Operating Procedures for Gifts, Gratuities and Recognition

These operating procedures support the policy on Gifts, Gratuities and Recognition (III.B.5). Please refer to the policy for definitions and contact information.

Effective date: September 1, 2024

Table of Contents

I. Gifts and Gratuities Offered to or Received by Employees

1. Monetary Gifts and Items of More than Nominal Value
   
   In the event it is not possible for a faculty or staff member to refuse or return a Monetary Gift of any amount or a tangible item of more than Nominal Value or it would be misconstrued as an offense to the giver, the employee must report the Gift to the VPEC, or designee, who will determine the final disposition of the Gift.
   
   
2. Criteria for Exceptions
   
   In certain instances, where a specific prohibition has not been made in the policy on Gifts, Gratuities and Recognition (III.B.5) or in these Operating Procedures, it may be appropriate for a faculty or staff member to accept a Gift, gratuity, benefit, favor or service from a Third Party as an exception. The criteria listed below must be met in order for an exception to be appropriate.
   
   
   1. Serves a legitimate business purpose;
   2. Meets customary industry practices and conventions;
   3. Is not lavish, frequent or substantially in excess of allowable per diems (for meals) or standard rates;
   4. Is not from a foreign source (as defined by the state of Indiana) that is located in or in any way associated with a foreign adversary (as defined by the state of Indiana); and
   5. Does not put the employee or the Third Party in a position of questionable ethical circumstance.
      
      
   In addition to the above criteria, sections I.C-I.E outline certain requirements that must be met in order for specific types of Gifts, gratuities and benefits to be accepted.
   
   
3. Meals, Beverages and Entertainment
   
   
   1. Faculty and staff members may not allow known Third Parties to pay for any of the employee's meals or beverages where the Third Party is seeking to influence the official conduct of the employee. Meals and beverages provided by a known Third Party who is not seeking to influence the employee's official conduct and that meet the criteria in I.B above may be accepted.
   2. Faculty and staff in attendance at a conference, convention, professional/career development program or other similar event may allow the cost of their meal and/or beverages to be paid for by a Third Party if the meal and/or beverages also are offered to other participants of the conference, convention or program.
   3. Faculty and staff members who are invited to attend a social engagement (e.g., dinner, gala, reception, banquet, etc.) or other event for entertainment (e.g., golf outing, sporting event, concert, trip, etc.) paid for by a known Third Party may accept the invitation only if the criteria in I.B above are met and:
      
      
      1. The Third Party will be in attendance at the event and
      2. The overall benefit from the employee's participation is greater to the University than to the individual employee.
         
         
      Faculty and staff are encouraged to consult with the VPEC, or designee, in advance of the event to determine whether any portion of the costs incurred on behalf of the employee must be reimbursed to the Third Party by the University.
      
      
4. Registration Fees for Conferences and Conventions
   
   
   1. Faculty and staff may not allow known Third Parties to pay for registration fees associated with a conference, convention, professional/career development program or other similar event when the Third Party is seeking to influence the employee's official conduct. The exception to this is when the employee is a presenter or speaker at the event.
   2. Any other exception must meet the criteria in I.B above and the benefit from the employee's attendance at the conference or convention must be greater to the University than to the individual employee. Faculty and staff are encouraged to consult with the VPEC, or designee, in advance of the event to determine whether the University is to reimburse any portion of the costs incurred by the Third Party on behalf of the employee.
      
      
5. Travel Expenses
   
   
   1. Faculty and staff may not allow a known Third Party to pay for or reimburse any of their travel expenses (e.g., lodging, transportation, meals, etc.) related to personal travel.
   2. Travel expenses associated with travel for University business by a faculty or staff member may be paid for, reimbursed by or otherwise covered by a known Third Party only when the criteria in I.B above are met and:
      
      
      1. The employee's expenses would otherwise be paid for by the University and
      2. The reason for the travel provides an overall benefit that is greater to the University than to the individual employee.
         
         
      Faculty and staff members are encouraged to consult with the VPEC, or designee, in advance of the trip to determine whether any portion of the costs incurred on behalf of the employee must be reimbursed to the Third Party by the University.
      
      
6. Honoraria
   
   An Honorarium given by a known Third Party to a faculty or staff member for an activity related to the employee's official duties or responsibilities at the University may be accepted as long as the employee is in compliance with the University's policies on Conflicts of Commitment and Reportable Outside Activities (III.B.1) and Individual Financial Conflicts of Interest (III.B.2). The employee may opt to request that the Honorarium be given directly to the University or transfer ownership of the Honorarium to the University.
   
   
7. Discounts
   
   An acceptable Discount from a Third Party is one that is:
   
   
   1. Offered uniformly to all employees of the University and is part of or negotiated through an established and recognized program or organization within the University.
   2. A component of the employee benefits package as offered and authorized by University policy.
   3. Offered uniformly to faculty and staff of any educational institution.
   4. Offered uniformly to state or government employees.
   5. Not related to employment with the University.
      
      
   Any other Discount offered by a known Third Party may not be accepted.
   
   
8. Records
   
   
   1. Faculty and staff members who accept an invitation to a social engagement from a known Third Party or allow a known Third Party to pay for any or all of their registration fees or business travel expenses without consulting the VPEC, or designee, may be asked to produce documentation supporting their decision to accept the Gift, gratuity or benefit.
   2. The VPEC and designee(s) will maintain records of all determinations made regarding the acceptance of Gifts, gratuities and benefits covered under the preceding sections in accordance with the record retention schedule for travel authorizations.

II. Giving Awards, Prizes and Gifts for Appreciation or Recognition

1. Considerations When Giving to Students
   
   
   1. Students may be subject to reduced financial aid if they accept an Award, Prize or Gift for appreciation or recognition from a college, school, department, office or other unit of the University. Therefore, prior to establishing a recognition program for Students or deciding whether to give a Gift of appreciation to a Student, the unit is encouraged to consult with the appropriate campus financial aid administrator to determine whether and what kind of Award, Prize or Gift may be given so as not to adversely affect a Student's financial aid.
   2. Student athletes who participate in intercollegiate sports are prohibited by NCAA/NAIA regulations from accepting certain Gifts, Awards and Prizes from their school. Therefore, prior to establishing a recognition program that includes Student athletes or deciding whether to give a Gift of appreciation to a Student athlete, the unit is advised to consult with the appropriate campus athletics compliance director to ensure that the Award, Prize or Gift is not in violation of the applicable athletic division regulations. This includes instances of recruitment, where the Student athlete has not yet accepted an offer of enrollment to the University.
      
      
2. Recognition and Appreciation Grid
   
   To clarify the allowability and tax implications for various types of Gifts, Awards and Prizes (i.e., cash, gift cards and tangible items), Appendix A includes a Recognition and Appreciation Grid that may be used for reference.
   
   

3. Establishing a Recognition Program

   1. Any request for a recognition program that does not meet all requirements of the policy and these procedures must be submitted in writing to the Comptroller for review and approval prior to the program’s inception.

   2. In order to be considered for approval by the unit head (vice president, vice chancellor, vice provost or dean), or designee, and the unit's business manager or fiscal approver, a recognition program must include all of the following documentation:

      1. The name of the recognition program.
      2. The recognition category (see options below).
      3. A description of who is eligible to receive the recognition, keeping in mind that there must be more than one eligible person.
      4. A clear and distinct description of the recognition criteria.
      5. An explanation of the selection method.
      6. A description of the recognition Award or Prize.
         
         
   3. Determine the appropriate category for the recognition program using the following guidance.
      
      
      1. Merit: Programs of this type recognize excellence, exemplary customer service, a quality deserving praise or approval or a demonstrated ability or achievement. Examples include:
         
         
         • Excellence in teaching.
         • Individual acts of excellence derived from personal initiative that have led to an increase in morale or efficiency of the organizational unit.
         • Demonstrated and ongoing excellence in service and leadership over a long period of time, which has led to the betterment of the organizational unit as a whole.
         • An identified group, team, unit or section within the organizational unit that has displayed exemplary teamwork, effectiveness, exceptional service or other accomplishments in support of the organizational unit's stated mission.
         • Provision of substantial assistance to the organizational unit or any of its members that is above and beyond the scope of normal responsibility.
         • Significant positive impact on the University community through the use of problem solving, partnership development or community service.
           
           
      2. Safety: Safety recognition may be given to employees for acts performed that are intended to prevent adverse effects related to danger, risk or injury. Only people in front line positions are eligible for safety Awards. Per IRS guidelines, this type of Award cannot be given to managers, administrators or clerical employees. In addition, no more than 10% of an organizational unit's employees (total employees of the organizational unit, not just those eligible to receive a safety Award) can be given a safety Award during a given calendar year.
         
         Examples of safety Awards include:
         
         
         • Acts of courage or heroism in which an individual risked their life in the performance of job duties.
         • Acts of excellence and effort derived from personal initiative that led to solving a major crime(s).
         • An act of bravery or self-sacrifice.
         • A life-saving situation in which, had the individual not acted, a person likely would have died (this example does not apply when the individual who saves the life of another carelessly or intentionally created the life-threatening situation).
         • An individual who is killed, wounded or seriously injured in the performance of an official action.
           
           
      3. Participation: Participation recognition may be given as a result of involvement in a University activity. 
         
         Examples include:
         
         
         • • Door Prizes for attending a University event.
           • An Award or Prize for completing a University survey.
           • Participation as a research subject.
   4. The following award programs were in place prior to the policy's issuance and are approved recognition programs, even though they exceed the $5,000 award limit: the Outstanding Undergraduate Teaching Charles B. Murphy Award, the Herbert Newby McCoy Award, the Raymond E. Plue Outstanding Teacher Award, the Kenneth T. Kofmehl Outstanding Undergraduate Teaching Award, the AA Potter Award, the CICP Faculty Commercialization Award and the Morrill Award. All of these awards are still subject to applicable tax implications as outlined in the Recognition and Appreciation Grid.
      
      
4. Giving Gifts for Appreciation or Stakeholder Relations
   
   
   1. In order to be considered for approval by the unit head, or designee, and the unit's business manager or fiscal approver, the following must be documented to justify the expenditure:
      
      
      1. The recognition category (appreciation or Stakeholder relations).
      2. A description of who will receive the Gift.
      3. An explanation of the business purpose for purchasing and giving a Gift to that individual(s) or entity on behalf of the University.
         
         
   2. Determine the appropriate category using the following guidance.
      
      
      1. Appreciation: Appreciation Gifts may not be tied to a life event (i.e., marriage, birth or adoption of a child, death, etc.). Examples of appropriate appreciation Gifts include:
         
         
         • Tangible items given to donors as a thank you for contributions to the University.
         • A staff appreciation meal hosted and attended by the unit head or their representative. Such events are infrequent, unique functions associated with a specific performance trigger and are not expected to occur more often than quarterly.
           
           
      2. Stakeholder Relations: Examples include:
         
         
         • Tangible items given to Stakeholders during a business meeting due to cultural expectations.
         • Tangible items given to Stakeholders in recognition of a personal achievement or honor.
           
           
5. Recording of Awards, Prizes and Gifts
   
   
   1. A full description of the transaction, including the business purpose associated with the Award, Prize and/or Gift, must be provided on the documentation used to record the expense.
   2. Use the following G/L codes to document the expenses associated with Awards, Prizes and Gifts:
      
      
      1. 531010, Awards: Non-scholarship
      2. 531015, Gifts and Prizes
         
         
6. Safeguarding Awards, Prizes and Gifts
   
   Organizational units must operate in a way that minimizes the risk of theft or damage to the Awards, Prizes and/or Gifts in their possession. This can be achieved through internal controls such as:
   
   
   1. Keeping an inventory of all Awards, Prizes and Gifts;
   2. Using locked bags, file cabinets, safes, etc., for storing the items; and
   3. Limiting the number of people who have access to the items.

III. Gifts and Gratuities Given to Foreign Public Officials or Foreign Public Entities

The payment of certain fees and expenses for foreign public officials or to a foreign public entity may be prohibited by the Foreign Corrupt Practices Act. Further, the state of Indiana prohibits the use of state funds and resources to engage or contract with, or to support the activities of, a foreign terrorist organization, a state sponsor of terror, or any individual associates with such a terrorist actor (referred to in these procedures as a prohibited person). The following categories of allowable payments or expenses are provided as a guide. In all cases, approval from the Senior Vice President for Partnerships and Online, or designee(s)—following consultation with the Office of Legal Counsel—is required prior to giving a Gift or gratuity to a foreign public official or foreign public entity. In no circumstance is any such payment or expense allowed in connection with engaging with, contracting with, or supporting a prohibited person. In addition, please refer to sections II.D and II.E above for appropriate documentation.

1. Facilitating Payments 
   
   Facilitating payments are payments made for the purpose of expediting or securing the performance of a routine governmental action, such as:
   
   
   1. Obtaining a copy of or expediting the processing of a permit, license or other official document or governmental paper (e.g., a visa or registration);
   2. Providing police protection;
   3. Delivering mail, or
   4. Providing necessary utilities such as phone, power or water.
      
      
   In addition, a facilitating payment must be:
   
   
   1. A non-discretionary fee;
   2. Routinely charged by the governmental entity;
   3. Allowed under the express laws, rules and policies of the foreign jurisdiction; and
   4. In denominations of less than $500.00 (individually or cumulatively).
      
      
2. Permissible Expenses
   
   Permissible Expenses must be:
   
   
   1. A reasonable and bona fide expense;
   2. One that is consistent with the University's policy on Gifts, Gratuities and Recognition (III.B.5) and does not otherwise violate these Operating Procedures; and
   3. Directly related to the performance of a contract to which the University or any of its subsidiaries or affiliates are a party.
      
      
   Reasonable and bona fide expenses that are directly related to the demonstration or explanation of University services, academic or research expertise, or programs offered by the University or any of its subsidiaries or affiliates may be appropriate in some cases.

IV. History and Updates

September 1, 2024: Updated language in sections I.B and III to align with recently amended Indiana law. Added reference to research subjects in section II.C and updated title of Senior Vice President for Partnerships and Online.

August 17, 2016: Added list of approved recognition programs, included procedure for approval from Comptroller for recognition program exceptions and clarified payment method of cash and checks to enrolled students in Appendix A.

April 1, 2016: These operating procedures established in support of the policy on Gifts, Gratuities and Recognition (III.B.5).

V. Appendix A: Recognition and Appreciation Grid