Employees who meet all of the eligibility requirements qualify to receive a monthly supplemental compensation for on-going business expenses related to cell phones and PDAs (such as Blackberry or Treo). The business use of a cell phone or PDA by an employee must be for the benefit of the University, rather than the convenience of the employee.
Specifically, University employees are eligible to receive supplemental compensation if they meet all of the following criteria:
- The employee's job requires him or her to be readily accessible for frequent contact with the public or with University faculty, staff or students and
- The employee's job limits his or her access to regular land-line telephones that would satisfy the required business communication needs; and
- Monthly usage for business purposes is consistently:
- 67% or more of total contract minutes for a cell phone; or
- 90% or more of total contract minutes/data transfer for cellular PDA contracts
Departments must review prior billings to determine and confirm that an employee’s monthly business usage qualifies for initial and on-going eligibility. Authorization for supplemental compensation must be reviewed and renewed annually and must be authorized by a Dean or VP or their designee. All billings and documentation used to determine qualification should be retained for audit and compliance purposes.
For those who qualify, this policy authorizes a $65 monthly supplemental taxable compensation for cell phones, OR a $130 per month supplemental compensation for cellular PDAs. The payments will be spread across pay periods. Employees who receive monthly supplemental compensation may not also receive reimbursements for any cell phones or cellular PDA expenses.
The amount of supplemental compensation is pre-determined by this policy, depending on the type of equipment used. The compensation is intended to cover the approximate monthly cost of either a cell phone or PDA, but not both.
- Contracts, Expense Reimbursements and Direct Billing of Employee Expenses
- Contracts entered into by qualifying employees are personal contracts that are the responsibility of the employee, not the University. Departments will not reimburse actual expenses or allow employees to have their monthly cell phone or cellular PDA expenses billed directly to the University or charged to a University purchasing card. In all cases, the billing for expenses for non-departmental phones must be directed to the employee for payment. Only the exceptions outlined in Special Situations section of this policy are allowed.
- Incremental Business Expenses
- Employees who do not qualify for the supplemental compensation may submit expense reimbursements for occasional, incremental business expenses, by providing the copy of their bill, clearly listing the incremental costs. Incremental business expenses are those calls that result in additional costs that are above and beyond the employee's normal calling plan (e.g., excess minutes, roaming charges). An invoice must be submitted to verify the incremental costs incurred.
- Sponsored Funds
- Supplemental compensation may not be charged to sponsored accounts. In instances where a PI or project has met all of the requirements, including budgetary and sponsor approval to direct charge cellular expenses as a direct expenditure on a grant, the PI or other research personnel should acquire a separate contract with a cellular vendor. Expenses should be billed to the sponsor as appropriate.
- Please note there are specific additional restrictions on the use of Sponsored Funds to pay for cell phone services. Contact the grant administrator for additional information.
- Equipment Costs
- This policy discourages departments from paying for cell phones or PDA equipment. Managers can use their discretion in determining when and if it is appropriate for the University to pay for employee’s cell phones or PDA equipment. Consideration should be given that most cellular companies offer numerous contracts with free or low cost phones.
- If, in a rare case, a department determines that the cost of the equipment poses a hardship on the employee, then the department should make a one-time taxable payment to the employee through the payroll system for the cost of the equipment. When applicable, these types of reimbursements may not be made more than once every two years. In all cases, the employee assumes ownership and all maintenance responsibility for the equipment.
Exclusions
Departments and colleges are not allowed to establish policies that differ from this University wide policy.
Special Situations
- Departmentally Owned Contracts
- Certain units may have special needs that justify departmental ownership of cell phones. Delivery drivers, maintenance personnel, custodians, security, parking ramp personnel and police officers are examples, where phones are assigned or rotated among employees. This would also include organizations that have multiple employees sharing a single cellular phone for on-call rotations. Faculty and staff may qualify for only intermittent and temporary use of departmentally owned cell phones, when the department determines there is a valid documented business need. Employees cannot use departmental cell phones for personal calls.
- Pagers
- Some departments currently use pagers for their communication needs. Since the cost of pagers is very nominal ($3.50 per month) and because potential personal use does not pose a financial risk to the University, it is recommended that departments pay for pagers directly therefore eliminating the reimbursement of these expenses.
- International Expenses
- For employees that receive supplemental compensation, the policy allows for reimbursement of incremental expenses incurred when international travel is involved for official business calls and data transfer.
The purpose of this policy is to:
- Provide direction on what costs the University will pay for cell phones and PDAs.
- Explain what constitutes appropriate business use of cell phones and PDAs.
- Reduce administrative burden and transaction costs associated with frequent employee expense reimbursements.
- Ensure regulatory tax compliance relating to cell phones and PDAs. The current tax laws require documentation of all business use of cell phones and PDAs when paid for by the University. This policy will effectively remove this documentation requirement when a taxable allowance is provided to the employee rather than the University paying for these benefits directly. Accordingly, this policy will minimize the compliance risks associated with state and federal tax laws and regulations.
- Cellular Devices
- Mobil telecommunication equipment, such as cell phones, cellular PDAs (e.g., Blackberry or Treo). PDAs without cellular capabilities are not covered by this policy.
- University Employee
-
- Responsible for equipment and contract payments.
- Responsible for properly documenting reimbursable expenses if not receiving supplemental compensation.
- Responsible for providing detailed cell phone bills for determining eligibility annually.
- Responsible for maintenance and security of cell phones and PDAs.
- Supervisory/Management Personnel
-
- Determine, document, and recommend the initial and annual eligibility of employees to receive the supplemental compensation. Ensure updates to payroll are made for supplemental compensation, as appropriate.
- Review and approve individual reimbursement requests from non-qualifying individuals.
- Vice President or Dean (or designee)
-
- Approval of all supplemental compensation allowances.
- University Auditors
-
- Conduct periodic reviews for policy compliance.
There are no appendices related to this policy.
- Amended:
- June 2009 - Minor language improvements and updates.
- Amended:
- July 2008 - Updates made to address Enterprise Financial System rollout. Significant revisions in Definitions, Responsibilities, Procedures and Appendices. Title changed from Using the University Purchasing Card to Using the University Procurement Card. All references to Purchasing Card changed to Procurement Card.
- Amended:
- April 2007 - "Ensure the credit or resolution has occurred" added to cardholder responsibilities.
- Amended:
- April 2005 - Responsibilities section clarified to make it explicit that the Cardholder cannot also serve as approver or authorized signer, and that cardholder can also serve as preparer.
- Amended:
- September 2004 - In contacts section, the "Filming & Record Retention" changed to "Imaging/Document Retrieval" and phone number updated. Added additional material to FAQ.
- Amended:
- April 2004 - Purchasing Card procedures can now be found as a part of the Purchase & Pay for Goods & Services process within the Financial One Stop. Financial Onestop also added to related information.
- Amended:
- January 2004 - Added FFN Approvers Tutorial to Related Information
- Amended:
- October 2003 - Responsibilities section updated for Cardholder and Authorized Signer.
- Amended:
- June 2003 - Added new form - Statement in Lieu of Receipt.
- Amended:
- April 2003 - Transaction limit for both sponsored and non-sponsored accounts is now $2,499.99. Updated Certified Approver role and responsibilities.
- Amended:
- January 2003 - Procedures updated to use the Financial Onestop. Link in Related Information changed from ECAR Processing Calendar to ECAR/CAR Processing Calendar
- Amended:
- July 2002 - Updated new IX policy information. All purchasing card activity must be moved out of the default object code 7370 to appropriate object code by cardholder department. (Previously this was done by Disbursement Services). Language clarified in policy statement and reason. Updated definitions, responsibilites, FAQ, procedures and appendix B: Examples of possible card purchases.
- Amended:
- March 2002 - Added Appendix E: Purchasing Card Activity Reports ECAR (electronic) and CAR (paper) Processing Job Aid.
- Amended:
- September 2001 - Added link to ECAR Processing Calender in related information and appendices.
- Amended:
- July 2001 - Airfare can now be charged to purchasing card. Billing
period changed. Clarified CAR and ECAR reconciliation procedures.
- Amended:
- July 2000 - Updated limit for nonsponsored purchases from $2000.00 to $2,499.00 per item.
- Amended:
- April 2000 - Policy amended to accommodate program enhancement,
(on-line) Electronic Card Activity Report. Updated transaction limit on sponsored accounts to $999.
- Amended:
- May 1999 - Clarified FAQ section and updated Related Information.
- Amended:
- February 1999 - Updated Dispute/Resolution and Lost/Stolen card forms so they are interactive.
- Amended:
- January 1999 - Updated references to transaction limit in policy statement, definitions, FAQ, Procedure 3.7.2.2 and Online Purchasing Card Application/Update Form. The transaction limit was increased to $2,000 for non-sponsored funds.
- Amended:
- June 1997 - Updated phone numbers in Contacts section. Clarified Rates, Definitions, Responsibilities, and Frequently Asked Questions sections. Clarified all procedures. Updated Purchasing Card Application, Dispute/ Resolution, and Lost Card forms.
- Amended:
- February 1997
- Effective:
- April 2006
-
To obtain a copy of a historical policy,
e-mail the U Policy Librarian at policy@umn.edu or call 612-624-4372.
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