BETHEX FEDERAL CREDIT UNION, UST #1373 EXCESSIVE OR LUXURY EXPENDITURES POLICY
This policy fulfills the requirements under the American Recovery and Reinvestment Act of 2009 (ARRA) enacted February 17, 2009. ARRA requires each credit union recipient of funds under the Community Development Capital Initiative (CDCI) of the Troubled Assets Relief Program (TARP) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the Department of the U.S.
Bethex Federal Credit Union prohibits excessive or luxury expenditures on entertainment and events, office or facility renovations, aviation or other transportation services or other activities or events that are not reasonable expenditures for conferences, staff development, reasonable performance incentives or other similar measure conducted in the normal course of business operations of Bethex Federal Credit Union. All directors and employees of Bethex Federal Credit Union are subject to this Policy and will be held accountable for compliance with the Policy.
As a reminder, under the Treasury’s Interim Final Regulations, an Excessive or Luxury Expenditures Policy must:
- address four categories of expenditures: entertainment or events; office and facility renovations; aviation or other transportation services; and other similar items, activities, or events;
- be reasonably designed to eliminate excessive and luxury expenditures;
- identify the types or categories of expenditures which are prohibited;
- identify the types or categories of expenditures for which prior approval is required;
- provide reasonable approval procedures;
- require principal executive and financial officers to certify that such approval procedures were followed;
- require the prompt internal reporting of violations to an appropriate person; and
- mandate accountability for adherence to the policy.
It is the policy of Bethex Federal Credit Union that directors and employees of the Bethex Federal Credit Union utilize credit union assets in a prudent manner and as such are hereby precluded from engaging in excessive or luxury expenditures. The following are the Bethex Federal Credit Union’s minimum standards. Directors and employees are encouraged to impose more strict standards upon themselves when they deem the relevant circumstances require such standards.
TYPES OF EXCESSIVE OR LUXURY EXPENDITURES
Excessive or luxury expenditures can occur in the following areas:
• office and facility improvements and/or renovations;
• entertainment; and
• other activities or events that involve expenditures which are not for staff development, performance incentives or other similar matters conducted in the normal course of business and which are not reasonable in amount.
Procedure for Reimbursement
All travel related expenses incurred by a director in the ordinary course of business shall be submitted to the Chief Financial Officer (CFO) (“Policy Officer”) or Treasurer on an employee expense report. The Policy Officer or Treasurer will be responsible for making sure all documentation is appropriately completed and will submit all approved expenses to the credit union board of directors for reimbursement.
All travel related expenses incurred by an employee in the ordinary course of business shall be submitted by the employee on an employee expense report and approved by the CFO or Treasurer before being submitted to the board of directors for reimbursement. Reimbursement requests by the Chief Executive Officer (“CEO”) must be made by the Chairman of the Board of Directors (the “Board”).
Any travel expenditures that are not covered by the foregoing provisions must be approved in writing by the Chairman of the Board (if requested by a director or the CEO) or the employee’s supervisor (if requested by an employee) prior to being incurred.
Automobile and Mileage Related Expense
The standard rate for mileage reimbursement for directors and employees using their personal vehicles for business purposes is the IRS guideline in effect at the time of travel. Mileage should be tracked from the beginning point of travel (home or office) to the point of destination for business of Bethex Federal Credit Union. Directors and employees will be reimbursed for parking and tolls when these expenses are required in the course of business related travel.
Employees and directors are encouraged to avoid overnight stays when one-way travel time for a one day meeting is two hours or less. Exceptions are conferences, group meetings, etc. that have been previously approved by the CFO, Treasurer, or the CEO. When possible, all lodging should be booked through the appropriate personnel with knowledge of any corporate rates or
discounts Bethex Federal credit Union has negotiated with selected hotels (Hampton Inn/Holiday Express style hotel or equivalent should be used whenever possible). Expenses such as spas, fitness facilities, in-room movies, laundry and dry cleaning services, etc., must be paid
personally by the employee or director and will not be reimbursed by Bethex Federal Credit Union.
Bethex Federal Credit Union will reimburse directors and employees for reasonable meal expenses that are incurred during business related travel.
The maximum reimbursement for meals is $50 per day when incurred during out-of-town business travel that includes overnight lodging. The maximum reimbursement for meals per day when an overnight stay does not occur is $35. Receipts will be required on meals of $25 or more. The cost of alcoholic drinks will not be reimbursed.
Use of commercial airlines must be approved by the Chairman of the Board, the CEO, the Treasurer or the CFO, as applicable. Major airlines will be utilized if necessary, and economy/coach seating will be the only type of seating authorized by the board of directors. First class seats are prohibited from being purchased for airline travel.
All plane fares and reservations should be booked through the appropriate personnel in order to obtain the lowest reasonable rate.
The use of rental cars for business purposes may be necessary under certain circumstances. Reservations for car rentals should be made through the appropriate personnel who have knowledge of any corporate rates or discounts that have been negotiated with car rental agencies.
Taxi fares will be reimbursed if incurred during the normal course of business. Receipts should be submitted on a personal expense voucher.
No aircraft may be chartered by an employee or director without the prior express consent of the Chairman of the Board. Bethex Federal Credit Union does not utilize charter aircraft. Major airlines will be utilized if necessary, and economy/coach seating will be the only type of seating authorized by the board of directors. First class seats are prohibited from being purchased for airline travel.
Bethex Federal Credit Union does not pay the expenses of a spouse, a guest or a family member accompanying a director or employee who is attending credit union related functions unless the attendance is required or expected (this would normally include only conventions and
other major social events.) Reimbursement of these expenses must be requested and approved prior to the convention or event by the Chairman of the Board, the CEO, the CFO or the Treasurer, as applicable.
OFFICE AND FACILITY IMPROVEMENTS AND RENOVATIONS
All proposed office and facility capital improvements and/or renovations with a cost exceeding $5,000 must be approved in writing by the CEO prior to the commencement of any such activities. Such proposed expenditures by the CEO must be approved by the majority of the Board of Directors, inclusive of the Chairman of the Board. Any other proposed office or facility improvements and/or renovations (i.e., with a cost of $5,000 or less) must be (i) approved by the Chairman of the Board, and (ii) within the allocated budget of Bethex Federal Credit Union for the fiscal year for such improvements and/or renovations.
All proposed meetings and events organized by Bethex Federal Credit Union must serve one or more legitimate business purposes. Each proposed meeting or event with a cost exceeding $1,000 must be supported by a written business case identifying the specific business
purpose and approved by the CEO (if an employee or senior executive officer meeting or event) or the Chairman of the Board (if a director or CEO meeting or event).
The CEO may establish reasonable entertainment allowances for employees, and the Board may establish such an allowance for the CEO. In the absence of such an allowance, all reimbursements for employee entertainment expenses exceeding $300 must be approved by the CEO, and CEO entertainment expenses exceeding $500 must be approved by the Chairman of the Board.
The Board may establish a reasonable entertainment allowance for directors. Director expenditures exceeding the director’s allowance must be approved by the Chairman of the Board.
THE BETHEX FEDERAL CREDIT UNION POLICY MANUAL
Revision : January 2011; Treasury/Finance: Excessive and Luxury Expenditure Policy
This policy was approved by the board of directors of Bethex Federal Credit Union on 3-26-2013 and will be reviewed annually for any necessary changes or revisions.
If, after adopting the above Excessive or Luxury Expenditures Policy, the board of directors of Bethex Federal Credit Union makes any material amendments to the Policy, within ninety days of the adoption of the amended Policy, the board of directors will provide the amended Policy to Treasury and its primary regulatory agency, the NCUA. This disclosure will continue through the TARP period.
Chairman of the Board
Secretary of the Board of Directors