Penn State - Financial
An employee may have a need to conduct University business away from his/her usual University place of work. As such, there can be a need for telecommunications services that accommodate the individual's mobile work style. For the purposes of this policy, all means of telecommunications at locations away from an employee's work place shall be referred to as 'non-office telecommunications.'
This policy defines the responsibility for the coordination and usage of non-office telecommunications services.
The University recognizes the importance and prevalence of cellular communications for both personal and business communications and sets the following policy regarding cellular voice/data services. This policy was set to be in compliance with Internal Revenue Service regulations regarding cellular phone service.
The cost of a cellular voice/data plan/device is considered a personal expense for an employee and will not be directly paid for, or reimbursed by, the University unless certain business criteria are met. Budget executives and individual departments/units have the authority to set higher business requirements to provide or reimburse for cellular voice/data plans/devices than those outlined by this policy. This applies for text messaging (the transmission of text, video, photos or other media) as well, including emergency text messaging subscriptions offered by Penn State. A unit has the authority to decide that it will not provide or reimburse for any cellular services.
An administrative area or unit must follow the policy outlined below to determine if it is appropriate to provide or reimburse for cellular and other non-office telecommunication services for an employee. The guiding principle for eligibility is that the use of a cell phone or Smart Phone by an employee is for the benefit of the University, rather than the convenience of the employee.
Information Technology Services (ITS) is responsible for establishing University contracts for cellular voice/data services with various providers. These contracts generally provide for discounts for both University and employee-owned voice and data services and equipment. ITS will not be involved in contracting for individual service contracts, even for University-owned cellular plans. When obtaining services or equipment, employees need to assure that Penn State negotiated pricing is being applied. Cellular voice/data providers will require verification of employment (i.e. Penn State ID) to have contracted discounts applied to services and equipment.
NOTE: Per policy FN14 - Use of University Tangible Assets, Equipment, Supplies and Services any service paid or reimbursed by the University may not be used for any activities for personal gain (such as in the conduct of a personal business).
To be eligible for cellular service either paid directly by the University or as a reimbursement to the employee, one or more of the following criteria must be met:
- The employee is considered key personnel for emergency or safety purposes.
- Employee supports or is responsible for programs, services or systems that necessitate frequent and immediate communications throughout the day, after-hours or while away from the office on travel.
- The employee is required to be available 24/7 to monitor essential systems, which may include receiving text messages from such systems upon outages or conditions outside of operating standards
- The employee must be available immediately for service calls or trouble-shooting during the work day.
No other communication source
- Employee does not have access to other communication devices while on the job either because the employee has no assigned office and/or primary work location changes based on assignments
- The employee is required to travel on a frequent basis and must maintain regular communication while in travel status.
- The employee performs the majority of his/her job duties "in the field", where business either cannot be conducted by a landline telephone or it would be inefficient to use a landline telephone.
Most University employees will not be eligible for a University-owned cellular phone or for reimbursement on a regular basis for business use of a personal phone. There must be a strong and continuing business need before a department can approve either a University-owned cellular phone or reimbursement for business use of a personal phone.
If it has been determined that an employee requires cellular service for business purposes, the department and employee will determine which of the two options is the best for the particular circumstances and situation of both the department and the employee, with the department having the ultimate authority for determining the approved option:
- University-owned Cellular Plans/Devices
- Allowance for Business Use of a Personal Plan/Device
If an employee is approved for one of these options, the University must be provided the cellular number and has the right to publish that number as appropriate based on the business purpose for the device. This includes personal plans if an allowance toward business use is provided.
1. University-owned Cellular Plans/Devices
This method would be used where an employee or department has a need for University-owned cellular plans/devices, especially for situations where the phones are shared among employees. The IRS requires review and sign-off of the monthly statement by the employee to document business versus personal use, even though personal use of these phones is not permitted.
Acquisition of Service:
Documentation of the business need for an employee/department to obtain a University-owned cellular plan/device is required through completion of the Non-Office Telecommunication Usage Agreement (NTUA) for University-owned cellular plans and devices. Different forms are required depending on how the service/device will be assigned:
- If the device will be pooled for general departmental use (signed out as needed), the department should complete the NTUA for a Pooled Device, including documenting how the device will be tracked while in use and the business need for this service.
- If an employee will be provided a dedicated device, the employee should complete the appropriate NTUA for a Dedicated Device with full documentation of the business need for this service.
The completed NTUA form must be approved by the budget administrator, the budget executive and the Financial Officer. No plans or equipment should be contracted or purchased until the appropriate NTUA form is fully approved.
The department must contract for service directly with the chosen cellular provider based on obtaining the most cost-effective plan based on expected business use, including text messaging services if required. The choice of cellular device to purchase must be based on balancing the required business needs versus the most cost-effective device available.
The purchasing card would be the preferred method for purchasing cellular plans and devices as well as for monthly charges. A copy of the NTUA form must be attached to the purchasing card support form for the purchase of the service/device.
Protocol for Non-Business Use:
Personal use is not permitted on University-owned phones on a regular basis. Employees must use personal plans/devices for regular personal use and should not provide the University-owned cellular number to others except for business purposes. However, it is recognized that it is possible for limited personal usage to occur.For phones assigned to individuals, any personal use must be de minimis, which is defined for purposes of this policy as less than 30 minutes per monthly billing period. If personal use exceeds 30 minutes per month, the employee will be required to reimburse the University for all personal use during that billing period. All minutes, including those during "free" nights and weekends, are included in the calculation of personal minutes used. Text messaging would be factored into the de minimis use exception based on one text message equaling one minute of personal use.
If personal use occurs while a pooled phone is signed out to an employee, the personal use must be reported and documented when the phone is returned so that reimbursement can be made if personal use by this individual exceeds the de minimis amount of personal use permitted.
Required Monthly Documentation:
Employees with dedicated University-owned plans are required, based on IRS regulations, to review, sign and submit the monthly cellular billing statement as support for the monthly purchasing card transaction. All personal calls and/or text messages must be clearly marked. If personal use is more than de minimis, the employee must reimburse the University for all personal use during that billing period at a rate of 45 cents per minute or text message.
If additional charges are incurred which result from personal use, those charges must be reimbursed as well, even if the total personal use is considered de minimis. In situations where there is an overage as well as more than 30 minutes of personal use, the employee will be required to pay back the greater of 1) the overage resulting from personal use or 2) the personal minutes used x .45. For purposes of this policy, business use is assumed to occur first, then personal use. Financial Officers and purchasing card reconcilers have the authority to ask for more detail on any call or text message made or received during a billing period to substantiate business use.
For pooled devices, an individual in the department, such as a supervisor, must be assigned the responsibility of reviewing the monthly statement to verify, to the best of their ability, that all usage was business-related. Part of the review of the monthly statement should include a review of the log documenting the individuals using the cellular device at any particular time.
Reimbursements for personal use of University-owned phones must be deposited as an offset to expenses and per the provisions of Policy FN01. Reimbursements may not be diverted to petty cash funds or any other type of fund whether or not sanctioned by the University.
- Illustrations of Personal Use Reimbursement Calculation
- An employee holding a University-owned cell phone plan makes 32 minutes of personal calls and three personal text messages during the month. She must reimburse the University $15.75 (32 minutes @ 45 cents per minute + 3 text messages @ 45 cents per minute).
- An employee holding a University-owned cell phone plan makes 40 minutes of personal calls and the phone plan exceeds its base usage amount by 15 minutes and is charged an additional $6.75. The employee must reimburse the University for $18.00 for exceeding the personal use de minimis (40 minutes x .45 per minute), which is greater than the overage of $6.75.
- Same facts as illustration 2, except there are only 10 minutes of personal use. The employee must reimburse the University $4.50 (10 minutes personal divided by 15 minutes total overage= 66.6% personal usage x $6.75), for the 10 minutes of personal use which resulted in an overage.
If personal use of a University-owned phone exceeds the de minimis amount on a regular basis, consideration should be given to moving the employee from a University-owned cellular plan/device to an employee-owned cellular plan, with reimbursement for business use through a taxable allowance.
Termination of Service:
If an employee is terminated, resigns, transfers or no longer has a need for a University-provided cellular phone, the employee is required to promptly return equipment to the department through which the cellular phone was issued and the department will either reassign the service/device or end the service contract.
2. Allowance for Business-Use of Employee-owned Cellular Plan/Device
For certain employees, work hours are routinely beyond a regularly scheduled work day and their business and personal lives are intertwined. In these instances, the employee may wish to use one device for both personal and business use. If the employee is eligible for University-provided cellular service based on the business criteria outlined above, an allowance should be used rather than providing a University-owned cellular plan/device.This method would be used to reimburse an employee for use of a personal cellular plan/device for business purposes. This method does not require monthly documentation of business versus personal calls. Use of the allowance allows the employee to use one phone for both business and personal use without detailed documentation of use each month.
The service would be a personal contract between the employee and the service provider. The employee should be able to receive a Penn State discounted rate for any personal plan. Employees will be asked to provide verification of employment (i.e. Penn State ID) to obtain Penn State pricing for all equipment, under contracts negotiated by either ITS or The Milton S. Hershey Medical Center Purchasing Office with the primary cellular providers.
The employee should not assume that an allowance will be available toward business use of a personal plan. The employee must provide a compelling business reason for receiving such an allowance and receive full approval through the completion of the NTUA - Allowance for Business Use of Personally Owned Plans/Devices.
Documentation of the business need for an employee to use a personal cell phone plan is required. The allowance for cellular service/devices may not exceed a maximum of $60 per month. A University department may set individual monthly allowances at a lower level if appropriate based on expected business usage or departmental goals. The allowance would cover the business share of the monthly service cost as well as equipment costs and text messaging. The NTUA - Allowance for Business Use of Personally Owned Plans/Devices must be completed in full. Approval from the budget administrator, budget executive and Financial Officer is required.
The employee would receive the monthly allowance as a reimbursement. The department would process a Special Request for Check (SRFC) for reimbursement on a regular basis, but at least quarterly and no more than monthly.
The appropriateness of the allowance (amount and business need) should be reviewed by the department periodically. In those situations where a revision is required, either to the amount of the allowance or the reason for needing the service, a new NTUA form should be completed and approved. It is the responsibility of the employee to notify the department if a change in cellular service plan or employment duties would impact the amount and/or eligibility for an allowance.
Given that no substantiation of the calls made or text messages received is required to support the allowance, payments must be paid on general funds (x-coded), unrestricted donor funds, or unrestricted research funds. These payments may not be direct charges to federal or state grants or contracts unless specifically approved in the contract.
Business Usage Exceeds Allowance:
If the employee incurs additional non-recurring charges on a personal phone due to business use, reimbursement for these additional charges, even if the employee is receiving an allowance, may be permitted, with approval from the Budget Executive and Financial Officer. Documentation substantiating the additional costs and their relation to business use must be provided - see reimbursement for business use below. The most common reason for business usage exceeding the allowance would result from international travel.
Termination of Allowance:
If the employee is no longer eligible for an allowance, the employee's department must submit a request to discontinue the allowance.
The only option for combined cellular/data devices/services is the allowance for business-use of employee-owned cellular plan/device. University-owned combined cellular/data services/devices (Smart Phones) will not be approved except as an exception to this policy. Requests for exception must be approved by the Office of the Corporate Controller and should be forwarded by the Financial Officer to the Assistant Controller for University Financial Officers for final approval by the Corporate Controller.
The business need to receive an allowance for combined cellular/data services must be substantiated based on the need for email contact on a 24/7 basis and that the data services are used almost exclusively for University business. The expectation is that allowances for data services will be limited across the University and will only be approved by the budget executive for a limited number of individuals, if any, in their area of responsibility.
The NTUA - Allowance for Business Use of Personally Owned Plans/Devices must be completed in full and signed by the appropriate individuals, including documentation of how the allowance amount was determined. Where the business need is substantiated and approved, a maximum allowance of $120 per month for both cellular and data services would be permitted. A University department may set individual monthly allowances at a lower level if appropriate based on expected business usage or departmental goals. The allowance would cover the business share of the monthly service cost for voice and data services and text messaging. In addition, given the cost of such combined devices and the related business need for such a device, a one-time allowance to cover the cost of the equipment and reasonable accessories (i.e., chargers) may be provided upon approval of the budget executive.
Purchase of the equipment by the University, would not be permitted, even in those situations where the employee will not be requesting an allowance for the service contract cost. Any such reimbursement must be paid as an allowance given that the business versus personal use of the device cannot be substantiated. The NTUA - Allowance for Business Use of Personally Owned Plans/Devices would still need to be completed to provide the documentation of the business purpose for providing an allowance for the equipment only.
Allowances are not permitted charges on federal or state grants or contracts due to the lack of substantiation. Therefore, Smart Phone services and equipment would not be permitted charges on federal or state grants and contracts, and can only be paid from general funds (x-coded), unrestricted donor funds, or unrestricted research funds. If a grant or contract specifically details a requirement for Smartphone technology, the allowance may be permitted to be charged to the grant or contract, but there must be clear language within the grant or contract allowing this expense as a direct charge.
University staff may provide technical support for these devices, even though personally-owned, to allow use for business purposes. Employees who receive an allowance and receive technical support from University employees cannot hold the University liable for any damages to the device.
As with all personal costs, reimbursement can be provided for business use of a personal cellular phone for business purposes, as is done for use of a home landline for business, when additional charges are incurred. For costs incurred while traveling, the travel policy would apply. Otherwise, the following reimbursement policy would be applicable:
- No reimbursement would be provided for business use of a cellular phone (including text messaging) which falls under the normal calling plan for the employee.
- Cellular plans would only be reimbursed if business use results in additional costs to the employee over the base plan, including text messaging. Reimbursement would be based on the percentage of business versus personal calls resulting in the overage. The assumption would be that all personal calls would be accounted for within the base plan first, and then business calls.
- Data plans would only be reimbursed if overages resulting in additional costs to the employee occurred because of business use.
- Reimbursements would be accumulated until the total amount payable is $5.00 or more, given the high cost of processing reimbursements.
- The employee would be required to submit his or her monthly bill, indicating all business calls, text messages and data usage and documenting that business use resulted in an overage. Reimbursement would be based on the number of minutes used for business which resulted in the overage, assuming that all personal minutes are first to be covered. For data plans, the employee would need to demonstrate that the business usage resulted in additional cost to the employee.
- Illustrations of Business Use of Personal Phone Reimbursement Calculation
- An employee makes 20 minutes of business calls on a personal phone, and incurs no overage charges. No reimbursement would be made.
- An employee used 25 minutes on their cellular plan for business, and incurred an additional cost of $25 for a 50 minute overage, the University would reimburse 50% of the overage (25 minutes of 50 minute overage) or $12.50.
- An employee makes 60 minutes of business calls on a personal phone from a total of 200 minutes used, with a base plan of $45 per month, but incurs no overage. No reimbursement would be made.
- Employee makes 105 minutes of business calls on a personal phone from a total of 600 minutes used, with a base plan of $45 per month. The employees plan permits 550 "free" minutes per month. The 600 minutes used results in additional cost of $25 for a 50 minute overage above the 550 monthly minutes permitted under the plan. The employee would be reimbursed the $25 cost for the 50 business minute.
For university-owned cellular plans and devices, the University will bear the cost for any associated fees related to modifying or terminating the contract, with the exception of such costs arising from employee misconduct or misuse of the plan.
For personally-owned cellular/data plans and devices, the University will have no obligation to reimburse the employee for costs related to modifying or terminating a contract unless there is a compelling business need for the change in the personal plan.
All institutional data must be protected from unauthorized disclosure and must be protected with the same granularity of security control provided by the originating host system. This includes institutional data on mobile devices, including personal devices which may be used for business purposes. Certain private data, such as social security numbers, may not be retained on local or mobile devices unless an exception has been granted by the University Privacy Officer. Additionally, mobile devices must be properly disposed of when no longer being used.
It is recommended that University-owned phones, as well as those supported by allowances, be password-protected.
Text messages should never be used to send private University data, or protected personal information, such as social security numbers, passwords or credit card numbers.
NOTE: Employees using University issued phones should understand that any records they create related to University business—including text messages, voicemail messages, emails, and other electronic communications—are University records. These records therefore (1) should be managed according to University records retention policies, and (2) may be subject to disclosure if someone requests them.
All cellular phones which are issued for University use or are supported by an allowance, must subscribe to the PSU TXT emergency messaging system, if the phone provides for text messaging services. To subscribe, follow the instructions listed at www.live.psu.edu/psutxt.
Texts sent from University-owned phones or systems must never contain any offensive, abusive or inappropriate language, even if falling under the de minimus personal use provisions.
The following are also required for University-owned as well as during business use of devices supported through an allowance:
Please refer to the following policies for additional information:
AD19 - Use of the Penn State Identification Number and Social Security Number
AD23 - Use of Institutional Data
AD20 - Computer and Network Security
AD35 - University Archives and Records Management
BS15 - Disposal and Purchase of Obsolete, Surplus or Scrap University-Owned Equipment, Supplies and/or Materials
The University will not pay for or reimburse employees for the cost of internet services at home, such as DSL or satellite services, from any University funds. Exceptions to this policy must be approved by the Office of the Corporate Controller, and generally will only be granted in situations where the employee is working from home at the convenience of the University. The NTUA - Taxable Allowance for Internet Services should be completed with appropriate approvals and then submitted to the Assistant Controller, University Financial Officers for final approval by the Corporate Controller.
If approved, reimbursement for internet services must be paid as a taxable allowance, given that detailed documentation of business versus personal use is not practical. Therefore, to meet IRS regulations in this area, the taxable allowance, which requires no documentation, is the only acceptable means of reimbursement for these services, if approved as an exception.
Calculation of the taxable allowance will be based on the base cost paid per month and the percentage of expected business usage. Adjustment for the impact of taxes is permitted.
Given that no substantiation of the usage of these services is available, payments must be paid on general funds (x-coded), unrestricted donor funds or unrestricted research funds. These payments may not be direct charges to federal or state grants or contracts.
TYPES OF CALLING CARDS:
- Pre-paid - involves a card having a preset value of call minutes where the value balance declines with use.
- Charge - allows a user to charge calls back to the University.
PRE-PAID CALLING CARDS:
The following rules apply:
- Pre-paid calling card services are authorized for international calling ONLY (while within or outside the United States).
- Employees may use their choice of prepaid calling card, but should purchase one with a reasonable cost.
- Purchase of pre-paid calling cards are not permitted on the Penn State Purchasing Card unless authorized in advance by the Financial Officer. Otherwise, the employee should purchase the card and request reimbursement.
- A log must be maintained of all calls made with this card and the log must be reviewed monthly by the budget administrator or budget assistant.
- Pre-paid calling card services are not a permitted expense on federal, federal flow-through accounts, or other restricted funds which prohibit such expenses.
- Expenses may not be charged either directly or indirectly to these accounts.
- Pre-paid calling services must be 'x-coded' when purchased on general funds.
CHARGE CALLING CARDS:
Only the following charge calling card services are authorized:
- For domestic calls within the United States - the Penn State Travel Calling Card.
- For international calls (while within or outside the United States) -
- Use the Corporate Calling Card if your place of work is University Park.
- Use the ExecuBill Calling Card if your place of work is NOT University Park.
NOTE: The authorized charge calling cards are available from Telecommunications and Networking Services (TNS).
For questions, additional detail, or to request changes to this policy, please contact the Office of the Corporate Controller.
Other Policies in this manual should also be referenced, especially the following:
FN14 - Use of Tangible Assets, Equipment, Supplies and Services
HR91 - Conflict of Interest
RAG01 - Implementing Revised OMB Circular A-21 (Section F.6.b - Departmental Administration Expense)
Most Recent Changes:
Revision History (and effective dates):