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Policies and Procedures

Policy 1269 – Mobile Communication Device Business Expenses

Effective
December 1, 2010
Last Updated
March 4, 2015
Last Reviewed
March 4, 2015
Responsible University Officer
Director of Purchasing Services
Responsible Unit
Purchasing Services

Policy Statement

For the purpose of this policy, Mobile Communication Devices (MCDs) are defined as cellular (“cell” or “mobile”) telephones (including cell phones with two-way communication capability), BlackBerrys and other Personal Data Assistants (PDAs), pagers, wireless cards and any other mobile communication devices.

This policy permits the University to issue a monetary stipend to select employees who meet the policy criteria pertaining to the use of wireless devices for University business purposes. If the University department requires the employee to carry a mobile communication device to perform his/her duties, the employee, with the approval of the supervisor and/or administrative department head, will obtain a personally-owned mobile communication device and service plan. The University does not provide wireless devices or wireless contracts to employees.

Some positions may necessitate that an employee carry a PDA to enable him/her to regularly send and receive time-sensitive University email remotely, and when computer access is not adequate for this purpose. To be eligible for the stipend, the device must support ActiveSync (Microsoft Exchange Server support) in order to access the University’s email, calendar, and other University-related services. All University policies related to storing and transferring secure data via a PDA must be followed.

The stipend ($35 for voice only plan, $70 for voice and data plan) will be included in the employee’s paycheck and reported on the employee’s W-2. The stipend is subject to all regular payroll taxes, but will not be included in the employee’s State retirement computation. Beginning or changing an MCD plan must be completed within ConnectCarolina using the Lump Sum ePAR.

To terminate a plan, employees must complete the Termination of MCD Plan form and submit it to Payroll.

Each department is strongly encouraged to review the necessity of wireless devices, and to select alternative means of communication (e.g. land lines, pagers, mobile radios) when such alternatives would provide adequate service and be more cost effective. Below are some suggested criteria for determining eligibility for the stipend.

  1. The job function of the employee requires considerable time away from his/her assigned work area or office and it is important to the department function that he/she is accessible during those times.
  2. The job function of the employee requires him/her to be accessible outside of normal working hours.
  3. The job function of the employee requires him/her to have wireless data or internet access at all times.
  4. The employee is designated as a “first responder” or “critical” employee.

Recipients of a University mobile device stipend have the following responsibilities:

  1. Negotiating and managing a personal cell phone contract. Each employee is free to select the service provider, plan, and features of his/her choice that meet the job responsibilities as determined by the department.
  2. Assuming all charges associated with the cellular service and device including lost, damaged, or stolen equipment and accessories.
  3. Ensuring the carrier selected has service in required usage areas, such as on campus and/or at home as required by the department.
  4. Establishing himself/herself as the billing party. Regardless of cost, the employee is responsible for any additional expenses above the University stipend.
  5. Maintaining an active service contract for the duration of the stipend.
  6. Notifying the department business manager immediately if the eligibility criteria are no longer met, if service is cancelled, or when the phone number, carrier, or plan eligibility changes.
  7. Employees must provide within three business (3) days of a request from the University's Public Records Officer, billing statements related to University business conducted with an employee-owned MCD.   Prior to providing such statements the employee may redact information related to personal calls, text messages or emails.  Billing statements reflecting University business must be retained for a period of three (3) closed fiscal years.
  8. Each fiscal year employees must provide within three business (3) days of a request from the department chair (or designee) or Purchasing Services, documentation such as an annual contract or a monthly billing statement in order to substantiate that the employee’s monetary stipend does not exceed expenses the employee actually incurs in maintaining the MCD.

Departments with employees who receive a monetary stipend for an MCD have the following responsibilities:

  1. Upon the request of Purchasing Services, collect documentation such as an annual contract or a monthly billing statement from each employee who receives a monetary stipend for an MCD.
  2. Upon the request of Purchasing Services, provide Purchasing Services a list of employees who receive a monetary stipend that exceeds the expenses the employee actually incurs. The list shall include employee name, monetary stipend, and the amount of expense incurred.

Reason for Policy

To govern the use of wireless communication devices by University employees and to provide guidelines, criteria and conditions for wireless communication devices in order to comply with IRS regulations and meet the University’s fiduciary responsibility to the taxpayers of the State of North Carolina.  To comply with the provisions of Office of State Budget and Management policy 5.11 – Mobile Communication Device.

Exclusions

Federal grants and/or sponsored projects may not be used to pay the stipend for a MCD unless specifically allowed by the granting agency. The MCD justification form must be approved by the Office of Sponsored Research prior to submitting to Payroll Services.

Special Situations

The University may issue University-owned MCDs to employees who are required, because of the nature of their employment duties (e.g. public safety, life safety, emergency response, on-call), to have MCD access 24/7 or during their work day. Only University business calls, text messages and data usage are permitted on University-owned MCDs.

Bills for usage of University-owned MCDs are paid directly by UNC-Chapel Hill. These MCDs are on a “pooled minute plan” with a provider selected through the bid process, and employees have no options with regard to the type of plan.

University-owned MCDs are intended for business use only, and supervisors of employees using such MCDs must review monthly bills to ensure that the MCD is used strictly for University business. The department business manager should be able to demonstrate on at least a quarterly basis that under the pooled plan the use by any one employee is less than the $35 or $70 stipend amount. All monthly call statements and review information will be subject to Internal Audit review and must be retained for three years.

An employee who is issued a University-owned MCD must return the device to his or her employing department or unit upon termination from employment or change of duty status.

If a University-owned device is lost or stolen, the employee to whom the MCD is issued must notify their department business manager immediately.

Procedures

1269.1 - Establishing and Paying for Mobile Communication Device Business Expenses

Additional Information

Frequently Asked Questions

Q: Why is UNC-Chapel Hill doing this?
A: Most universities are in varying stages of implementing similar programs. The IRS rules have the same impact on all public agencies – higher education, state agencies, federal agencies, etc., as well as private corporations.

Q: Why is my MCD stipend taxable?
A: The stipend amount is taxable income because you will not be required to provide detailed documentation of your business calls or reimburse the University for any personal calls. It is possible that the stipend will not cover your complete business usage.  In that event, you should be able to claim the remainder as a business deduction on your personal tax return. Check with your tax preparer in the event of new or changed filing rules.

Q: Will the taxable stipend be used to calculate my retirement or other benefits?
A: No. Although the stipend will be paid to you as additional salary, it will not be used to determine University retirement coverage or other benefits.

Q: The stipend I receive is not enough to cover my entire phone bill. May I request a reimbursement for the balance?
A: No. The intent of the stipend is to provide compensation for business-related activity on a personal MCD without the user having to submit documentation for business-related calls. The allowance is not intended to cover personal use of the device.

Q: If I decide to get a device that has a voice and data plan, how can I make sure that it will work with the University’s email service?
A: You need to purchase either a BlackBerry device or a PDA/Smart phone that uses Active Sync in order to communicate with our e-mail server.  Be sure to purchase a plan that includes data service. If you buy a BlackBerry and want to use the University’s BES (BlackBerry Enterprise Server) be sure the cellular service provider knows that so the correct data plan is assigned.  If your device uses Active Sync or iMAP, the ITS Help Desk (919-962-4357) can help you with those settings.

Q: I have been paying for personal calls made on my University-owned MCD. Aren’t I meeting the IRS requirements?
A: Under IRS regulations it is not enough to simply pay for your personal calls and say all the rest are business calls. The IRS requires that the use of an employer-provided cell phone be documented in a very detailed manner. In addition to identifying all personal calls on the employee’s monthly cell phone statement, the employee must note the purpose of each business call. In the absence of such documentation, the IRS can treat all undocumented calls as personal and the value of those calls as additional wages, even if the calls were mostly business calls.

Q: Why is a cell phone treated differently than my desk phone?
A: Because a cell phone is portable and may be taken off the employer’s business premises, Congress established the detailed business substantiation rules applicable to this equipment and similar devices. The business use rules that apply to equipment intended to stay in your office, such as a desk phone, are less restrictive.

Q: How do I choose a calling plan?
A: Your business manager or department head has given their approval for you to get a wireless phone for you to use for business purposes here at the University. What calling plan is right for your needs? You don't want to select a plan with too few or too many minutes, or worse yet, a calling plan that doesn't fit the areas where you call and where your calls originate. Ask yourself two simple questions to determine the perfect plan.

  1. How am I going to use the phone?

Will it be used for emergencies only? Will it be used for calling back to the office while you're on the road or roaming the campus? Do you make a lot of local calls or will you be making a lot of long distance calls outside of the state? Do you travel a lot? When traveling, are you in constant touch with the office, or is the office in constant touch with you?

  1. How many calls am I going to make and receive each month?

On average, a business call is three minutes in duration. Using this average plus the amount of calls you make or receive each month can help you decide how many minutes you need. If you use the cell phone just to keep up with what's going on at work or to check your voice mail, a local package might be the best choice, but you'll pay extra for long-distance calls. If you're going to make frequent long-distance calls or travel a lot and make frequent calls back to the office, a national plan is the best choice.

Q: Does everyone get a taxable allowance for a personally-owned MCD?
A: No. You should only receive an allowance if your department requires that you carry an MCD.

Q: Can I keep or purchase from the University a previously-used MCD?
A: Unfortunately, no. Equipment purchased by the University is University property and must be disposed of according to UNC-Chapel Hill Procurement Services Policy Statement 604.1, Disposing of University-owned Surplus Property. MCDs that are no longer administered through UNC-Chapel Hill ITS/Telecommunications must be returned to the department administrator, who will then forward to Surplus Property.

Q: I make personal cell phone calls only during “free” calling periods, i.e., evenings and weekends, or by using “free” cellular-to-cellular calling. Because those calls are free, they don’t count, right?
A: No.  You actually pay for “free” calls as a part of the base cellular service plan.  Only University-related business calls are allowed on a University-owned device.

Q: If I choose to purchase a smart phone (e.g., BlackBerry, iPhone, etc.) with my equipment allowance in order to access University e-mail, calendaring or other services, can the University recommend which devices will work best and will be supported by the University?
A: Yes. Remember that technology changes regularly so you should speak with ITS Communication Technologies (phone 919-962-4357) first to learn which devices the University supports before speaking with a cellular service provider.  Basically, any BlackBerry device or anything that uses ActiveSync or iMap to communicate with the e-mail server is supported.

Q: How does the department manager decide who needs an MCD?
A: The following are factors considered:

  • Travel (out of office on a weekly basis)
  • Types of calls made
  • Number of business calls on a weekly basis
  • Need to be available (for emergencies or decision making)
  • Coordination between work sites
  • Lack of available land lines

Q: My stipend request was denied. I need an MCD device to do my job. How can I get the stipend approved?
A: Approval or denial of the stipend is subject to your chain of command – your supervisor, his or her supervisor, etc. Stipends are not an inherent right simply because you were provided a phone previously. You need to discuss the issue with your supervisor to determine why the stipend was denied.

Q: I have a University-owned MCD and I want to terminate my service contract. Who is liable for the termination fees?
A: If, prior to the end of a MCD contract, a personal decision, employee misconduct, or misuse of the device results in the need to change or end the MCD contract, the employee will bear the cost of any associated contract termination fees if such fees are assessed by the service provider.  If, prior to the end of the MCD contract period, a University decision is made unrelated to employee misconduct which results in the need to change or end the cellular device contract, the department will bear the cost of any associated contract termination fees at the University’s discretion, if such fees are assessed by the service provider.  There are no termination fees for the University’s BlackBerry Enterprise Server accounts.  Your administrative contact must notify ITS/Telecommunications to cancel the service and determine the best use of the cellular device.

Q: I have a personally-owned MCD and I want to terminate my service contract. Who is liable for the termination fees?
A: For personally-owned devices, the employee is fully responsible for paying the monthly bill plus additional charges, including termination fees.

Q: I currently have a state-owned BlackBerry and I’m licensed on the Enterprise Server. What happens when I choose a personal plan and surplus my current device?
A: The University will transfer your existing BES (BlackBerry Enterprise Server) license to your new BlackBerry. Contact the ITS Help Desk at 919-962-4357 within 30 days of your decision to change to a personal plan. They will help you with your new activation.

Q: If I transfer my BlackBerry service to a personal plan and get a new BlackBerry what should I do to activate University email with the device?
A: If you were using a University-owned BlackBerry before and were licensed on the University’s server, your license will transfer.  Since you have a new device you will have to do a new Enterprise Activation.  Be sure to tell your cellular service provider that your e-mail service will come from an Enterprise Server so you get the right type of data service assigned.  Call 919-962-4357 and request Enterprise Activation for your BlackBerry.  Be sure to tell them you were licensed on the server before and now you are activating a new device.

Q: When my current University-paid plan expires, will I need to purchase my own personal phone and plan for business purposes?
A: Yes, unless you are one of the employees designated as exempt by your department. Many wireless vendors offer discounts to University employees. See Human Resources Employee Discounts webpage for details.

Related Data

1269.1.1f – Termination of Mobile Communication Device (MCD) Plan Form
604.1 - Disposing of University-Owned Surplus Property
Payroll Mobile Communication Device Stipend Forms Deadlines - See Biweekly and Monthly Payroll deadlines

Contacts

SUBJECT CONTACT TELEPHONE FAX E-MAIL
Mobile Communication Devices Purchasing Services 919-962-3774 919-962-0636 purchasing_team@unc.edu

History

Revised:
March 4, 2015: Updated information in Policy Statement on form requirements for plan.
May 30, 2013: Added the requirement for an annual review of contract or bill.
April 5, 2011: Added OSR in Exclusions.
December 1, 2010