The Foundation’s expenditure policy allows for 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 the Foundation’s Expenditure Control department determines that a UGA employee has derived personal benefit from an expenditure of the Foundation, 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. The Foundation follows the guidelines explained in Internal Revenue Service Publication 15-B (as revised annually). For policies related to non-employees, please see policy 8.17 for reporting income on IRS Form 1099 MISC Income. Given the time needed to compile this information from Foundation 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 the Foundation’s Executive Committee)
• Moving expenses (NOTE: UGA Relocation and Moving Expense policy should be followed and the Foundation can only fund certain exceptions)
• Immigration/visa fees
• Personal/unauthorized use of Foundation property
• Athletic tickets not utilized for business purposes
• Entertainment tickets such as dinners, theatre, etc. not utilized for business purposes
• Internet/telecommunications service provider fees (portion not used for business purpose) (NOTE: per UGA Telecommunications Policy, this type of expense must be paid directly through UGA)
• Reimbursements submitted more than 60 calendar days after the expense has been incurred, if reimbursed, are taxable income per the IRS

Any such payments 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. The Foundation complies with UGA policy by reporting all potential fringe benefit type expenses by employee each year by November 30.

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 Foundation for questions regarding potential fringe benefits not listed above.

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. Foundation funds may be utilized for payment of approved expenses processed through UGA systems but funded by the Foundation.

The Foundation 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)

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

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. The Foundation’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 do not have a documented business purpose for attending an event will be considered a taxable fringe and be reported to UGA Payroll Department. The Foundation’s 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 Foundation Office as soon as possible after the event takes place.

Social Clubs

The Foundation may reimburse key employees at UGA for payments made for social club dues and/or memberships in the employee’s name.  The club dues and/or memberships must be approved in advance by the Foundation and UGA before any reimbursements to the employee are permitted.  The reimbursement will be reported to UGA Payroll Department annually and may be included in the employee’s W-2 as taxable income subject to IRS reporting requirements IRC §274(a)(3). 

The Foundation no longer allows direct payment to the vendor for social club dues and/or membership.  The employee should pay for the membership dues and then seek reimbursement from the Foundation.  The key employee must complete a Club Membership Business Use Substantiation form for each club membership reimbursement.  This form can be found on the Foundation’s website under Administrative Forms / Expenditure Control Forms .  Per the IRS reporting requirements, each membership reimbursement should reflect the percentage of personal and business use.  Therefore, with each reimbursement request, the employee must attach the completed Club Membership Business Use Substantiation form. 

If the employee can substantiate the expense as solely business use, then it is considered a non-taxable working condition fringe and will not be included as taxable income by UGA payroll.  Initiation fees associated with the club membership and for which the employee requests reimbursement, qualify for consideration under the taxable fringe policy.  The type of membership will determine whether these fees are personal and taxable or nontaxable as a working condition fringe.  The Foundation will submit an annual report for each employee to UGA Payroll for each social club membership and copy the report to the employee.  UGA Payroll will make the final determination on taxable and non-taxable reporting for each employee.

Procedure for Reimbursement / Reporting:

• The employee must obtain prior approval for each membership from the Foundation and UGA.
• The employee should pay the monthly fee, any associated initiation fees, and any associated entertainment costs directly to the vendor by the due date each month The Foundation will not pay for any late fees associated with club memberships.
• The employee should complete the Club Membership Business Use Substantiation form to attach to each reimbursement request which will indicate the business activity for that time period.
• A Foundation check request with attached copy of club membership invoice, Club Membership Business Use Substantiation form, and any business entertainment receipts with associated Entertainment Reimbursement forms should be submitted to the Foundation’s Expenditure Control Department for processing.
• The Foundation will reimburse the employee for the amount of the Foundation check request.
• The Foundation’s Accounting Office will submit an annual report each November to UGA Payroll for each employee by membership and include a copy of each Club Membership Business Use Substantiation form for the period of November 1 to October 31. UGA Payroll will make the final determination concerning taxable and non-taxable inclusion in the employee’s W-2 form.

Automobile Policy

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

1. 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.
   1. Payment Procedure: Employee submits a check request along with the original invoice indicating the lease amount for reimbursement, not to exceed the approved monthly rate. The employee may also submit a check request for maintenance and insurance to the extent that the maximum monthly rate has not been reached. These payments will also be made payable to the employee and will require original receipts.

Monthly Car Allowances: Payments are made to UGA for inclusion in the employee’s payroll. These payments are considered compensation. See policy 8.13 for employee awards. Please contact the Foundation Accounting Office for questions regarding potential fringe benefits not listed above.

Last Updated on August 9, 2023