Buying and Paying
Effective June 18, 2020: The University has provided guidance for pandemic related expenses. Learn more on the COVID-19 Business Operations page.
This policy defines an allowable business expense as a necessary, reasonable, appropriate, and allowable noncompensation expense incurred for a valid business purpose to fulfill the mission of the University. While such allowable expenses may be eligible for payment by University funds, other funding sources may have more restrictions. The policy provides criteria for determining an allowable or unallowable expense, and provides lists of common expenses.
This policy also lists substantiation and original receipt elements required to pay allowable business expenses. In general, this policy ensures appropriate use of University funds in support of its mission, follows Generally Accepted Accounting Principles (GAAP), and complies with federal, state, local rules, and regulations.
II. Who is Affected by this Policy
This policy affects all employees, students, and independent contractors purchasing goods or services for noncompensation business expenses. It also affects every employee or individual who reviews, approves, or records financial transactions on behalf of the University.
An expense that is suitable or fitting for a particular valid business purpose.
A necessary, reasonable, and appropriate expense incurred for the primary benefit of University business and therefore permitted to be reimbursed or directly charged based on the permission of the University or by the terms of federally or privately sponsored agreements.
Generally Accepted Accounting Principles (GAAP)
Fundamental principles of accounting that are used as guidance in the preparation of the University financial statements.
Minimum purchase or service required to achieve a particular business objective.
Written or typed information that is required on the receipt, expense reimbursement form, or other document.
The original merchant receipt or invoice issued by the supplier or service provider to document and substantiate the business transaction. A digital image of the original receipt is allowable provided that it is legible and the paper receipt is destroyed.
An expense that is ordinary and reflects a prudent decision to incur the expense on behalf of University business. Not extreme or excessive.
Documentation to support an incurred business expense that includes the original receipt, documentation of business purpose, names of persons in attendance, and appropriate expense report for the incurred cost.
Criteria for Determining an Allowable Expense
In order to be paid directly by the University or reimbursed to an individual, a business expense must be:
- Necessary to perform a valid business purpose fulfilling the mission of the University; and
- Reasonable in that the expense is not extreme or excessive, and reflects a prudent decision to incur the expense; and
- Appropriate in that the expense is suitable and fitting in the context of the valid business purpose; and
- Allowable according to the terms of any federal regulation, sponsored contract, or University policy.
An expense is necessary if there is a valid business purpose required to fulfill the mission of the University. The primary benefit of a necessary business expense is the University, not the individual. A necessary expense is a minimum purchase or service required to achieve a valid business objective.
Reasonable means the amount that normally would be spent in a specific situation. An expense is considered reasonable if it is not extreme or excessive and reflects a prudent decision and action to incur the expense. The Business Expense Policy does not define precise dollar amounts for what constitutes reasonable, because the reasonableness of an expense depends upon many relevant factors including the business purpose, the context, the source of funds, and the circumstances surrounding the expenditure.
The federal government has given specific guidance on the definition of reasonable expenses, which must be applied when determining whether a cost is allowed to be charged to federal funds. This description should be used as guidance about reasonable expenses charged to University funds. The federal Office of Management and Budget Circular A-21 §C.3. states:
- A cost may be considered reasonable if the nature of the good or services acquired or applied, and the amount involved therefore, reflect the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made. Major considerations involved in the determination of the reasonableness of a cost are: (a) whether or not the cost is of a type generally recognized as necessary for the operation of the institution or the performance of the sponsored agreement; (b) the restraints or requirements imposed by such factors as arm’s- length bargaining, federal and state laws and regulations, and sponsored agreement terms and conditions: (c) whether or not the individuals concerned acted with due prudence in circumstances, considering their responsibilities to the institution, its employees, its students, the Federal Government, and the public at large; and (d) the extent to which the actions taken with respect to the incurrence of the cost are consistent with established institutional policies and practices applicable to the work of the institution generally, including sponsored agreements.
Costs are appropriate if they are suitable or fitting for a particular business purpose. In order for a cost to be appropriate it is also presumed that there is a valid business purpose, which is normally the responsibility of the department or program to determine.
The following questions should be considered when determining the appropriateness of costs:
- Could the cost be comfortably defended under public scrutiny?
- Would you be confident if the cost was selected for audit?
- Would you be comfortable reading about it in the newspaper?
- Would you be comfortable explaining to a donor that their donation was used this way?
- Has it been adequately documented?
If an expense is necessary, reasonable, and appropriate, the University considers it an allowable expense.
Federal regulations use the same criteria, as a rule. In addition, federal regulations contain categories of expenses that are unallowable as either direct or F&A (indirect) costs. For example, while alcohol and entertainment costs may be allowable as University expenditures, these costs are expressly prohibited by regulation on federal grants and contracts, and therefore, are always unallowable.
The policy provides criteria for determining an allowable or unallowable expense, and provides lists of common expenses. These lists are intended to be informative, but not all-inclusive:
- Allowable Expenses
- Unallowable Expenses
- Unallowable Expenses - Federal Funds
University funds may be used for allowable business expenses that support the mission of the University. Such allowable expenses may be directly charged to University funds through acceptable buying and paying methods or may be reimbursed. Please see the lists below for common expenses that are allowable or unallowable by the University.
Similarly, federally allowable expenses may be directly charged to or reimbursed from University funds. Federal sponsored awards are more restrictive regarding allowable expenses. Please see the lists below for common expenses that are allowable or unallowable for federal funds.
This Business Expense Policy forms the foundation for determining allowable expenses. Please see these related policies and documents for more details:
- Travel Policy
- University Credit Card Policy
- Reimbursement Policy
- Computer Equipment Policy
- Mobile Communication Devices Policy
Direct vs. Indirect Cost
Allowable expenses might be eligible to be charged directly to University or specific federal project awards, or they might be eligible to be charged only as an F&A or indirect cost. For further information, please see the related policy Direct and Indirect Costs on Federally Funded Sponsored Projects and Programs.
The list below highlights commonly allowable expenses, but is not intended to identify every allowable business expense:
Advertisements - Recruiting employees, acquiring goods and services, and disposing of surplus equipment are examples of ads that are appropriate for advancing the interests of the University.
Appliances in Common Areas - These are allowable if they are available to all in the department and do not require special installation conditions.
- Employee Groups: It is occasionally permitted to provide modest awards (e.g., shirts, cups, caps) to members of a working group to recognize membership in a team effort and to encourage camaraderie among team members.
- Employee achievement: The items awarded must be of nominal value and consistent with the contribution that the award is intended to recognize. Such programs must be approved in advance by the Office of the Dean of the Faculty or the Office of Human Resources depending on the staff involved.
- Car Service - Please see Travel Policy.
- Cash Payments (or Cash Equivalents) to Study or Survey Participants - These are allowable only if approved by the Human Subjects Committee of the University Research Board. Cash or cash equivalent awards made as part of official University programs are treated as taxable compensation and paid through payroll. Because of IRS regulations, cash or cash equivalents (such as gift cards, gift certificates, or points on a University card) are not appropriate as gifts or awards.
- Computing and Communications
- Internet Service Connection to Home Offices: These lines are as common as telephones today and as a rule should be considered a personal expense unless there are circumstances that clearly link these expenditures solely to a faculty member’s research. The circumstances must be documented and be approved by the Department Chair.
- Mobile Communication Devices: See Mobile Communication Devices Policy.
- Conferences and Meetings Hosted by the University - Expenses for food and beverages provided during a University-hosted conference or meeting are allowable when associated with business activities. The cost should be reasonable, based on the number of people attending. Request for payment for such meetings should include the names of participants and their functional titles or affiliation (individual or group).
- See the Charitable Donations by the University Policy.
- Food - Business Meeting Meals, Office Social Events
- If schedules require that meetings be held over a meal time, the cost of the meal is an allowable expense.
- The primary beneficiary of expenditures for food and entertainment should be the University. (If the food/entertainment is used as a reward or morale booster, these situations must be non-repetitive in nature.)
- The concept of reasonableness should apply to all food costs. Whether meeting on or off campus, the normal guideline for allowability would be the average cost of a comparable meal at a University facility, such as Frist or Prospect, or from Dining Services catering.
- As a rule, spouse/partner meals are not reimbursable. In all cases, a list of attendees including titles and affiliation, or identification of a discernible group, total number of attendees, and the business purpose of the meeting needs to be provided along with the original receipts in order to be reimbursed. Circumstances where a spouse’s (or guest’s) meal would be reimbursable as a business expense would be in the rare circumstance where the University requires the presence of a spouse/partner to further an institutional purpose.
- Coffee service, soft drinks, and bottled water: When made available to all members of a department and to visitors, these are expenses that may be incurred at the discretion of the department.
- Social Events - Occasional office parties, picnics or other social gatherings for faculty, staff, and students are acceptable. The cost of food should be reasonable. The catering rates established by Dining Services are the appropriate benchmark. Door prizes or favors to a maximum value of $10 may be distributed. A favor is defined as "a small gift given to each attendee at a party.”
- Departing employees: These may be given to terminating or retiring employees. The amount should be reasonable, equitable and commensurate with length of service and the nature of the position and conditions of the departure. An amount of $25 per year of service would be reasonable. This amount can be increased gradually to $50 per year of service for thirty or more years. For service of thirty or more years, $1,500 to $2,000 would be considered a reasonable gift limit. In addition to a gift, it may be appropriate to have a celebratory recognition event (Please refer to the Social Events section above.) In the case of transferring employees, a special recognition event would be considered the appropriate form of recognition. In special situations, the appropriate Cabinet officer should be consulted. These gift limitations pertain to University funds only, and are not intended to limit the amount of voluntary co-worker participation. Gifts for departing employees should not be charged to government sponsored accounts or accounts subject to applicable restrictions. Because of IRS regulations, cash or cash equivalents (such as gift cards or certificates) must be treated as compensation and are not considered appropriate as retirement gifts.
- Employees associated with professional and personal events: A modest memento is appropriate to recognize a significant professional accomplishment such as a promotion, transfer or professional award. Gifts such as flowers or fruit baskets are appropriate to recognize a personal event such as the birth of an employee’s child, an extended illness, or the death of a family member (as defined by Human Resources Bereavement Leave Policy). In the latter case, a donation of equal value may be made to a charitable organization in lieu of flowers or a fruit basket. This includes gifts to educational accounts established for the benefit of children of a deceased employee.
- Nonemployees: Gifts of modest value may be given to individuals not employed by the University in recognition of events. These would most typically be to students, alumni, and friends who have provided volunteer service and leadership to the University. It would also include gifts to hosts when traveling. Shows of appreciation should be consistent with University policy.
- Host: In some circumstances a token gift to a host may be reimbursable in recognition of an event. A token gift to a host in lieu of lodging expenses is not an allowable expense.
- Licensing Fees - Licensing fees required to perform one’s University duties are allowable at the discretion of individual departments.
- Individuals: Memberships in professional associations related to one’s position at the University are allowable expenses at the discretion of the individual departments.
- University Memberships - These are allowable but require the approval of the Provost’s Office.
- Moving Expenses - Please see the Domestic Moving Expense Policy, which is administered by the Human Resources Department.
- Payment to Other Institutions - Expenses incurred by another institution involved in collaborative activity may be reimbursed based on an invoice or formal request for payment which specifies the purpose and nature of the expenditures. Such payments must be approved by the Office of Research and Project Administration (ORPA) if charged to a sponsored research account.
- Photos for Visiting Fellows - Departments may provide visiting fellows with a framed photo of all visiting fellows at the end of the academic year. The framed cost of each photo should not exceed $250 to $300.
- Prizes - Awards based on established criteria for academic achievement are allowable if approved by the Dean of the College or Dean of the Graduate School, as appropriate.
- Services Purchased and Consultant Costs - Payments may be made to outside individuals for services secured on a contract basis. If the provider is not a member of a firm or otherwise incorporated as a business, refer to the Independent Contractor Policy.
- Subscriptions - Appropriate publications and journals relative to the employee’s responsibilities and intended to increase business or educational knowledge are appropriate, as are a reasonable number of general interest publications for use in departmental reception areas.
- Thesis or Study Grants for Students - These are permitted and may be taxable to the recipient.
- Training - Training expenses on-site, off-site, and those utilizing online strategies are appropriate. For undergraduate or graduate degree programs, please refer to the Office of Human Resources: Staff Educational Assistance Plan.
- Vehicle Lease or Rental for Local Use - These are allowable but must be procured through Procurement Services.
- Field Research - In limited situations payment for services in the field that may require local currency (and no other payment method is available) may be reimbursed up to $500 per occurrence using the Payment Substantiation Form. Prior approval from Procurement Services is required and departments must provide adequate advance notice so that alternative payment methods can be explored.
The listing of unallowable business expenses is not intended to be all inclusive, but rather reflects examples of unallowable expenses for both University funds and federal funds:
- Advertisements - Personal advertisements relating to individuals are unallowable; e.g., congratulatory notices or notices that can be reasonably viewed as personal rather than departmentally oriented.
- Commuting - Employee travel to and from work is not reimbursable. If an employee elects to stay overnight, hotel or room fees incurred are not reimbursable. Exceptions due to unusual work requirements, deadlines, or the like may be approved in advance by the department head.
- Credit Card Fees - Annual fees on personal credit cards are not reimbursable, even if the card is used for business purposes.
- Gifts to Employees and Nonemployees - Gifts are not allowable except in the cases specifically identified in the Allowable list above. Gifts given on a holiday or other basis to employees, or others are prohibited. Gifts to vendors are prohibited. Gifts to employees from other departments for performance of routine support activities also are prohibited.
- Goods for Personal Use - These would include such items as individual coffee makers or similar small appliances.
- Late Payment Penalties or Interest Charges - Late charges or interest on personal credit cards that have been used to pay University related expenses are not reimbursable.
- Memberships - Personal, recreational, or athletic: Unless there is an approved business justification made at the level of senior Dean or Vice President, these are unallowable.
- Parking Tickets or Traffic Violations - These are not allowable, even if incurred while conducting University business.
- Personal Services for Employees and Nonemployees - These include child care, pet care, or similar activities.
- Political Contributions of Any Type - Both cash and other forms of support are prohibited.
- Repetitive Expenses - Expenses for an individual’s routine food, lodging, and commuting to the Princeton University campus are considered taxable by the IRS and cannot be paid by other than authorized salary disbursements.
- Sales Tax - The University reserves the right not to reimburse sales tax for a transaction that would have qualified for a sales tax exemption if it had been properly processed through the appropriate University channels.
- Sponsorship of External Teams or Other External Groups - Both cash and other forms of support are prohibited.
- Student Athletes - Please see the Athletic Department policy, which authorized allowable expenses according to rules from the NCAA governing “awards, benefits, and expenses for enrolled student athletes.”
- Stolen, Lost, or Damaged Personal Property - These are not reimbursable even if incurred while on University business or property.
Additional Unallowable Expenses - Federal Funds
Federally funded contracts and grants carry a specific list of rules and prohibited costs that cannot be directly charged to a sponsored account nor included in the Facilities & Administrative rate (F & A rate, overhead rate, or indirect cost rate) charged to such projects. The following expenses are specifically identified by the federal government as unallowable charges to federal funds:
- Advertisements - except that advertisements for recruitment, procurement of goods or disposal of scrap or surplus materials are allowable .
- Airfare for commercial carriers that is more expensive than lowest available discount or standard, except on documented case-by-case basis.
- Air travel by aircraft other than commercial carrier shall not exceed the costs of allowable commercial air travel
- Alcoholic beverages
- Alumni activities
- Bad debts
- Commencement & convocation costs
- Contingency reserve or provisions (i.e. amounts set aside for unknown events but not actually expensed)
- Cost sharing amounts claimed on research projects may not be included in overhead pools
- Defense & prosecution of criminal & civil proceedings, claims, appeals, and patent infringements resulting in a conviction, determination of liability or penalty
- Donated services and property except as depreciation
- Donations or contributions made by the institution
- Entertainment costs
- Executive and legislative lobbying
- Fines and penalties – except with authorization from a sponsoring agency
- Foreign travel without prior authorization and foreign airfare on non US Flag carriers
- Fund raising and investment management costs
- Goods and services for personal use
- Housing and personal living expenses
- Institution-furnished automobiles for personal use
- Insurance against defects
- Legal retainer fees without support of services rendered
- Lobbying – except for technical and factual presentations related to performance of a grant, contract or agreement (and these costs are to be separately identified)
- Losses that insurance could have covered
- Losses on sponsored agreements or contracts
- Medical liability (malpractice) insurance - except for research programs involving human subjects
- Memberships in civic, community, country club, social or dining club or organization
- Pre-agreement costs, defined as costs incurred prior to the effective date of the sponsored agreement, unless approved by the sponsoring agency
- Public relations, except in relation to sponsored agreements
- Rare books – museum type
- Selling or marketing of goods or services
- Severance pay in excess of institutional policy
- Travel costs of lodging and subsistence exceeding normal institutional policy
Capital Equipment and Supplies
Contracts with federal and private sponsors often stipulate how consumable supplies and capital equipment are purchased, inventoried, and reimbursed. Please see Buying & Paying: Suppliers & Contracts Policy, Buying & Paying: Capital Equipment Policy, and Direct and Indirect Costs on Federally Funded Sponsored Projects & Programs Policy for details on the regulations.
University Funds - Individual Faculty Research Accounts
The University will, on occasion, assist in the research efforts of faculty members by granting an individual research account to be used to reimburse allowable expenses. Funds in these research accounts are intended to pay for research related expenses such as the purchase of books and other research materials including databases and software, the employment of research assistants, payment of subventions, payment of translation expenses for research materials, research-related travel, and other research-related expenditures.
Expenditures from these University-funded faculty research accounts are expected to directly tie to the faculty member’s research activities. These accounts should never be used as a catch-all to cover expenditures made by faculty members for expenses not related to research. For example, funds may not be used to purchase personal computers and similar devices that would remain in possession of the faculty member. Any personal computer or other durable equipment that is purchased from a research account remains the property of the University. Research-related books and computer software are considered to be nondurable. Funds may not be used to purchase home office equipment such as desks, chairs, book cases, wastebaskets and so forth. These are considered personal expenditures and reimbursement will not be permitted.
Faculty members should apply the Business Expense Policy to requests for reimbursement regardless of whether the funds are from a general University account or from their individual University research account.
THE BASIC TEST FOR THE ALLOWABILITY OF A CHARGE TO AN INDIVIDUAL FACULTY MEMBER’S RESEARCH ACCOUNT IS THAT THE PRIMARY BENEFICIARY OF THE EXPENDITURE MUST BE THE UNIVERSITY.
Any expenditure not directly related to the faculty member’s research must be approved by the Dean of the Faculty before it can be charged to the University funded research account. Please see the Dean of Faculty website for more information.
Allowable Research-Related Expenses
As with the criteria governing sponsored research, the underlying criteria for allowability of a cost charged to an individual faculty member’s research account is reasonableness and benefit to the University. As a general rule, the guidelines for determining permitted University expenses also apply to those expenses from individual faculty research accounts. When directly related to a faculty member’s research work, the following expenses are allowed:
- Research-related books and periodicals (not personal books and periodicals)
- Books authored by the faculty member purchased to give to others, limited to 75 copies when purchased with University-funded research funds
- Research materials such as data bases
- Xeroxing or copying of research materials
- Subventions to publishers to allow the publication of research books or monographs
- Creation of drawings, maps or other materials that will be included in a research publication
- Employment of research assistants
- Payments to research subjects (in all cases where the faculty member is engaged in such work, the University human subjects committee must approve the project beforehand).
- Travel including travel to conferences and research locations. Please see the separate Travel Policy.
- Membership fees for professional societies
- Conference registration fees
- Software that will assist the faculty member in undertaking their research
- Mobile Communication Devices – See Buying & Paying: Mobile Communication Devices Policy.
University policies attempt to ensure that individuals neither gain nor lose when acting on behalf of the University. There will be instances when a faculty member may gain an incidental or perceived benefit from an expenditure whose primary purpose is the furtherance of the University’s mission. Charges in such circumstances are allowable and non-taxable so long as the benefit to the individual is de minimis and the preponderance of the benefit accrues to the University.
Allowable if Approved by the Department Chair and/or Dean of the Faculty
Some expenditures associated with research are unique and resist easy classification. University research funds are intended to benefit the University so in cases where faculty members are scheduled to terminate their employment at the University, special care should be taken to ensure that the primary beneficiary of all expenditures is the University and not the institution to which they will soon be taking up employment. Should you have any question concerning the reimbursability of a research expenditure, please contact the Office of the Dean of Faculty.
Any expenditure not directly related to the faculty member’s research must be approved by the Dean of the Faculty before it can be charged to the University funded research account.
Prohibited Research Expenses
Research accounts are not “expense accounts” to cover personal expenses. The below listed expenses are disallowed. Please note that any item that is prohibited by the Business Expense Policy as an expenditure is also prohibited from University-funded research accounts.
- Personal expenses
- Commuting: Employee travel to and from work.
- Credit Card Fees: Annual fees on personal credit cards are not reimbursable even if the card is used for business purposes.
- Gifts to Employees and Nonemployees: Gifts for any reason except those previously identified as being permitted are prohibited. This includes gifts given on a holiday or other basis to employees, or others.
- Goods for Personal Use: This would include such items as individual coffee makers or similar small appliances.
- Late Payment Penalties or Interest Charges: Late charges or interest on personal credit cards that have been used to pay University related expenses are not a covered expense and are not reimbursable.
- Memberships - Personal, Recreational, or Athletic: Absent an approved business justification made at the level of Dean or Vice President, these are not allowable.
- Membership in Airline Club
- Moving and storage of personal goods while on leave
- Moving of automobiles to leave locations
- Parking tickets or traffic violations: These are not allowable even if incurred while conducting University business.
- Personal Services for Employees and Nonemployees: These include child care, pet care, or similar activities.
- Political Contributions of Any Type: Both cash and other forms of support are prohibited.
- Sales Tax: The University reserves the right to not reimburse sales tax for a transaction that would have qualified for a sales tax exemption if it had been properly processed through the appropriate University channels.
- Sponsorship of external teams or other external groups
- Stolen, Lost, or Damaged Personal Property: These are not reimbursable even if incurred while on University business or property.
Meal examples: When a meal is charged to an individual research account, the faculty member needs to think how this meal directly relates to her/his research activities. Nonrepetitive meals purchased for staff to raise morale or celebratory in nature are allowable if tied with some event directly related to the research. If meals are repetitive in nature such as periodic research group meetings over a pizza lunch, to be reimbursable, it needs to be clear that these meals are research related and not social in nature. If a meeting must be scheduled over lunch or dinner because of scheduling or time constraints, the meal would be allowable.
Research material examples: The purchase of books and periodicals should tie directly to research programs. The concept of who benefits most, the individual or the University should be used for questionable cases. Therefore, the purchase of a Wall Street Journal subscription for individual use would in most cases be considered personal use and not reimbursable unless the research agenda of the faculty member is directly related to the content of the Journal. While some article very rarely might relate to research, over the course of the subscription it is the individual who benefits most and hence the expenditure should be considered personal. This does not preclude the purchase of a department copy of newspapers such as the WSJ from a general (not research) University account.
Moving and storage of personal goods during leave: The moving and storage of personal goods while on a leave of absence is considered a personal expenditure and cannot be charged to individual faculty research accounts or departmental accounts. If a faculty member ships research-related books or other research materials that are intended to be used during the leave, these shipping expenses may be reimbursed from the research account. The University will not pay for automobile shipping from individual research accounts.
Substantiation and Receipts
“Substantiation” describes the set of written documents that support an incurred business expense. Substantiation consists of the original receipt, notation of business purpose, names of persons in attendance (when applicable), and expense report for the incurred cost. Allowable business expenses must be properly and adequately substantiated in order to be paid or reimbursed.
Receipts for all expenditures greater than or equal to $50 are required. Receipts for expenditures less than $50 should not be submitted. If sponsor requirements are more restrictive, the more restrictive receipt requirement will take precedence. If a required receipt has been lost, a missing receipt affidavit must be submitted.
Other Guidance and Examples
Guidelines regarding food and beverages costs during business conferences and meetings:
It is presumed that conferences and meetings are normally scheduled during regular business hours that do not conflict with regular meal times. However, if schedules require that meetings be held over a meal time, the cost of the meal is allowable, assuming the costs are reasonable. In such circumstances, an applicable guideline to follow for food and beverage expenses, whether incurred on or off campus, would be the average cost per person of catering through Dining Services or at a University dining facility such as Frist or Prospect House. Catering prices can be found on the Dining Services website at http://www.princeton.edu/facilities/dining_services/catering/. While there are a wide range of food choices and prices, the particular business purpose, the funding source, the context and the circumstances of the meeting would all be relevant factors in determining the reasonableness of the expenditure.
Beyond the cost per person of the meal itself, the following guidelines would also be prudent to consider: Participants at business meals should be limited to the minimum necessary to achieve the business purpose. Food and beverages should be ordered for the precise number of participants, rather than over-ordering for purposes of offering multiple choices. Since business meals always require additional time and financial resources, their use should be limited. It would be unreasonable for a department to schedule or an individual to participate in business meals on a daily or even on a multiple times per week basis. It would be reasonable to provide simple snacks and beverages when meetings are scheduled to exceed 2 hours. It would be reasonable to provide dinner for employees that are required to work late through dinner time.
- The top candidate for a department leadership position is on campus for a full day of final interviews. It would be reasonable for the hiring manager to take the candidate to dinner at a nice restaurant in Princeton at a cost of $50 to $75 per person.
- A department head would like to recognize a group of employees who have successfully completed a challenging project. The group is taken to lunch a nice restaurant in Princeton at a total cost of $25 to $40 per person which is considered reasonable. It would be appropriate to order alcoholic beverages at a celebratory luncheon and a cost of $5 to $15 per person would be considered reasonable.
- A project funded by a government sponsor is hosting an all day conference with a large group of participants from the University as well as guests from other institutions. The project team decides to cater the event on campus through Dining Services. The team selects breakfast at a cost of $6.50 per person from menu choices ranging from $5.25 to $10.50 per person. The team selects lunch at a cost of $20 per person from menu choices ranging from $12 to $23 per person. These choices would be considered reasonable. The team decided against other catering options that were available with prices of up to $40 per person.
- An employee with 35 years of service at the University is retiring. A gift with a value of up to $1,750 ($50 per year for 35 years service) would be considered appropriate and reasonable.
- An employee with 10 years of service at the University is transferring to another University department. A recognition luncheon or dinner costing $250 to $500 (based on $25-$50 per year of service) would be considered appropriate and reasonable. A gift in the amount of $500 would not be considered appropriate for a transferring employee.
6/23/20 - Updated Summary to include note of COVID-19 Business Operations, and guidance for pandemic related expenses.
2/20/19 - Updated name of department to Procurement Services from Purchasing Services.
10/1/18 - Updated executive sponsor listing.
6/28/18 - Updated to include reference to Charitable Donations by the University Policy.
2/23/17 - Updated to include reference to Computer Equipment Policy and Mobile Communication Devices Policy.
3/13/14 - Purchase limit increased to 75 books authored by faculty member purchased with University-funded research funds.
12/9/13 - Added Allowable Expense #23 for limited field research expenses.
9/17/13 - Clarified allowable computing & communications expenses by adding "solely" after expenditures, and deleted "extenuating" before "circumstances."
2/25/11 - No change to policy or substance; revised organization and language for web-based policy library. “Expense Guidelines” document was separated into four policies: Business Expense Policy, Credit Card Policy, Travel Policy, and Reimbursement Policy.
5/14/10 - For expenses related to business meeting meals, a detailed business purpose for the meal is required along with proper listing of attendees.
11/1/04 - Approved.