Protocol Manual

Chapter 9
Official Hospitality Outside Canada

Revised 2005-12-16

Main Table of Contents

Table of Contents

Official Hospitality Outside Canada

9.1 Introduction

This edition of Chapter 9 is effective December 16, 2005 and replaces the version dated October 19, 2005.

The purpose of this chapter is to ensure co-ordination and cost-effectiveness of official hospitality abroad and a consistent interpretation of the relevant Treasury Board directives by departments and agencies with program personnel on foreign assignment.

The use of hospitality funds at Missions must be focused on building and maintaining networks of local contacts to support strategic objectives and priorities of the Government of Canada as well as the Department. At the same time, hospitality events should draw on innovative and modern approaches such as partnering with the business community, not-for-profit sector and international organizations.

Official hospitality (O.H.) outside Canada is governed by the provisions of two Treasury Board directives: the Heads of Post Directives (TB Minute 692275 of October 2, 1969) and the Foreign Service Official Hospitality Directive (TB Minute 694890 of February 12, 1970). These directives are complementary and together constitute the basis for the allocation and spending of funds for O.H. purposes to, respectively, the Order-in-Council appointed heads of Canadian diplomatic and consular missions and all other government employees abroad who have official hospitality responsibility.

Employees, including Heads of Mission, should be reminded that when receiving hospitality, they must consider the Value and Ethics Code for the Public Service as well as the Code of Conduct for Canadian Representatives Abroad whereby measures must be taken to prevent real, potential, or apparent conflict in the workplace.

9.2 Definitions

9.2.1 Head of Mission (HOM)

For the purpose of the policy and guidelines, the Head of Mission is the senior officer having charge of the mission as defined by the Heads of Post Directives.

9.2.2 Program Manager

The Program Manager is the senior officer responsible for the conduct of a departmental or agency program in the area of accreditation.

9.2.3 Committee on Mission Management (CMM)

The Committee on Mission Management is a group of senior Program Managers, under the chairmanship of the HOM, who provide the HOM with advice and assistance in carrying out of mission programs.

9.3 Policy Responsibility

9.3.1 Director General, Corporate Finance, Planning and Systems Bureau (SMD)

The Director General, Corporate Finance, Planning and Systems Bureau (SMD) is accountable to the Deputy Minister for the effective application of hospitality policy in the Department. SMD will develop new policy initiatives as required, provide guidance to missions, monitor implementation through internal audit, and follow-up on audit reports (including recovery action, where appropriate).

9.3.2 Assistant Deputy Ministers (ADM)

ADMs will have specific responsibility for the consistent application of the hospitality policy within their regions.

9.4 Hospitality Funds Allocation

Official hospitality funds for persons to whom the Heads of Post Directives apply are allocated by appropriate bureaus within Foreign Affairs Canada; similar funds for other personnel are allocated by their respective departments or agencies.

The HOM will be provided annually with sufficient funds, allocated by the appropriate bureaus, to meet the reasonable costs of providing official hospitality in support of government programs abroad. Hospitality funds will be allocated by the HOM after discussion with the CMM, subject to budgetary restrictions, in proportion to the hospitality requirements of the program activity, not the rank or position of the employee concerned. The CMM must make provision for a special allocation from contingency funds, or reassess its spending priorities, to cover the hospitality costs of major events not foreseen at the time of finalizing the mission's annual hospitality allocations.

Hospitality funds, advances or allocations are not a personal allowance, they are program resources allocated to designated individuals strictly on the basis of program needs. All advances and expenditures are fully accountable, and detailed records of all expenditures must be maintained and submitted for approval to mission management. Claims for hospitality funds not adequately substantiated may be subject to recovery action.

Recipients of hospitality funds should plan their expenditures with a view to achieving specific objectives as economically as possible, taking into account local conditions and the nature of each official hospitality activity.

It is recognized that under certain circumstances, spouses may be required to host or attend official hospitality functions, in support of Mission programs or their own diplomatic responsibilities. Expenses incurred on these occasions must have the prior approval of the HOM. Spouses must abide by provisions of this policy, and any expenses must be claimed by the officer to whom the hospitality allocation has been provided (i.e. the spouse cannot be reimbursed directly).

9.5 Application

Unless otherwise stated, these guidelines are applicable to employees stationed abroad with: departments, agencies and corporations of government as specified in Schedule I, Schedule I.1 and Schedule II of the Financial Administration Act or any entity considered a department or a departmental corporation pursuant Section 2 of the Financial Administration Act who are in receipt of official hospitality funds regardless of their rank or the extent of their involvement in hospitality activity outside Canada. They do not apply to persons who are stationed in Canada and who go abroad on travel status or who are assigned abroad to attend training courses.

When on travel status outside area of accreditation, employees will continue to use the provisions of this policy when extending or receiving hospitality. All expenses incurred must be supported by receipts and costs should be reasonable taking into consideration the number and rank of guests, form of hospitality, and location of the function.

Members of the Canadian Forces (CF) and civilian employees of the Department of National Defence (DND) assigned to Canadian diplomatic missions may be provided with official hospitality funding by DND under the provisions of Canadian Forces Administrative Order (CFAO) 205-24. This document is in concert with TB direction while at the same time acknowledging specific requirements unique to CF/DND personnel serving in a diplomatic capacity abroad. CF members and DND employees are, nevertheless to conduct their hospitality programs in accordance with the basic guidelines and policies as established by the CMM and HOM.

9.6 Roles and Responsibilities

9.6.1 Assistant Deputy Ministers

Assistant Deputy Ministers are responsible for ensuring that the use of hospitality funds aligns with strategic, branch and government-wide objectives.

9.6.2 Heads of Mission

Consistent with the overall authority endorsed by Cabinet in its decision of July 31, 1973 on the role of the HOM, the HOM, through the CMM, will be responsible for co-ordinating the official hospitality activities engaged in by personnel of all government departments represented at the mission. The HOM must ensure:

• the CMM is kept informed of the intended hospitality program (designed to support all mission programs);
• unit costs of providing the principal forms of official hospitality are regularly reviewed and that established levels are not exceeded;
• appropriate guidance in planning and organizing is given to less experienced employees participating in official hospitality activities;
• there is consistency in the style and manner of extending and receiving hospitality by employees of all departments and agencies at the mission;
• forms and standards of official hospitality activity are appropriate to intended purposes and in harmony with local practices;
• the requirements of good taste are observed and extravagance avoided;
• records of official hospitality activity and related expenditures are maintained and that record-keeping and reporting is done in accordance with approved procedures and forms;
• allocations provided to employees departing part way through the fiscal year are pro-rated based on the number of months to be spent at the mission in that fiscal year.
  For example: an employee who has an annual allocation of $1,800 and is leaving the mission July 31 would be entitled to an allocation of $600 ($1,800/ 12 X 4 months). His/her successor should have access to the balance of $1,200; and,
• the proper stewardship of (hospitality) resources at Mission.

9.6.3 Program Managers

In order to ensure that official hospitality activities are undertaken effectively by recipients of official hospitality funds, mission Program Managers should ensure that the HOM is kept informed and is consulted regarding proposed hospitality activities in support of the programs for which they are directly responsible.

9.6.4 Management Consular/Administrative Officers (MCO/MAO)

MCO/MAOs at Missions must ensure that:

• all employees in receipt of hospitality allocations, including those of partner departments, are provided with a copy of this policy;
• hospitality allocations are provided in advance on a quarterly basis if requested, and accounted for at the end of each quarter;
• hospitality claims are duly completed in accordance with this policy and approved by an officer with delegated authority;
• hospitality claims are verified to assure compliance;
• expenses not supported by receipts or non-admissible costs are disallowed;
• amounts reimbursed to employees later determined as inadmissible are immediately recovered from the employee; and,
• unit costs, where used, are reviewed and updated on an annual basis.

9.6.5 Recipients of hospitality allocations

Recipients (employees) of official hospitality allocations should demonstrate, to the satisfaction of the Program Manager, that proposed official hospitality activities contribute to the achievement of program objectives. The aim of this continual exchange of information and consultation is to establish realistic priorities, to avoid duplication and gaps in planning and to avoid hospitality activities of marginal value.

9.7 Purpose and Objectives of Hospitality

9.7.1 Purpose

The use of hospitality funds at missions must be focused on building and maintaining networks of local contacts to support strategic objectives and priorities of the Government of Canada as well as the Department. The first priority of official hospitality abroad should be to facilitate the objectives of the various programs of the mission by establishing and expanding close personal contacts with well-informed and influential members of local communities or participants in the work of not-for-profit and international organizations.

Hospitality funds may also be used to build Canadian efforts and strategies, and as well as to recognize the contribution of Mission employees. Although official hospitality should normally be offered to non-Canadians, on an exceptional basis there are occasions where official hospitality may be extended to Mission staff. These include costs of: functions involving Mission staff required to brief ministerial or senior official delegations; refreshments, meals or both if Mission employees must participate in work sessions extending over meal hours or beyond normal working hours; a formal recognition ceremony for employees (e.g. Long Service Awards); one annual Mission team building event, such as a seasonal gathering to be hosted by the HOM (only the HOM can offer hospitality to employees, contract staff, and their families). Missions must use discretion and due regard for economy when identifying such occasions and keep costs to the minimum required for the function i.e. costs must be substantively lower than equivalent diplomatic functions.

9.7.2 Main objectives

Particular objectives and occasions for official hospitality are principally, though not exclusively:

• to influence policy advisors, decision makers and opinion formers within the principal groupings of a foreign community;
• to bring together visiting Canadians and appropriate local people with similar business, professional or occupational interests;
• to assess the potential usefulness of and to cultivate qualified individuals in fields of particular Canadian interest;
• to provide additional opportunities for exchanging views with local contacts on international and local issues of interest to Canada;
• to celebrate special occasions or developments in Canada's bilateral relations with other countries; and
• to maintain contacts with work-related agencies and individuals who assist in program delivery.

9.8 Location of Hospitality Functions

9.8.1 Residences or public areas

Official residences and other accommodation should be utilized effectively for official hospitality purposes. Where staff accommodation is inadequate, employees should make use of whatever outside facilities are appropriate to the levels of hospitality they are required to offer.

9.8.2 Office premises

Where government office premises abroad include space suitable for receptions or meals, these facilities should be available for use by all programs/employees with official hospitality responsibilities. The CMM should establish guidelines for use of office premises for hospitality functions.

9.8.3 Restaurants, clubs and other establishments

Where restaurants and other commercial establishments such as club facilities are well-suited to Canadian official hospitality requirements, this alternative may be used. The unit costs established for these events must not be exceeded, except in highly unusual circumstances as justified by the claimant.

Canadian hospitality should not be extended in restaurants, clubs, or other establishments that practice discrimination by refusing to make their facilities and services available to particular groups of persons.

9.9 Admissible Costs

All forms of official hospitality should be planned and arranged in a way that will minimize costs consistent with:

• the status or rank of the guests;
• the number of persons expected to attend;
• the circumstances giving rise to the hospitality; and,
• the general standard of hospitality offered locally by the representatives of other countries with interests commensurate with those of Canada.

The cost effectiveness of hospitality should be determined before, not after, the event. It involves giving, as far as possible, a definite purpose to the occasion, making a careful selection of guests - both for their individual value as contacts and for the manner in which they complement the various occupations and interests of others - and choosing a standard of hospitality suitable to the occasion.

9.9.1 Unit cost for hospitality functions

With the exception of smaller missions where the number of hospitality functions is limited, each mission CMM must establish unit costs for hospitality functions occurring at commercial establishments (e.g. restaurants) as well as for those held in the Official Residence and in staff accommodation. These unit costs should be established on the basis of a representative sample of the actual costs for typical functions (e.g. cost out two or three lunches, dinners and cocktails) and must be reviewed by the CMM on an annual basis. (It should be noted that bulk purchases of alcoholic beverages must not be used in the determination of unit costs). It is recommended that unit costs be determined for various forms of hospitality, including but not limited to: breakfast; lunch - regular; lunch - special guest/occasion; dinner - regular; dinner - special guest/occasion; buffet; and reception. Unit costs should take into consideration the following items: food and beverages, flowers, favours, candles, rental of extra tableware or flatware, catering charges, laundry of table linens; and, casual help for a specific function such as cooks, waiters, bartenders and cleaning services necessitated by specific functions.

The CMM should also develop separate guidelines for reasonable costs of domestic help directly attributable to each hospitality event. At smaller missions, where the number of hospitality functions is small, unit costs are not appropriate and actual costs of hospitality shall be reimbursed.

Official hospitality functions not held at the Official Residence or staff accommodation should be reimbursed based on actual costs (should fall within the unit costs determined for the function) and be supported by receipts.

9.9.2 Admissible Costs

Admissible costs are those for services and expendable goods that are used or consumed on any occasion when an employee extends or receives official hospitality in support of an approved program activity. These costs include items such as:

• food and beverages, flowers, favours, candles, rental of extra tableware or flatware, catering charges, laundry of table linens, and printing and mailing of invitations (to be charged as printing/mailing expense);
• casual help for a specific function such as cooks, waiters, bartenders and cleaning services necessitated by specific functions;
• costs related to entertainment, tickets to events;
• reasonable gifts for hosts or hostesses when hospitality is received (normally Canadian products);
• local transportation to and from function (the CMM should provide guidance as to what is reasonable in local circumstances);
• contributions by the HOM to the Dean of the Diplomatic Corps;
• rental of special clothing in circumstances where special/formal attire is a requirement of attending an approved hospitality function; and,
• care givers for children.

It should be noted that these costs may only be reimbursed when incurred for an approved hospitality function and are supported by receipts.

9.9.3 Club membership fees

Fees for membership in a club may be paid when an identifiable program benefit exists and claimed only by Heads of Mission and Program Managers. The club membership may have additional personal, social or recreational benefits, and where these benefits are significant, e.g. sports facilities, not more than 50 percent of the cost of a membership may qualify as an admissible cost. Admissible club membership fees may include fees charged for joining and belonging, and may consist of transferable memberships, bonds or shares in a club which should, where possible, be acquired in the name of the mission and not an individual employee. All requests for Club Membership fees must be approved in advance by the geographic ADM, upon the recommendation of the HOM. For personnel from other government departments, Head of Mission recommendation is required, followed by their ADM approval.

Fees for membership in a club must be coded to "membership fees", General Ledger Account 41300 in IMS. Club membership fees should be charged to the Hospitality Budget and can be tracked in IMS using an Internal Order Number.

The following guidelines will help distinguish club membership fees from organizational membership fees:

• Club memberships approved under the Official Hospitality Outside Canada directive may provide personal, social and recreational benefits, e.g. sport facilities, in addition to the benefits that accrue to the department.
• Organizational memberships approved under the department's Membership Fees policy directly support a departmental program or contact with a segment of the public most concerned with the department's operations, e.g. membership in a Chamber of Commerce or membership in a Press Club.

9.9.4 Bulk purchases of alcoholic beverages

Where bulk purchases of liquor, beer, wine, etc. are made for representational purposes, a written inventory of all purchases (to include as a minimum price, quantity, date of purchase, and description) must be maintained. As alcoholic beverages from inventory are used for official hospitality purposes, notation of the function at which they were served must be made on the inventory. The inventory must be updated, as a minimum, at the end of each quarter. A physical count of the stock on hand must be conducted at least once every fiscal year, reconciled with the inventory, and a copy attached to the employees' last quarter hospitality claim. This process must also be repeated prior to their departure from the Mission.

Employees may use their hospitality advance to cover the cost of bulk purchases, however, in instances where an employee's hospitality advance is not sufficient to cover the cost of bulk purchases of alcoholic beverages, the Mission should charge the cost of bulk purchases for representational purposes to the Mission's operating budget, hospitality G/L 41369. For reporting purposes, it is recommended that bulk purchases made on behalf of the HOM be charged specifically to his/her IMS Cost Center.

Any associated shipping, freight, etc. costs must be charged to the appropriate G/L and not to hospitality.

The cost and quantity of alcohol consumed from inventory for each official hospitality event must be noted on the Hospitality Diary EXT 052. In cases where an employee has used his/her hospitality advance, this cost must also be reported and claimed on the Official Hospitality Advance and Expense Reporting form EXT 904 when the hospitality advance is settled. If the cost has already been charged against the Mission budget, the cost must not be reported and claimed on the Official Hospitality Advance and Expense Reporting form. However, as stated above, it must be noted on the Hospitality Diary. For those subject to reporting of hospitality events under the Disclosure of Travel and Hospitality Expenses (DTHE) initiative, bulk purchases must not be entered in the DHTE as a lump sum cost at time of purchase, but rather when consumed and reflected in the total cost of the event as entered on the Hospitality Diary.

It should be noted that bulk purchases of alcoholic beverages must not be used in the determination of unit costs (see section 9.9.1).

9.9.5 Tips and Gratuities

In exceptional circumstances, there may be occasions at missions where a cash tip or gratuity is necessary at certain times of the year (e.g. Christmas or other religious events) in accordance with local custom or in direct support of mission operations. The norm, however, should always be a non-cash gift (e.g. promotional items such as agendas, maple products, books, pins).

The HOM, in consultation with the CMM, must make a determination of the occasions for which gratuities (cash tips and non-cash gifts) would be required and what a suitable gratuity would be, taking into consideration local practise and custom. A distinction must be made between tipping for services provided directly to individuals (e.g. paper boy) and those provided to the mission as a whole (e.g. mail delivery). Normally, tips for personal services to individuals may not be charged to the Crown. Where it is agreed that a cash gratuity is absolutely necessary, the decision must be justified in writing and kept in mission files for audit purposes. Non-cash gifts should be coded to hospitality, except for promotional items which has its own IMS G/L (41997). Cash tips or gratuities must be a direct charge against the service provided.

9.10 Non-Admissible Costs

Non-admissible costs under this policy include items such as:

• Since their employment is normally subject to the provisions of different directives or regulations, the expenses for employees such as chauffeurs, gardeners, security guards or watchmen are not admissible;
• The costs of regularly employed domestics are not admissible, except where they are employed for a specific hospitality function outside of normal working hours, in which case the cost must approximate the cost of casual help that would otherwise be hired for the event;
• Costs to purchase linens, glassware, china and silver and other durable goods such as furniture and equipment are not admissible expenses. However, if deemed appropriate by the CMM, the mission may purchase hospitality items (glassware, china and silver) for staff use;
• Dry cleaning of office/representational clothing; monthly purchase of flowers for the Official Residence;
• Gratuities or gifts for Official Residence or other staff, gratuities to other individuals not employed by the Mission (Note: in circumstances where an invoice is sent to the tenant for customary service fees, these are not hospitality costs), donations to staff parties, charitable donations;
• Gifts for staff or local contacts of a congratulatory nature (births, marriage, baptism, birthdays, etc.); and,
• Items considered as “promotional items” (Canadian products). These are not a hospitality expense and should be charged to the IMS General Ledger Account for promotional items.

9.11 Reports and Record Keeping

There are two forms used to record and submit hospitality expenses, the Hospitality Diary (EXT 52) and the Official Hospitality Advance and Expense Reporting form (EXT 904). The originals of both these forms along with supporting receipts must be retained by mission administration for seven years and will be open to examination by departmental auditors. Employees may wish to keep copies of the completed forms for their own files.

9.11.1 Hospitality Diary.

All recipients of hospitality funds, including HOMs, are required to keep records of all hospitality extended and received using the Hospitality Diary form (EXT 52). When hospitality is extended or received, the Hospitality Diary must include, as a minimum, the following information:

• the date, form and location of the function;
• program objective;
• purpose of or circumstances giving rise to the hospitality function;
• names, positions, and related particulars of all persons who attended or hosted the function;
• evaluation of the function;
• all costs incurred, detailed as appropriate; and
• signature of employee.

Receipts for all hospitality costs, including club fees must be obtained and submitted with Hospitality Diaries in support of hospitality claims, including those of the HOM.

NOTE: The Hospitality Diary is an open book that is accessible for consultation and requests for access to information; it cannot be purged.

9.11.2 Official Hospitality Advance and Expense Reporting form.

The Official Hospitality Advance and Expense Reporting form (EXT 904) must be completed for each disbursement (advance or claim) related to official hospitality. Based on authorized hospitality allocations, the HOM or senior departmental Program Manager of the department to which the expenditures will ultimately be charged may approve the issuance of an accountable advance to an employee of up to 25 percent of his or her annual allocation. The advance is to be accounted for within ten days following the end of quarter for which it was provided. Advances that have been fully expended may be accounted prior to the end of the quarter and a new advance issued. Refer to the Hospitality Advance Accounting Procedure located on SMD’s website for the appropriate accounting and control of quarterly hospitality advances.

Before an accountable advance is issued, an employee shall submit to the HOM or to the Program Manager (through the MCO/MAO) the accounting or claim for expenditures made from any previous advance for hospitality expenditures.

Any unspent advance balances outstanding at the end of the fiscal year are to be refunded by the employee before the mission accounts are closed. Employees leaving the mission must account for in full all outstanding advances and refund any unspent balance in advance of their departure from the mission.

9.11.3 Approval and routing of hospitality forms

The Official Hospitality Advance and Expense Reporting form (EXT 904) along with the related Hospitality Diary (EXT 52) must be submitted and approved under Section 34 of the Financial Administration Act by the HOM or Program Manager of the department to which the expenditures will ultimately be charged. The MCO should review all claims in advance of Section 34 of the FAA approval to ensure all amounts claimed are in accordance with the policy. The originals of both forms, along with original receipts, must then be submitted to the mission Accounting Section for audit and payment in accordance with Section 33 of the Financial Administration Act.

9.11.4 Receipts

All hospitality expenses claimed on the EXT 904 must be supported by original receipts (refer to departmental policy Acceptable Forms of Receipts for Expense Claims). Employees shall normally be reimbursed actual costs, except for those expenses claimed as a "unit cost". In cases where receipts are not included, claims will be disallowed and hospitality funding recovered. When "unit costs" are claimed, claimants should attach any supporting receipts as evidence of the event.

9.11.5 Receipt of gifts

All gifts of a personal nature received by mission employees must be documented in the Hospitality Diary, to comply with the Values and Ethics Code for the Public Service. The information recorded in the diary must include: the donor; under what circumstances; and, an estimate of the gift's value. Requirements regarding Gifts to the Crown are set out in the department's Material Management Manual, Volume 1, Chapter 16 - Gifts to the Crown.

9.12 Acting Head of Mission

An employee who is required to act as "Head of Mission" or who has been placed in charge of his or her mission for an extended period may be provided with funds by the department(s) responsible for the conduct of individual mission programs in respect of his or her additional official hospitality obligations during the period he or she has charge of the mission. Existing HOM funds are not to be used during this tenure without the explicit concurrence of the Geographic or Functional Director General as communicated through the Area Management Office.

All other policies and procedures apply.

9.13 Exceptions

Any exceptions to the guidelines must receive prior written authorization from the Deputy Minister through SMD.

9.14 Evaluation

From time to time the Department will evaluate the policy and guidelines on official hospitality outside Canada contained in this chapter to determine their adequacy and effectiveness and the degree of compliance by all concerned.

9.15 Enquiries

Enquiries should be addressed to smsp@international.gc.ca