Holiday Closure
CU System Administration, the OUC, and FSS Help will be closed on Monday, May 26, in honor of Memorial Day. We will reopen Tuesday, May 27, for normal business hours.
CU System Administration, the OUC, and FSS Help will be closed on Monday, May 26, in honor of Memorial Day. We will reopen Tuesday, May 27, for normal business hours.
Effective Date: April 1, 2025 (see Revision Log for what changed on this date)
This Procedural Statement (a) sets forth university rules and requirements for using university funds to pay for recognition and training for employees, associates, and other individuals (including students); and, (b) is designed to provide reasonable assurance that recognition awards, rewards, and prizes distributed by the University are properly captured and subject to appropriate tax reporting.
This Procedural Statement is divided into the following sections:
In striving to create and sustain an encouraging and supportive work environment for its employees, the University may hold a recognition event (which is a type of official function) to recognize employees and/or present an award, reward, or prize (which can be cash, cash - like, or non - cash) to an employee. On occasion, the University may hold a recognition event and/or give an award, reward, or prize to a non - employee, i.e., associate or other individual (including students and supporting organizations) as a gesture of appreciation or as an indication of goodwill and esteem. Any type of recognition event, award, or prize should be funded only after careful review of the Administrative Policy Statement Propriety of Expenses and its Tests of Propriety, specifically in considering the costs in relation to the benefits and the availability of funds, and in accordance with the provisions of this statement as well as the Finance Procedural Statement Sensitive Expenses.
First, determine the type of award: cash, cash - like, or non - cash. Next, determine the value of the award. Finally, identify the recipient: employee or non - employee.
The recognition grid summarizes requirements related to programs, forms, and tax reportability. Terms and procedures are explained in the subsequent sections of this procedural statement.
If the value of the recognition award, reward, or prize is greater than $2,000 per award, approval by the appropriate officer – in addition to other required approvals noted in the grid – must be obtained.
Type of Award | Value | Requirements | For Employees | For Non-Employees |
---|---|---|---|---|
Cash | Any | Program needed? | Recognition program (see Section C) approved by campus Human Resources Director and appropriate officer | Recognition program approved by Org Fiscal Principal |
RR form needed? | None (see Section H) | None (see Section H) | ||
Tax reporting? | Generally tax reportable on Employee’s W-2; see Recognition Categories (Section B) | Tax reportable; PSC issues 1099-MISC if $600 or more in calendar year | ||
Payment method? | HCM (see Section H) | Payment Authorization form | ||
Cash - like | >$100 individually or in aggregate during calendar year | Program needed? | Recognition program approved by campus Human Resources Director and appropriate officer | Recognition program approved by Org Fiscal Principal |
RR form needed? | Recognition Reporting form sent to Employee Services | Recognition Reporting form sent to PSC | ||
Tax reporting? | Generally tax reportable on Employee’s W-2; see Recognition Categories (Section B) | Tax reportable; PSC issues 1099-MISC if $600 or more in calendar year | ||
Payment method? | Any allowable procurement process, such as Procurement Card | Any allowable procurement process, such as Procurement Card | ||
Cash - like | up to $100 individually or in aggregate during calendar year | Program needed? | Recognition program approved by campus Human Resources Director and appropriate officer | None |
RR form needed? | Recognition Reporting form sent to Employee Services | None | ||
Tax reporting? | Generally tax reportable on Employee’s W-2; see Recognition Categories (Section B) | None | ||
Payment method? | Any allowable procurement process, such as Procurement Card | Any allowable procurement process, such as Procurement Card | ||
Non - cash | ||||
1. Awardee name is engraved on the award and the award item (plaque, trophy, or medal) is not made of precious metal or stone | Any | Program needed? | None | None |
RR form needed? | None | None | ||
Tax reporting? | None | None | ||
Payment method? | Any allowable procurement process, such as Procurement Card | Any allowable procurement process, such as Procurement Card | ||
2. Other types of non-cash awards, rewards, or prizes not listed in #1 above | Any | Program needed? | Annual employee evaluation | Not applicable |
RR form needed? | Recognition Reporting form sent to Employee Services | Not applicable | ||
Tax reporting? | Tax reportable on Employee’s W-2 | Not applicable | ||
Payment method? | Any allowable procurement process, such as Procurement Card | Not applicable | ||
>$100 individually or in aggregate per program during calendar year and not associated with an annual employee evaluation program | Program needed? | Recognition program approved by campus Human Resources Director and appropriate officer | Recognition program approved by Org Fiscal Principal | |
RR form needed? | Recognition Reporting form sent to Employee Services | Recognition Reporting form sent to PSC | ||
Tax reporting? | Generally tax reportable on Employee’s W-2; see Recognition Categories | Tax reportable; PSC issues 1099-MISC if $600 or more in calendar year | ||
Payment method? | Any allowable procurement process, such as Procurement Card | Any allowable procurement process, such as Procurement Card | ||
up to $100 individually or in aggregate during calendar year and not associated with an annual employee evaluation program | Program needed? | None | None | |
RR form needed? | None | None | ||
Tax reporting? | None | None | ||
Payment method? | Any allowable procurement process, such as Procurement Card | Any allowable procurement process, such as Procurement Card |
1. Length of Service – Length of Service recognition is given to employees (including retirees), associates, or other individuals who have achieved benchmark anniversaries in their years of service to the University. Five years is the minimum length of service that can be recognized, and recognition may not take place more frequently than every five years.
Employee length of service awards may not exceed $400; these are not tax reportable if the award is non-cash. All Internal Revenue Code limitations and limits, in effect at the time of the award, will be considered before adjustments are made to the W-2 or 1099.
2. Merit – The Merit category provides recognition for excellence, providing exemplary customer service, a quality deserving praise or approval, or demonstrated ability or achievement.
Examples include:
Merit awards are reportable as taxable income. All Internal Revenue Code limitations and limits, in effect at the time of the award, will be considered before adjustments are made to the W-2.
3. Safety – The Safety category provides recognition for acts intended to prevent adverse effects related to danger, risk, or injury. Only people in front line positions are eligible for safety awards. Per IRS regulations, 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 awards) can be given a safety award during a particular calendar year.
Safety awards are not tax reportable if the award is $400 or less and non-cash. All Internal Revenue Code limitations and limits, in effect at the time of the award, will be considered before adjustments are made to the W-2.
4. Participation – Participation recognition is given to employees, associates, or other individuals because of their involvement in a university activity.
Examples include:
Participation awards are reportable as taxable income. All Internal Revenue Code limitations and limits, in effect at the time of the award, will be considered before adjustments are made to the W-2 or 1099.
In most cases, a recognition program must be in place prior to spending university funds for awards, rewards, or prizes. Exceptions to the recognition program requirement include: staff appreciation meals (see Section E below), retirement gifts, and certain items as noted in the recognition grid, above.
Recognition programs can be established at the organizational unit , campus, or university level. Approvals are required as noted in the grid, above. After approval, all eligible individuals must be notified about the program.
Human Resources approval provides reasonable assurance that the program complies with pertinent regulations. Officer or Org Fiscal Principal approval provides reasonable assurance that the formal program complies with the Administrative Policy Statement Propriety of Expenses, is in the best interest of the organizational unit, and has available funds.
All of the following items must be addressed in each recognition program, and should be included in the documentation -- on the Recognition Program Authorization (RPA) form -- prior to requesting review and approval:
Recognition events are official functions and, therefore, the Finance Procedural Statement Official Functions and the Finance Procedural Statement Sensitive Expenses are applicable. As specified in the Finance Procedural Statement Official Functions, certain costs require additional approvals. If alcoholic beverages are served at the recognition event, then the Administrative Policy Statement Alcoholic Beverages Purchased for University Events and related procedures must be followed.
As stated in the Finance Procedural Statement Sensitive Expenses, attendance at recognition events should be limited to those necessary to recognize the individual(s) receiving the award, reward, or prize. In certain circumstances – e.g., retirement functions – it may be appropriate for one or more immediate family members to attend the recognition event.
A staff appreciation meal is an infrequent, unique, official function that is hosted and attended by the head of an organizational unit for the purpose of showing appreciation to a continuing or departing staff member, or a group of staff members.
Generally, such events should be associated with a specific performance trigger and would not be expected to occur more often than quarterly.
Staff appreciation meals must adhere to the following:
Other than the meal itself, a staff appreciation meal includes no additional recognition awards, rewards, or prizes. (If a staff appreciation meal involves an additional recognition award, reward, or prize, it is considered to be an employee recognition event, and is subject to the award guidelines stated in this document.). Approval procedures set forth in the Finance Procedural Statement Official Functions ; and, If alcoholic beverages are served at the staff appreciation meal, then the Administrative Policy Statement Alcoholic Beverages Purchased for University Events and related procedures must be followed.
1. Employees
2. Associates/Other Individuals and Supporting Organizations
1. Employees
Employee training is an essential component of creating and sustaining an encouraging and supportive work environment. Employee training also may serve as a component of the university’s personnel performance evaluation programs. Training decisions must meet all Tests of Propriety (in particular, being sensitive to the availability of funds, the relevance of the training to the employee’s job responsibilities and university career, and the role and mission of the respective organizational unit). The information that follows provides criteria for using university funds to pay for employee training opportunities and programs.
2. Associates and Other individuals
The University provides training to associates and other individuals when they are involved in activities that support the instructional, research, or public service mission of the university. One such example is the training offered to members of the Board of Regents. Training for associates or other individuals should be funded only after careful review of the Tests of Propriety, specifically the availability of university funds and the direct benefit to the University.
1. Cash Awards, Rewards, and Prizes
Cash awards to employees are processed through Employee Services, in HCM, issuing Additional Pay with earnings type of Award (AWR).
Cash awards to non-employees are processed through the Procurement Service Center using the Payment Authorization (PA) form.
2. Accounting Entries and Account ChartFields
Awards, rewards and prizes may be acquired through purchase or donation. If purchased through an approved procurement method, the following accounts are used
If an award, reward, or prize is donated, then the value of the award is recorded in Fund 34 as a Gift-in-Kind. Debit the appropriate account from above (550105, 550106, or 550108) and credit account 240606 Gifts In Kind less than $5,000. Include a full description, including the business purpose, on the transaction used to record the acquisition of the award, reward, or prize.
Organizational units must operate in a way that minimizes the risk of theft or damage to the awards, rewards, and prizes in their possession. This can be achieved through internal controls such as:
Unless approved by the appropriate campus controller, there are no exceptions to this procedural statement.
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