Policy on Appropriate Use of Funds

• Introduction

  Babson College funds come primarily from tuition payments from students and from gifts from College supporters and alumni. As a result, it is incumbent on all Babson employees to ensure that they spend College funds appropriately. In particular, it is important to ensure that expenditure of College funds for gifts, parties, and other amenities is appropriate and equitable in its impact on Babson employees and students. For example, historically some departments have routinely used College funds for parties and gifts for employees, while other departments have never done so.

• Purposes

  In light of the above, the purposes of this policy are to: 1) ensure that Babson College funds are used to support appropriate College business, 2) ensure the equitable treatment of employees, and 3) prevent inappropriate spending and the appearance of impropriety. The policy applies to all Babson College employees and any other person authorized to spend Babson funds.

• Application

  This policy applies to all expenditures of Babson funds, including PCards (see PCard Manual), advances, check requests, purchase requisitions, etc.

• Business Expenses

  In general, Babson funds should be expended for business purposes only. Business expenses are routine, operational in nature, and easily documented as College mission-based. They include faculty and staff salaries, classroom equipment and supplies, research and support, and campus and plant operation and maintenance.
  Business expenses also include expenditures for goods and services that help to build, strengthen, and promote relationships with groups and individuals, on or off campus. These may include travel, meals, and entertainment (as delineated in the Babson College Travel Policy, last revised July 6, 2011), certain recruitment and relocation expenses, and awards in accordance with College policy.
  Examples of appropriate and inappropriate expenditures are listed below. If a proposed use of funds is not listed, the following standards should guide the expenditure decision:
• For business meetings and entertainment/hosting functions, each College department, unit, and approving official must exercise prudent judgment to ensure that the commitment of College funds is appropriate, essential, and supports the College’s academic, institutional, or public service mission.
• The expenditure should not be personal in nature.
• For employees, the expenditure should not be used as additional compensation (the IRS considers gift cards or gift certificates “cash equivalents” to be treated as additional compensation). If the expenditure meets the IRS guidelines for “de minimis” fringe benefits, it is appropriate. See the IRS guidelines for De Minimis Fringe Benefits for more information.

• Examples of Appropriate Uses of Funds

• Meetings and College-Sponsored Functions

• College funds may be used to provide meals or snacks for meetings and functions related to College business. Expenses should be reasonable in nature and in occurrence. These include functions held by the President, division chair meetings, faculty and staff meetings, events sponsored or sanctioned by the Office of Student Affairs, new faculty/staff receptions, employee service award ceremonies, employee picnics, etc. Reduced cost lunches for faculty and staff (subsidized by the appropriate department budget) are also acceptable. Whenever possible, College dining services and facilities should be used for business meetings, hosting events, and receptions.
• College funds may also be used to purchase meals for employees during, or in recognition of, special circumstances, such as emergencies or workload “crunch” times. Managers should use their judgment to ensure that the expenditures are appropriate and not in support of routine activities.

• Alcoholic Beverages

  Use of College funds for alcoholic beverages is permitted only for approved campus events and for business meals as outlined in the Babson College Travel Policy. Exceptions must have prior approval from the appropriate College Vice President, Dean, or Department Head.

• Gifts

  College departments may incur a gift expense on behalf of an employee or an employee’s immediate family, only for the events listed below. There should be no more than one gift per division or department.

• Going Away and Retirement Receptions

  College funds may be used for reasonable low-cost food and non-alcoholic beverages for “going-away” receptions only with approval of the appropriate Division or Department Head or his/her designee. For employees retiring or resigning from Babson, the College, through Human Resources (HR), will contribute to the cost of a gift  in accordance with the Staff Retirement and Resignation Gift Policy. Please see HR to review this policy and eligibility criteria.

• Employee Recognition

  Use of College funds for employee gifts, prizes, and awards is appropriate, in accordance with the following guidelines: College-funded gift cards or certificates are not allowed due to strict IRS tax regulations, but tangible, personal property such as flowers, fruit or gift baskets, or Babson Campus Store “Spirit” items (e.g. apparel, clocks, pens, chairs) are acceptable, as long as they are approved by the appropriate Division or Department Head. A recommended limit for this gift is $75, in order to meet the “de minimis” fringe benefit requirement under IRS regulations. This amount may be supplemented by a manager’s personal contribution.

• Student Employee Appreciation

• Student employee appreciation events may be held and the use of College funds is appropriate for reasonable low-cost food and non-alcoholic beverages only with approval of the appropriate Division or Department Head.
• Tangible personal property or small token gifts to student employees at the end of their employment period are acceptable, provided they are reasonable and below the IRS de minimis benefit of $75. Examples of such gifts include flowers, fruit or gift baskets, and Babson Campus Store “Spirit” items (e.g. apparel, clocks, pens).
• College funded expenditures for gift cards or gift certificates to student employees as a token of appreciation for their work are not acceptable, per IRS regulations.

• Flowers

• Condolences
  Memorial gifts made because of the death of an employee, his/her immediate family member, or a student’s parent, may include flowers or a donation to a charitable organization. Condolence flowers may be paid out of the HR budget or paid by a department using a designated PCard. An immediate family member is defined as a spouse or partner, child, parent, or sibling. In such cases, the College should be acknowledged as the sender (e.g. ”from all your friends and colleagues at [Department/Division].”). A recommended limit for flowers is $100.00. This amount may be supplemented by a manager’s personal contribution or by personal contributions from fellow employees.
• Illness of Employee or Student Requiring Hospitalization
  A recommended limit for flowers is $100.00. This amount may be supplemented by a manager’s personal contribution or by personal contributions from fellow employees.

• Annual Holiday Parties

  College funds may be used for annual employee holiday parties, provided they are accessible to all employees within that department. The appropriate Division or Department Head will coordinate and approve all such events to ensure that celebrations are not duplicated within departmental business areas. Expenditures should be reasonable in nature, with a recommended limit of $25 or less per employee. This amount may be supplemented by a manager’s personal contribution or by personal contributions from fellow employees. While such events are important to building a sense of community, fiscal responsibility should also be a consideration in planning these activities.

• Examples of Inappropriate Expenditures

• Parties, Receptions, or Other Functions for Individuals

  College funds may not be used for non-work related, achievements, events, or receptions for individuals, such as baby showers, wedding showers, housewarmings, or similar activities that are of a personal nature and that are not related to College business. College funds may not be used to purchase individual gifts or gift cards/certificates for such personal celebrations. Spending for non-work related achievements, events, receptions, or gifts for individual colleagues should come from fellow employees. However, using college funds for reasonable low-cost food and non-alcoholic beverages and cards are acceptable for “group birthday celebrations” as part of a monthly departmental staff meeting.

• Alcoholic Beverages

  Except as noted above in Section V.b., College funds may not be used to purchase alcoholic beverages.

• Exceptions

• Gift cards or certificates may be used as thank-you gifts, prizes, or rewards only to:
• Non-employee guest speakers
• Student volunteers (e.g. tour guides)
• Non-employee students for campus-wide academic or co-curricular achievements, contests, or competitions; and to provide incentives for participation in student activities and events.
  Note: Students who also happen to be employees may accept gift cards or gift certificates as long as they are “outside of the employment relationship” at the time of receipt (e.g. contest or raffle at a student event). College funded expenditures for gift cards or gift certificates to student employees as a token of appreciation for their work are not acceptable, per IRS regulations. See Appendix for a list of recommended gift cards/certificates.
  Please see the Procurement Card Manual (Purchasing website) for more details, including limits on gift card amounts for non-employee students.
• Exceptions to this policy must be approved by the appropriate President’s Cabinet Member or his/her designee. The review of requests for exceptions will be based on the appropriateness, magnitude, and fairness of the proposed expenditure. An example of an appropriate exception would be rewarding employees who perform “above and beyond” expectations during a weather or health emergency on campus. However, such recognition should be presented at the discretion of the reporting manager or his/her designee.

• Consequences for Inappropriate Use of Babson Funds

  Employees who spend College funds inappropriately, as defined in this policy, as well as managers who approve such expenditures, will reimburse the College, and may also be subject to disciplinary action.

• Responsibility

• Supervisors, managers, department heads, etc. are responsible for ensuring compliance with the requirements of this Policy within their respective areas of responsibility.
• Prudent use of funds is the responsibility of every Babson employee.

Appendix: Recommended List of Gift Cards and Certificates

Acceptable gift cards and certificates (available at the Babson Campus Store):

• Follett
• Dunkin Donuts
• Retail Merchandise Stores (e.g. T.J Maxx, Marshalls, Kohls, Macy’s, J.C. Penney, Gap)
• Retail Restaurants (e.g. Chili’s, Panera, Bertucci’s)
• Movie Theaters (e.g. AMC, Showcase Cinemas)

Not Acceptable:

• Visa, MasterCard or American Express Gift Cards Redeemable for Cash

See the Mass Attorney General Retail Rights regarding Gift Cards & Certificates page for more information.