense and taxes, must be itemized and explained separately.
          • Only the traveler’s room charge for single occupancy is reimbursable.
       2. Meals
          • Reasonable expenses incurred for meals while traveling on business will be reimbursed.
          • Refer to the Meal section above for additional details regarding direct reimbursement.
    5. Airfare
       1. All business-related travel must be booked using economical and practical fare options to ensure the responsible use of donor resources, and travelers are required to select economy class for air travel.
       2. The Foundation does not reimburse costs for first-class or business-class tickets, nor will it cover airfare upgrades under normal circumstances.
       3. Any additional expenses resulting from upgrades to business or first class, personal side trips, or stopovers are the sole responsibility of the traveler and must be paid in advance..
       4. While travelers may retain frequent flyer benefits, these benefits must not influence airline selection or result in higher costs to the Foundation.
    6. Automobile
       
       Employees are expected to select cost-effective and practical rental vehicles appropriate for the nature of the trip.
        
    7. Mileage Reimbursement
       
       Mileage incurred during approved business travel using a personal vehicle will be reimbursed at the standard rate established by the IRS, as updated periodically. This reimbursement applies only to off-island business-related travel.
        
    8. Personal expenses
       
       Expenses incurred for traveler’s personal benefit, e.g., magazines, movie rentals, spa and other entertainment, are not reimbursable.
        
    9. Companion
       
       If a traveler is accompanied on a University business trip by a non-business companion (such as a spouse, family member, or friend), the companion’s travel expenses are considered personal and will not be paid or reimbursed by the Foundation.
        
    10. Visiting lecturers/speakers, guests of the University
        1. Foundation funds may be used to bring official guests of the University to campus. Costs of transportation, lodging, meals and necessary miscellaneous expenses are included.
        2. The same rules for travelers on University business apply to travel expenses paid by the Foundation for visiting lecturers/speakers and guests of the University.
        3. The Foundation may reimburse expenses for the spouse of an official guest; however, unless the spouse’s attendance is demonstrated to be both mandatory and necessary for University business, such expenses will be treated as payment for services rendered to the guest. In these cases, an IRS Form 1099-MISC will be issued to the guest at the end of the calendar year. Additionally, the visiting lecturer, speaker, or guest’s Social Security number must be obtained for reporting purposes.
18. Services rendered
    1. Employees
       1. The first step in processing payment for services rendered is determining whether the individual is a current employee of the University or if the individual meets the IRS criteria to be considered an employee of the University. See University “Administrative Procedures A8.230” for guidance.
       2. Any individual who will be working for a unit and does not qualify as an independent contractor should be added to the University's payroll system before the work begins.
       3. The Foundation cannot directly pay a University employee or make payments on their behalf for items that may be considered wages under IRS guidelines. In such cases, the University must first pay the employee, and then the Foundation can reimburse the University. Examples of payments that may be considered wages include:
          • Services rendered or honoraria.
          • Awards and prizes for outstanding performance or achievement.
          • Fellowship grants.
          • Certain relocation expenses (See below Relocation Expenses).
          • Expenditures for entertainment, amusement, or recreation, including social club dues..
       4. When the Foundation reimburses the University for employee wages paid, the calculation may also include fringe benefits for the employee (e.g. employer portion of FICA, FUTA, SUTA, workers compensation, TDI, etc.) The Verification for Payment of Services to an Individual can be used to process the reimbursement to the University for employee wages.
       5. If payment to an individual requires that funds first be deposited into a University account, the Foundation may choose to advance funds one calendar quarter at a time. The Foundation may also request a report detailing how the advanced funds were used.
    2. Independent contactor
       1. Submit the Verification of Employee - Independent Contractor form to process payment to an individual who has performed services as an independent contractor.
       2. If the independent contractor is a nonresident alien, please process the payment through a University account.
       3. Attach an invoice from the independent contractor.
       4. For a token honorarium, an invoice will not be required. Instead, a copy of the letter of invitation should be attached.
19. Student aid
    
    Please see University of Hawai‘i Foundation Student Aid Expenditure Process for details on requests for payments in regards to student aid.