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Policy and Procedure ManualChapter 380, Personnel--General Responsible Department: Accounting and Financial Services This section outlines policy and procedures related to non-cash awards presented on behalf of the University to its academic and staff employees, provides the maximum amounts authorized for an award, and specifies the University funds that may be used for such purposes. This policy also covers the provision of gifts to employees as an expression of sympathy. Reimbursement of expenses related to employee recognition events such as picnics and holiday parties is covered in Section 330-80. For information on cash awards, see Personnel Policies for Staff Members (PPSM), Policy and Procedure 34, Incentive Awards. It is the policy of the University that the following work-related events may be acknowledged by the presentation of a non-cash award to an employee for a recognition, length of service, or retirement purpose. In addition, gifts as an expression of sympathy may be presented to employees as specified in IV.A.2, below. Such awards and gifts are intended to conform to the Internal Revenue Service (IRS) regulations in order to be excludable from an employee's gross income. A. Approvals Department heads have the authority to approve requests to reimburse expenses for employee non-cash awards and sympathy gifts. A Davis Financial Information System (DaFIS) Approval Authorization or Cancellation form (http://accounting.ucdavis.edu/Forms/) must be on file for individuals who have been delegated this authority. B. Nondiscrimination Awards must be presented to employees on a nondiscriminatory basis. C. Exceptions Exceptions may be authorized by the Associate Vice Chancellor--Finance. An exception request must specify the type of award, the purpose of the award, the special circumstances that require such an exception, and the name of the employee for whom the exception will be granted. A. The department head is responsible for ensuring that any awards made to employees conform to the requirements of this policy and that claims submitted for payment or reimbursement include the appropriate supporting documentation. B. Accounting & Financial Services is responsible for ensuring that payment or reimbursement requests submitted by departments for non-cash award expenditures are made in accordance with the procedures set forth in this policy. A. Allowable awards 1. Work related awards a. Employee recognition 1) An employee's noteworthy work-related accomplishment may be acknowledged by the presentation of an item of tangible personal property of minimal value such as flowers, fruit, a book, or similar item; a ticket for a sporting or cultural event; a plaque; or a nonnegotiable gift certificate or gift card. To comply with IRS regulations, gift certificates and gift cards must be nonnegotiable (i.e., not redeemable for cash, no cash back if a purchase is less than the value of the card, no reduction of the balance due on his or her account with the issuer of the certificate/card). Not all merchants will work with nonnegotiable certificates/cards. Departments are responsible for verifying the merchant's policy before committing to the purchase of certificates/cards. 2) In addition, a one-month parking permit or transit pass may be presented as an employee recognition award. Under IRS regulations, up to a total of $175 a month of parking and up to $65 per month for transit passes may be excluded from an employee's income. 3) Employee recognition awards with a value in excess of $75 require exceptional approval. 4) Employee recognition awards are meant to be occasional and therefore must be presented to an employee on an infrequent basis. Awards presented to an employee on a regular or routine basis do not meet the IRS test for exemption and are not allowable. In order to meet these requirements, awards in this category should be provided within an established recognition program and based on objective criteria and must be presented to employees on a nondiscriminatory basis. (See PPSM Policy and Procedure 34.) b. Length of service An item of tangible personal property (allowable value up to $400) may be presented to an employee for length of service contributions to the University. Such awards are subject to the following limitations: 1) The award must be given for length of service achievement; 2) The recipient must have completed at least five years of service; and 3) The recipient must not have received a similar gift in any of the prior four years. c. Retirement An item of tangible personal property may be presented to an employee upon his or her retirement, subject to the dollar limits specified in b, above. The awards described in b and c, above, must be awarded as part of a meaningful ceremony and should be not determined based on an employee's classification. 2. Sympathy gifts Gifts of tangible personal property, such as flowers, may be presented as an expression of sympathy in the event of the death or major illness of an employee or a member of the employee's family or household. The cost of such gifts is limited to $75, unless exceptional approval is obtained. B. Unallowable awards Any award that would be taxable is unallowable. Expenses for such awards cannot be reimbursed from any fund source or approved as an exception to this policy. Examples of unallowable awards under this policy include the following: 1. Cash or negotiable gift certificates (but see PPSM Policy and Procedure 34 for cash awards). 2. Parking permits in excess of $175. 3. Transit passes in excess of $65. 4. Length of service or retirement awards in excess of $400. 5. Recreation memberships. 6. Season tickets to sporting or cultural events. C. Funding sources 1. Expenditures for employee awards may be charged to State funds. Various non-State funds under University control (e.g., endowments, gifts) may be used for employee awards in accordance with this policy and subject to any restrictions on the funds. State or Federal funds may not be used to pay for sympathy gifts. 2. The terms set forth in an extramural award shall govern, when such terms are more restrictive than University policy. 3. If Federal funds will be charged, directly or indirectly, the Extramural Accounting Division must review the charges to ensure that the requirements of OMB Circular A-21 and Cost Accounting Standards are met. D. Payment or reimbursement procedures Departments are encouraged to use their purchasing card to purchase employee non-cash awards or sympathy gifts within the terms and dollar limits set forth in this policy. All exceptions and requests for reimbursement of out-of pocket expenditures must be processed on a DaFIS Direct Charge document, and a DaFIS Request for Document Action form must be submitted to Accounts Payable. Any expenses in excess of $75 must be supported by original receipts. V. Reference and Related Policy A. Business & Finance Bulletin G-41, Employee Non-Cash Awards. B. Personnel Policies for Staff Members, Policy and Procedure 34, Incentive Awards. Copyright © 2006 The Regents of the
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