PPM Section 330-75

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Policy and Procedure Manual

Chapter 330, Financial Management and Services
Section 75, University Payment of Membership Fees
Approved: 7/2/03
Supersedes: 6/15/99

Responsible Department: Accounting and Financial Services
Source Document: Business and Finance Bulletin G-43, Policy on University Membership in Organizations

I. Purpose

This section outlines policy and procedure regarding payment of dues or other institutional fees with University-controlled funds.

II. Policy

A. Criteria

It is the policy of the University to consider membership in organizations that would promote the advancement of education and research, enhance the professional standing of its administrative personnel, and facilitate favorable campus-community relations.

1. Costs in relation to benefits shall be considered.

2. Membership in an organization must be used primarily for business purposes, i.e., activities that contribute to any one of the University's major functions of teaching, research, patient care, or public service.

3. University funds may not be used for payment of fees or dues to organizations that maintain legally impermissible, arbitrary, or unreasonable discriminatory membership policies or practices.

4. Payments shall not be made to support an organization's political action committee or to any organization whose primary activities include carrying on propaganda, or otherwise attempting to influence legislation, or participating or intervening in any political campaign on behalf of any candidate for public office.

5. Institutional rather than individual memberships shall be obtained whenever possible, as the former often allow participation by several or alternate employees. Individual memberships shall be purchased only if particular circumstances warrant an exception; the decision to grant an exception shall be based on an evaluation of the benefits to the University. In no case may more than one institutional membership in any organization be purchased on the campus.

6. Memberships and employee participation in community organizations should be held to the number necessary to achieve effective campus-community relations within a reasonable expenditure of funds.

7. Departments may purchase a membership in an organization to secure its periodicals if the periodicals cannot otherwise be secured. Such periodicals will become the property of the University rather than of an individual, and must be made available to all department faculty, staff, and students.

8. University libraries may secure periodicals for their collections that cannot be obtained except through membership.

B. Approval authority

1. When approving new or renewal memberships, the approving authority is responsible for evaluating the request to ensure that University funds are not being used to join organizations that are duplicative in function and membership or to renew memberships that are no longer worthwhile, and for designating those employees who will participate in the affairs of the organization concerned.

2. A DaFIS Approval Authorization or Cancellation form must be on file for individuals who have been delegated approval authority. (See Section 330-10.)

3. Employees with delegated approval authority shall not approve their own request for reimbursement of membership payments.

4. The Chancellor may approve the expenditure of University funds for membership in the following types of organizations.

a. Organizations of universities and colleges, including accrediting agencies (e.g., National Association of State Universities and Land Grant Colleges; American Association of Universities; Western Association of Schools and Colleges).

b. Social organizations (e.g., business, athletic, luncheon, sporting, airport, hotel clubs). This authority may not be redelegated. See D, below.

5. The Vice Chancellor--University Relations may approve the expenditure of University funds for membership in community organizations (e.g., Chamber of Commerce; Urban League).

6. Deans and vice chancellors may approve the expenditure of University funds for membership in the following types of organizations. Authority to approve membership requests may be redelegated to associate or assistant deans/vice chancellors or to department heads.

a. Organizations of professional schools and colleges, including accrediting agencies (e.g., American Society for Engineering Education; Association of American Medical Colleges). This delegation includes authority for payments of fees associated with the accreditation reviews.

b. Organizations of institutional service agencies and administrative officers (e.g., Institute of Internal Auditors; Western Association of College and University Business Officers; National Association of Student Personnel Administrators).

c. Scholarly societies (e.g., Modern Language Association; American Economic Association).

d. Memberships to receive periodicals (e.g., American Society for Testing and Materials; Association for Symbolic Logic; Council for Advancement and Support of Education). The University Librarian shall be informed of payments for such memberships.

7. Payments to organizations (other than social organizations) for purposes other than initiation fees, accreditation fees, dues, and reasonable cost of attendance must be specifically authorized by the Chancellor.

C. Funding

Payment of fees shall be charged to the budget of the particular office or department benefiting from the membership.

D. Memberships in social organizations

1. Membership in a social organization shall be approved only if it is determined that the primary use of the membership will be to conduct official University business and that the organization does not engage in discriminatory policies or practices. Such memberships shall not be paid with state or federal funds.

2. Approval of social organization memberships and payments for initiation fees and/or dues must be made in writing, with a copy to the Vice President--Financial Management, Office of the President. The letter must specify the time period for which membership is approved.

3. Payments for entertainment expenses incurred in connection with the use of a social membership are reimbursable in accordance with the procedures set forth in Section 330-80.

4. In accordance with IRS reporting requirements, a member's non-business use of a social club must be reported as compensation to the individual, as follows:

a. Reporting non-business use

1) An employee who has been granted membership in a social club will be required to report annually to Accounting & Financial Services his or her official University business use and non-business use. The Annual Report of Personal Use of a Club form is used for this purpose.

2) Accounting & Financial Services will calculate the value of the employee's non-business use based on the information reported on the Annual Report. The employee will be informed of the amount, using the Determination of Taxable Benefit--Club Dues. The portion of the dues allocable to non-business use shall be treated as additional compensation to the employee and included in the employee's income, subject to withholding for income and applicable employment taxes.

3) If the employee terminates his or her employment with the University or becomes ineligible to use the membership, any dues paid by the University related to non-business use must be reported by the employee to Accounting & Financial Services before the termination or ineligibility status becomes final.

b. Substantiating business use

In order to substantiate official University business use of a social club, the employee must maintain adequate records showing the total number of days of business and non-business use. In addition, the employee must substantiate his or her club entertainment expenses in accordance with Section 330-80, Entertainment with University-Controlled Funds.

III. Procedures

Responsibility	Action
Department	Initiates UC Davis Financial Information System (DaFIS) Direct Charge document; routes to department head for approval. If the department head is not a DaFIS user, he or she must approve (sign) for payment on the original invoice instead. Include in the Notes field a brief explanation of reason payment of fees is deemed necessary to the University. Include information as to the membership year and whether the fee is for an individual or institutional membership. Forward to Accounting & Financial Services a copy of membership application form or organization's billing for the fee, marked with the approved DaFIS document number. If fee was paid by the individual and after-the-fact reimbursement is requested, forward to Accounting & Financial Services a copy of membership application form and proof of expenditure in the form of a receipt or canceled check, marked with the approved DaFIS document number.
Department head	Reviews request, and: Approves DaFIS Direct Charge document or original invoice and, if required, ad hoc routes it to appropriate final approval authority (see II.B, above). OR Disapproves DaFIS Direct Charge document, or if not a DaFIS user, directs that the document be disapproved.
Approving authority	Reviews request, and: Approves DaFIS Direct Charge document or original invoice for issuance of check. OR Disapproves DaFIS Direct Charge document, or if not a DaFIS user, directs that the document be disapproved. Informs of University Librarian of approved memberships for periodicals.
Employee	For membership in social organization: Submits Annual Report of Personal Use of a Club to Accounting & Financial Services. AND Maintains adequate records showing the total number of days of business and non-business use of the club.
Accounting & Financial Services	Calculates the value of the employee's non-business use and informs the employee of the amount. The non-business portion will be reported on the employee's W2 form as taxable income.

IV. References

A. UC Business & Finance Bulletin G-43, Policy on University Membership in Organizations.

B. President's letter to Senior Vice President--Business & Finance: Delegation of Authority--Policies and Procedures on University Membership in Organizations (DA 2123), 7/24/01.

C. Senior Vice President--Business & Finance's letter to Vice President--Financial Management: Delegation of Authority--Policies and Procedures on University Membership in Organizations, 8/24/01.