1. Summary
This policy outlines the Department of Justice (the Department) requirements for the expenditure, approval and management of entertainment expenses. All employees are expected to comply with the provisions of this policy to ensure entertainment expenditure is reasonable, justified, appropriately authorised, and consistent with the principles of accountability, transparency and responsible stewardship of public funds.
2. Scope
The policy applies to all departmental employees, officers (including statutory office holders), Board, Committee or Tribunal members. Where the term ‘employee(s)’ is used throughout this policy, it should be taken to include these roles.
3. Related legislation and documents
Category | Legislation or document |
Department of Justice | |
Department of Treasury and Finance | |
Commonwealth |
4. Definition
Entertainment
To identify the type of expenditure that would be regarded as entertainment, the Department applies the definition of “entertainment expenses” contained in section 32-10 of the Commonwealth Income Tax Assessment Act 1997 (ITAA). This definition is applied in determining whether such expenditure is subject to Fringe Benefits Tax (FBT).
Entertainment can mean the provision of:
- food or drink (sometimes) or recreation (almost always)
- accommodation or travel connected with entertainment.
What expenditure, especially on food or drink, qualifies as entertainment will depend on the circumstances. This is explained in more detail in Treasurer’s Instructions – FC-9 Tasmanian Government Card and the Financial Management – Better Practice Guidelines at Page 25-27.
If still in doubt after reading FC-9 and the Better Practice Guidelines, employees should check with their manager, or the Finance Branch.
5. Financial delegations
Employees with a financial delegation which includes entertainment can:
- incur entertainment for other staff members
- approve entertainment for other staff members.
These employees cannot:
- incur entertainment for themselves
- approve entertainment for themselves.
Employees that do not have a delegation which includes entertainment cannot:
- purchase entertainment for themselves or other employees without prior approval from an employee with an entertainment delegation.
6. Purchasing entertainment
Entertainment must not be purchased on a Tasmanian Government Card. Approval to do so can only be obtained from the Secretary of the Department of Treasury and Finance. Any employee for whom such approval is given will be individually notified.
Where an employee does not have authority to purchase entertainment on a Tasmanian Government Card, there are two other options available for payment:
- obtain an invoice for authorisation by an employee with an entertainment delegation and then submit the approved invoice to Finance for payment
- pay for the entertainment (with prior approval to expend funds) and claim reimbursement from the Department by submitting a General Claim for Payment Form approved by an employee with an entertainment delegation.
7. Entertainment requirements
Employees with a financial delegation enabling them to authorise entertainment expenditure are responsible for ensuring that all entertainment expenses incurred are:
- appropriate
- within their financial delegation
- for official purposes.
Examples of Department funded entertainment expenditure which might be appropriate in some circumstances include:
- hosting a meal at a restaurant for interstate or foreign dignitaries
- hosting a departmental sanctioned function (e.g. Artists with Conviction or the Opening of the Legal Year).
Examples of Department funded entertainment expenditure which would be inappropriate include:
- a farewell lunch or dinner for departing staff members
- a social lunch or dinner for staff members with whom an employee has a close personal relationship.
The purchase from departmental funds of gifts or flowers to mark weddings, births, bereavements or farewells is not permitted.
These forms of expenditure are personal expenditure and should be funded through staff or social club contributions.
An entertainment declaration form must be attached to all purchases of entertainment submitted to Finance for processing. This form must be filled out correctly to enable Finance to determine the FBT payable by the Department.
8. Fringe Benefits Tax (FBT) on entertainment
All activities described in the ITAA definition of entertainment are deemed to be entertainment for FBT purposes.
The Department is required to pay FBT on all entertainment provided to employees. The Department is not funded to pay any entertainment to employees’ associates (family members, friends etc). Adding the FBT payable on entertainment provided to employees approximately doubles the cost of the entertainment.
The Department is not required to pay FBT on entertainment provided to clients. However, the Department is unable to claim the GST back on the purchase of that entertainment, which increases the cost of the entertainment by 10 percent.
9. Responsibilities
Employee/contractor
Employees are responsible and accountable for:
- ensuring that they understand and adhere to this policy.
Output Manager
In addition to their personal responsibilities as employees, Output Managers are responsible for:
- understanding and communicating the requirements of this policy
- supporting and enforcing this policy, including ensuring all employees comply with the requirements.
Finance Branch
In addition to their personal responsibilities as an employee, the Finance Branch is responsible for ensuring that:
- details of entertainment expenditure are accurately recorded within the Department’s financial management information system
- the Australian Tax Office is provided with any FBT related information it requires
- FBT payable is properly calculated and accounted for
- reviewing this policy at regular intervals.
Agency Executive
In addition to their personal responsibilities as employees, Agency Executive are responsible for:
- supporting and endorsing this policy
- implementation of this policy and compliance with associated legislation.