Directive on the Management of Expenditures on Hospitality
May 18, 2011
This directive is available in multiple formats upon request (email PA Multiple Media).
Table of Contents
1. Effective date
The Directive on the Management of Expenditures on Hospitality came into effect on June 1, 2011, following approval by the Chief Financial Officer and Assistant Commissioner of the Finance and Administration Branch (F&A).
This directive replaces the 2006 Hospitality Policy.
This directive applies to:
- Canada Revenue Agency (CRA) managers with respect to their exercising of delegated spending authority; and
- administration/financial staff on behalf of managers who are designated responsible for the accounting or payment processes.
Compliance with CRA corporate directives is mandatory. To assist with the interpretation and implementation of the Directive on the Management of Expenditures on Hospitality, a number of key terms are defined in the Definitions section.
3. Related policy instruments
(also see References)
This directive flows from the Policy on Financial Administration.
This directive is supplemented by the Guidelines on the Management of Expenditures on Hospitality and the Procedures on the Management of Expenditures on Hospitality.
This directive reflects new requirements found in the Treasury Board (TB) Directive on the Management of Expenditures on Travel, Hospitality and Conferences and the guiding principles identified in the CRA Policy Framework for Financial Management and Corporate Finance. The TB changes relate to the planning and reporting (increased transparency) of travel, hospitality and conferences and increased focus on value for money. The purpose of this directive is to focus mainly on hospitality. Management of other expenditures covered under TB's Directive are covered in their respective policy instruments (e.g. Travel Directive).
Specifically, the new requirements include:
- approval of an annual budget and plan on hospitality, travel and conferences by the Commissioner at the beginning of each fiscal year;
- disclosure of the total annual expenditures for each of hospitality, travel and conferences, for all federal and non federal employees. The timing of this disclosure is to coincide with the preparation and release to TB of the Departmental Performance Report;
- clarifying the definition of hospitality expenses to exclude all auxiliary costs previously included in hospitality events, such as transportation to a hospitality function, rental of rooms in which a hospitality function is held, equipment, technical support and translation services at the function, etc.; and
- managing hospitality functions under set standard and maximum per person costs.
5. Objective and outcomes
5.1 Objective: To ensure that refreshments/meals and exceptional types of hospitality in justifiable circumstances will be extended with due regard to economy and probity, and in a business-like manner.
5.2.1 The Agency manages hospitality in a disciplined, rigorous manner with a focus on cost minimization and value for money.
5.2.2 Timely reporting and disclosure of hospitality expenses.
6.1 Special hospitality events
6.1.1 Special hospitality events are to be accounted for as "Hospitality" using General Ledger (GL) account 74745.
6.1.2 Hospitality will be provided only at special/social events related to Agency business.
Exclusions: Refreshments, meals and/or gifts must not be provided at Agency expense to celebrate social events such as: a wedding, birth or adoption of a child, birthday, promotion, transfer or retirement; and Christmas or other seasonal occasions.
6.1.3 Special hospitality events are to be pre-approved by a manager delegated spending authority and in accordance with Appendix A: Summary of Hospitality Authorizations Table.
The delegated cost limits in Appendix A apply to the total cost (including GST or HST in applicable provinces) of hospitality provided at a special/social event that is organized and attended by a specified group of individuals (e.g. a National Public Service Week (NPSW) recognition event attended by Tax Services Office employees, etc.).
6.1.4 Restaurant meals involving only CRA employees or other government employees are to be avoided unless clearly justified for business reasons. Such occasions are to be restricted to hospitality events involving the participation of at least one manager at Management Level 1 or 2 as identified in the Delegation of Financial Authorities matrix.
6.2 Work-related hospitality events
6.2.1 For the purpose of Delegation of Financial Authorities, the provision of refreshments and/or meals at work-related events in locations other than restaurants is not deemed to be a hospitality function, but a work-related hospitality event. Managers at all levels, with delegated spending authority for goods and services, may approve the provision of refreshments and/or meals at work-related events up to the total cost of $3,000 per event. In the cases where the cost exceeds $3,000, the prior approval of the Commissioner must be sought. A letter or memorandum to the Commissioner setting out the total cost and other detailed information about the events will be required, as outlined in the Procedures for Hospitality.
The delegated cost limit of providing refreshments and/or meals at work-related events applies to the total cost (including GST or HST in applicable provinces) of its provision as outlined below under total cost inclusions.
Total cost inclusions:
The total costs of refreshments and/or meals at work-related hospitality events, as well as any costs related solely to their provision, are to be approved and accounted for using GL account 74746. Related additional costs may include catering service, serving supplies, gratuities, etc.
Non-refreshment/meal expenses will be accounted for using the applicable GL account depending on the cost incurred (such as room rental, travel expenses incurred to get participants to the work-related hospitality events, etc.).
6.3 Food and beverage cost
The table below reflects per person hospitality costs that can be provided over the course of a single day. Allowances are set out in the Travel Directive.
|Food and beverages||Standard cost
per person (1)
per person (2)
|Breakfast||1.5 X Breakfast Allowance||1.5 X Standard Cost Per Person|
|Refreshment||0.5 X Breakfast Allowance||1.5 X Standard Cost Per Person|
|Lunch||2.0 X Lunch Allowance||1.5 X Standard Cost Per Person|
|Reception||2.0 X Breakfast Allowance||1.5 X Standard Cost Per Person|
|Dinner||1.75 X Dinner Allowance||1.5 X Standard Cost Per Person|
(1) The standard cost per person is the expected meal cost per person to be applied in normal circumstances, particularly for events involving federal government persons only. The standard cost per person cannot be exceeded without the proper approval as set out in Appendix A.
(2) A cost per person exceeding the standard cost and up to the maximum cost per person is to be applied in exceptional circumstances, justified by the type of event, the status and nature of participants and for reasons of courtesy, diplomacy and/or protocol. The maximum cost per person cannot be exceeded without the proper approval as set out in Appendix A.
6.4.1 Public funds must not be used to purchase alcohol at any work-related event. The purchase of alcohol is only permitted, with the pre-approval of the Commissioner, at some special hospitality events when it is appropriate to do so because of formal courtesy or protocol, e.g. international conferences.
6.5.1 CRA/Government owned facilities are to be used when these are appropriate and available. When these are not appropriate or available, the facilities of a commercial establishment such as a conference center, etc. could be used to provide refreshments/meals with the prior approval of a manager, subject to his/her delegated spending limit and other approval constraints.
6.5.2 Refreshments or meals in private residences should be provided only in very limited circumstances, and must have the prior approval of the Commissioner or Deputy Commissioner.
6.6 Spouse (or accompanying individual)
6.6.1 Hospitality extended to the spouse (or accompanying individual) of a person officially attending an occasion must be consistent with good business practice.
6.6.2 The provision of refreshments/meals to a spouse (or accompanying person) at an Agency event requires the prior approval of a manager at Management Level 1. Exceptional forms of hospitality such as travel expenses, theatre tickets or tours may only be provided when authorized by the Commissioner or Deputy Commissioner.
6.6.3 Travel expenses for an employee's spouse, or an accompanying person, must be reimbursed to the employee, not the spouse or the accompanying person.
6.7 Hospitality Expenses (other than refreshments or meals)
These expenses may be extended, exceptionally, by the Agency when expressly approved by the Commissioner or Deputy Commissioner. In this regard, approval will be considered only in justifiable circumstances such as when dignitaries attend an international conference.
7. Roles and Responsibilities
7.1 Managers are responsible for:
7.1.1 Providing budget and plan information to Resource Management Directorate (RMD) as requested;
7.1.2 Ensuring expenditures incurred when planning and/or authorizing a hospitality event, are cost effective and efficient;
- Performing annual assessment of recurring events or activities, to ensure continued relevance, value for money based on past performance, efficient and economical use of resources;
- Considering means to avoid, reduce or minimize hospitality costs wherever possible, and
- Ensuring value for money when determining the location and the scale of events and the type and number of attendees.
7.1.3 Exercising delegated expenditure initiation authority, or seeking pre-approval of this authority from a higher level manager when required, as set out in this directive and as identified in the Delegation of Financial Authorities; and seeking after the fact approval if actual costs exceed the original estimated cost by more than 10%;
7.1.4 Verifying claims for payment and exercising signing authority under Section 34 of the Financial Administration Act on a timely basis; and
7.1.5 Arranging for accounting and payment of expenses.
7.1.6 Keeping the necessary supporting evidence of their decisions on file for auditing purposes.
7.1.7 Consulting the Guidelines on the Management of Expenditures on Hospitality;
7.2 Local Financial Services Units (FSU) are responsible for:
7.2.1 Verifying accounts and process for payment. In those offices where CAS input is not decentralized, the FSU will input the transactions into CAS and then process for payment.
7.3 Financial Reporting and Accounting Division (FRAD), Financial Administration Directorate is responsible for:
7.3.1 Completing and arranging for the submission of hospitality requests over $3,000 to the Commissioner;
7.3.2 Disclosing total annual expenditures, for all levels of hospitality functions for both federal and non federal employees, including variance analysis from the prior year starting with fiscal year 2011-12. The timing of this disclosure is to coincide with the preparation and release to TB of the Departmental Performance Report;
7.3.3 Work in conjunction with Resource Management Directorate to provide the variance analysis; and
7.3.4 Verification of gated transactions.
7.4 Resource Management Directorate (RMD) is responsible for:
7.4.1 Requesting Headquarters Branches and Regions provide information to produce a hospitality plan for hospitality events with planned expenditures greater than $3K;
7.4.2 Establishing the hospitality budgets, as directed by the Commissioner;
7.4.3 In-year monitoring of actual and forecasted expenditures as part of the Quarterly and Period Projections Exercises; and
7.4.4 Working in conjunction with FRAD to provide the variance analysis.
7.5 Financial Policy, Systems and Control Division is responsible for:
7.5.1 Providing interpretations of this directive and the related procedures instrument.
8. Assessment and review
The Financial Policy, Systems and Control Division of F&A Branch is responsible for the scheduled review of this directive every five years, as well as for any ad hoc reviews deemed necessary.
To support the review process, each Branch and Region is also responsible for identifying and undertaking any monitoring and assessment activities that will help it determine whether the directive's objective remains relevant and achievable and whether its requirements are being adhered to.
9.1 Exceptional Types of Hospitality: Any form of hospitality that requires Commissioner or Deputy Commissioner approval. It consists of gifts to participants, "spousal other than food and beverage" hospitality, "private residence" hospitality and "alcohol purchased" for consumption at any "Hospitality" event.
9.2 Gated Transaction: A transaction selected for 100% pre-payment review under section 33 of the Financial Administration Act (FAA). The payments involve "high risk" transactions including sensitive and large dollar value transactions.
9.3 Government Employee: Any person employed in CRA or Federal Government department/agency, and anyone whose remuneration is paid out of the Consolidated Revenue Fund in such form as a fee, honorarium or per diem allowance.
9.4 Hospitality Events: Consist of two types of events: special hospitality events and work-related hospitality events.
9.4.1 Special Hospitality Events
Circumstances where the Agency provides refreshments or meals at special/social events identified below, or in restaurants regardless of the event.
Examples of these special/social events include:
- Employee recognition occasions – e.g. merit and long term service awards, NPSW events, the annual Police and Peace Officers Memorial Service, etc.;
- Team building events (social activity, non-work related);
- Public openings or prestigious ceremonies;
- A Health Partners/United Way kick off event; and
- Circumstances where visitors to Canada, as members of national or international organizations, are involved in activities relating to those of the CRA or wish to obtain an understanding and appreciation of Canadian life and development or an understanding of the work of the CRA.
9.4.2 Work-Related Hospitality Events
Circumstances where the Agency provides refreshments or meals on an exception basis when it is justified to keep a group together over normal coffee breaks or meal periods to facilitate CRA business. This may be justifiable in situations where there is a tight time frame for completion of the work-related event and/or a suitable refreshment/meal facility is not conveniently located.
Examples of work-related hospitality events, include but are not limited to meetings, conferences, training including Employment Equity Awareness Sessions, in locations other than restaurants
Refers to food and/or beverages.
The Directive on the Management of Expenditures on Hospitality is based on the authorities set out in the legislation below. The directive must be administered and implemented in conjunction with the other references listed below:
CRA policy instruments
- Delegation of Financial Authorities Matrix (PDF, 768KB)
- Financial Administration, Policy on
- Financial Resource Management, Information and Reporting, Policy on
- Financial Authorities, Policy on
- Guidelines on the Management of Expenditures on Hospitality
- Internal Financial Control, Policy on
- Policy Framework for Financial Management and Corporate Finance
- Proactive Disclosure: Travel and Hospitality
- Procedures on the Management of Expenditures on Hospitality
- Travel Directive
Questions about this directive should be addressed as indicated in the following table:
|If you are located in:||Please contact:|
|The Field||The Chief Accountant at your local Financial Services Unit (FSU)|
|Local Financial Services Unit (FSU)||Assistant Director, FRAD|
|FRAD||Senior Project Officer or the Project Leader in the Financial Policies Section of Financial Policy, Systems and Control Division (FPSCD) of F&A|
- Date modified: