Travel, Meals & Entertainment Expenses
One category of costs that should receive special attention is entertainment and meals expenses. In general, entertainment expenses are not allowable on sponsored research awards. The allowability of entertainment expenses on non-federal sponsored research awards depends upon the guidelines of the specific sponsor. Entertainment has been loosely defined by OMB (Office of Management and Budget) Circular A-21 as "Costs incurred for amusement, social activities, entertainment, and any items relating thereto, such as meals, lodging, rentals, transportation, and gratuities, are unallowable." The following guidelines should be used in determining the allowability and categorizing of expenses for meals, lodging and social activities on sponsored research awards:
Alcoholic Beverages are not allowable on sponsored research awards unless specifically authorized in the approved budget and consistent with the purpose of the award. The instances where alcohol is approved in the budget are extremely rare. Unless allowed by the sponsor, Alcohol purchased during meals, travel, conferences or meetings should be deducted from the amount to be charged to a sponsored research award, a department GL Account should be charged for the Alcohol in this instance. When Alcohol is allowed on a sponsored research award by the sponsor, the designated Expenditure Type for this type of expense should be charged.
Reasonable and actual out-of-pocket expenses incurred while traveling to a scheduled meeting are allowable when the travel will provide direct benefit to the award. Allowable expenses related to travel include meals for the individual. Guest meals are not allowable and should be not be charged to the sponsored research award. Travel expenses should be charged to the appropriate travel account code.
Meals for subjects and patients under study are allowable when included in the approved budget. Meals for research subjects should be charged to the appropriate Expenditure Type. Certain meals that are an integral and necessary part of a conference (i.e. working meal where business is transacted) and are associated with a sponsored research award that has been designated as a Conference Grant by the sponsor is allowable. Meals that are provided to key participants during an all day scheduled meeting with an agenda are allowable. A conference is generally defined as "A symposium, seminar, workshop, or any other organized and formal meeting lasting 1 or more days where persons assemble to exchange information or clarify a defined subject. Meals for guests not attending the conference are unallowable. Allowable expenses for "working" meals associated with an all day conference should be charged to the appropriate account code.
Costs associated with recruitment of personnel generally are allowable, but you should confirm with your Post Award Administrator for that particular sponsored research award. These allowable recruitment costs include help wanted advertising costs, travel costs to pre-employment interviews incurred by applicants, and travel costs of employees while engaged in recruiting personnel. Guest (other than the applicant and Principal Investigator) expenses are unallowable.
Sponsored research awards may be used to cover the costs associated with travel and entertainment, i.e. transportation, meals, and lodging. However, there are a number of factors that enter into approval of sponsored research awards to cover travel and entertainment expenses, here are those factors:
- The awarded proposal must have explicitly stated an amount and justification for the travel, this will translate into a budget category for travel when the sponsored research account is established.
- The expenses incurred related to travel and entertainment must be fully documented and explicitly stated in the Drexel University Travel Policy.
- The expenses incurred related to travel and entertainment on a federally sponsored research award must conform to federal regulations.
Sponsors may have more explicit policies covering reimbursement of these expenses. The Department Administrator and Principal Investigator are advised to study the sponsor's travel policy as well as the full Drexel University Travel Policy. If further clarification of these policies is needed, please contact your Post Award Administrator.
In addition to insuring the allowability of expenses on sponsored research awards, it is very important that those persons responsible for departmental accounts insure that expenses are properly classified into the correct account codes. Important audit information is derived from all accounts (both GL Accounts and Sponsored Research Accounts).
Meals provided to participants of an all day conference or working meeting should include the following documentation:
- List names of the attendees
- Include statement that specifies the nature of the business conducted during the meal, why the meal was a necessary part of the conference and explain how it directly benefited the sponsored research award
- Attach copy of the conference agenda
Examples of Entertainment and Meals Situations
The following are examples of common situations that arise on sponsored research awards. These examples are intended as a guideline for determining the classification and allowability of expenses. We realize that the guidelines are subject to interpretation on a case-by-case basis. Please call Office of Research for questions regarding a specific case.
- The institution invites a renowned scientist to deliver a paper directly related to a sponsored research award. The Department of Pathology provides coffee and cookies during a break before a related question and answer session. The cost of the refreshments are not entertainment and should be allowable on a sponsored research award, so long as they are reasonable. They are associated with a meeting where the predominant purpose is the delivery of information regarding a related sponsored research award.
- After the meeting, the dean of the Medical School holds a reception for the scientist where beer, wine and hors d'oeuvres are served. These costs are considered entertainment and generally unallowable on sponsored research award.
- Instead, the dean takes the scientist and his department chair out for dinner. Alcohol is served. This is also considered entertainment, and is not generally allowable on a sponsored research award.
- The College puts this scientist up at a local inn after the talk. The costs of subsistence would be allowable on a sponsored research award where the principal purpose of the meeting like this, was dissemination of technical information.
- The Physics Department receives a sponsored research award to hold a symposium for leading scientists to discuss a new particle. In its sponsored research proposal, the Department listed the activities it planned to conduct, and the sponsored research proposal specifically provided for a working dinner the night before. This would be allowable on the sponsored research award since there was such a specific provision.
- From time to time, the Chemistry Department Chairman holds lunches for the members of her Department at the faculty club to discuss academic and research issues. Unless the primary purpose of the lunch is dissemination of technical information, as evidenced by a formal agenda, the sponsor would probably contend that the primary purpose was the meal, not the discussion (which could presumably have been held without the expenses); so the cost of lunch would be considered entertainment and generally not be allowed on a sponsored research award.
- Sufficient information to establish the business purpose of the travel, entertainment, or other expenditure
- Inadequate record of each expenditure, which would include the amount, date, and place
- Substantiation of expenditures with original receipts. In those instances when receipts are not available, travelers may "writeup" their own expense receipts on 3 x 5 inch cards by describing the activity and including the date, amount, destination and signature of the traveler. Use of write-up receipts should be limited to infrequent occasions when the documents are not available and is not a substitute forth original receipts. The University and Office of Research reserve the right to refuse reimbursement in cases where the write-up receipts appear excessive or inappropriate.
- The return of any unused monies from cash advances.
Domestic includes travel within the fifty United States, its territories and possessions as well as Canada. Domestic travel which is included in an awarded budget is generally allowable provided it supports the project, follows the rules of the University and, in addition if it is federally funded, travel must adhere to the Government’s requirements as defined in OMB Circular A-21, section 48.
Foreign Travel includes any travel outside of the domestic travel territories. Foreign travel on a federal grant requires that a US flag air carrier be used. For specific guidelines on this issue, click here to view the Fly America Act. Should there need to be an exception to this requirement, as may be the case with certain foreign destinations, the principal investigator and companion travelers are required to certify the reason for the exception on the Justification Statement. Please be aware that the lowest fare is NOT an acceptable reason.
All travel on sponsored projects using a Drexel University credit card requires the submission to Office of Research of a Drexel Travel Expense Reimbursement Report or a Drexel University College of Medicine Travel Reimbursement Report.