Arch's expenditure policy allows expenses that have a supportable business purpose and do not result in the personal benefit to any individual including employees of the University of Georgia. If it is determined that a UGA employee has derived personal benefit from an expenditure of Arch, that information will be reported to the University of Georgia Payroll Department and may be included in the employee's taxable income reported on their W-2. Arch follows the guidelines explained in Internal Revenue Service Publication 15-B (as revised annually). For policies related to non-employees, please see the section related to reporting income on IRS Form 1099 MISC Income. Given the time needed to compile this information from Arch expenditures, the period from November 1 to October 31 is used for taxable fringe benefit reporting for each calendar year ending December 31. Expenditures commonly considered to result in benefit to an individual include the following:

•     Scholarships/tuition for employees (NOTE: per UGA TAP policy, this type of expense must be paid directly through UGA)

•     Spousal travel that is not business-related

•     Travel on a chartered plane for employee's spouse and other family members, if certain qualifications are not met

•     Car allowances (to the extent not used for a business purpose)

•     Personal portion of social club memberships (social memberships as approved by Arch's Executive Committee)

•     Moving expenses not deductible under the IRS guidelines (NOTE: UGA Relocation and Moving Expense policy should be followed and Arch can only fund certain exceptions)

•     Immigration/visa fees

•     Personal/unauthorized use of Arch property

•     Athletic tickets for spouse (not related to business) / family of employee (including use of Sky Suites)

•     Entertainment tickets such as dinners, theatre, etc. not utilized for business purposes

•     Internet service provider fees (portion not used for business purpose) (NOTE: per UGA Telecommunications Policy, this type of expense must be paid directly through UGA)

Any tickets or payments on behalf of other family members or friends would qualify as a taxable fringe to the employee and would be reported to UGA Payroll Department and could have an adverse effect on the employee’s W-2 form or year-end paycheck. UGA Payroll Department will determine if any of the above items reported are considered fringe benefits to the employee and the effect it will have on that employee’s W-2 or paycheck. Arch complies with UGA policy by reporting all potential fringe benefit type expenses by employee each year by November 30th.

In some cases the amount considered taxable to the employee must be estimated based on percentage used for business and personal purposes, such as car allowances and reimbursements.

Please contact the Arch Office for questions regarding potential fringe benefits not listed above.

1. Moving and Relocation Expenses

The unit/department should follow UGA’s policy for Moving and Relocation and seek state funding first. All moving and relocation expenses must first be authorized by the UGA Compliance Office regardless of the funding source. Arch funds may be utilized for payment of approved expenses through a UGA Contracts & Grants restricted account funded by Arch.

Arch may pay for moving and relocation expenses as a direct reimbursement or vendor payment under the following exceptions provided a check request and all appropriate documentation is submitted and approved.

•     Expenses that exceed the offer letter limit per UGA policy

•     Expenses for employees of less than one year (i.e. visiting professors)

•     Interim period where an offer letter may not exist before the establishment of the new policy at UGA effective 02/01/2008

For these expenses, an approved check request with all appropriate documentation must be submitted to the Arch Expenditure Control Department.

2. Tickets

Tickets are the most common taxable fringe. These may include athletic or cultural events provided to employees who are not required to work the event and for which there is not clear business intent. Arch’s policy considers the employee’s ticket to be non-taxable if the employee’s attendance is required at the event. Any tickets or payments on behalf of other family members or friends who does not qualify as business relationship will be considered a taxable fringe and be reported to UGA Payroll Department.

The Arch Office – Expenditure Control Department will follow up with all ticket purchases with a Ticket Usage or Resale Form. This form must be completed and approved by the requesting unit/department and returned to the Arch Office as soon as possible after the event takes place.

3. Social Club

The non-business portion of any approved club dues and membership fees for social organizations are reported to the UGA Payroll Department annually like any other potential fringe benefit.

Social club dues and/or membership fees may be reimbursed or paid directly to the vendor on the same basis as the approximate percentage of business use. For club dues and memberships where the employee pays the personal portion direct to the vendor, there is no taxable fringe reporting required.

4. Automobile Policy

All car leases or purchases must be authorized by the President of UGA, and approved by Arch Executive Committee. Two different methods of reimbursement, a lease reimbursement or a car allowance, are allowed.

A. Leases: The vehicle is leased in the employee's name, and reimbursement is made to the employee at a monthly rate approved by the President. The monthly rate will also cover insurance and maintenance of the car. The business mileage reimbursement rate for a leased vehicle is currently .285/mile.

Payment Procedure: A check request, made payable to the employee or vendor, is submitted along with the original invoice indicating the lease amount not to exceed the approved monthly rate. Any reimbursement for maintenance and insurance should be submitted by a check request if the maximum monthly rate has not been reached. These payments will also be made payable to the employee and will require an original receipt.

B. Monthly Car Allowances: Payments are made to UGA for inclusion in the employee’s payroll. These payments are considered compensation. The business mileage reimbursement rate is at the full state rate which is currently .55/mile.

5. Gifts

Arch does not allow gifts to UGA colleagues or the purchase of gifts, flowers or other gratuities to be paid to University employees. This includes gift cards and gift certificates. The IRS considers gift cards and gift certificates as cash equivalent and thus must be included in the gross income of the recipient (this is true for non-employees as well).

When an employee leaves the University or unit/department, colleagues may solicit funding from other employees and friends to cover the costs of a party and/or gift. Arch does not allow reimbursement or payment for farewell parties. Funds collected may be deposited in Arch. Checks collected should be payable to The Arch Foundation for the University of Georgia, Inc. Arch does not treat these funds as contributions (no gift credit will be issued) and does not retain any of the funds raised. Arch will issue payment for the expense but this must be clearly documented on the check request that funds were collected and deposited in Arch.

NOTE: Retirement receptions are considered allowable expense assuming a unit has discretionary funds for funding the event. There are a few exceptions to the “no gift to employee” guideline.

•     Discretionary funds have been provided to the three Senior Vice Presidents of UGA for the sole purpose of funding gifts for key personnel upon departure from the University if approved by that SRVP (NOTE: Arch funds may be used to pay for the cost of a retirement reception).

•     Items of de minimis value (e.g. $15 per IRS) may be given in order to encourage attendance to special events or meetings; either the gift should be given to all who attend or the recipient should be randomly chosen such as a door prize (NOTE: expensive door prizes will be taxable and reported for employees and non-employees such as students).

•     Employee Achievement Awards such as length of service or safety awards may be given and are considered excludable if they satisfy certain requirements; length of service awards may be made only once every five years and should be awarded as part of a meaningful presentation emphasizing the employee’s achievement (NOTE: service awards cannot be made to part-time employees).