Employees Not Issued a Company Cell Phone (105.008)

Employees Not Issued a Company Cell Phone (105.008) - Policies, Administrative, UWMF, UWMF-wide, Finance


J:\AP\Policies & Procedures\ORIENTATION\Cell Phones Policy 2008-01.doc
Updated 3-16-08


This policy is effective January 1, 2008 and is based on discussions with the
University of Wisconsin Medical Foundation auditors and a review of IRS

UWMF will not directly pay cell phone bills for employees. Employees are responsible for
paying their own cell phone bills. The UWMF does recognize that when used for business
purposes, home phones and cell phones are an appropriate reimbursable business

Cell Phone Purchases.
A physician can be reimbursed for the purchase of a cell phone through his/her
professional expense account with the understanding that the use of the phone will
primarily be for business purposes. Additional costs for phone features that are not
necessary for business purposes will not be reimbursed.

Options for Reimbursement for Cell Phone Charges.
Accounting for usage of cell phone charges paid for with UWMF funds can be tedious, but
is required by policy and by IRS regulations. If the proper accounting and reimbursement
for personal usage is not performed in a conscientious manner, the entire cost may be
considered taxable to the employee and will be added to the employee’s W-2 form as
wages. The employee must be able to identify the number called, date, time, business
purpose and length of each business call.

1. Pay the employee a flat fee per month with no back up required. The flat fee
reimbursement is taxable to the employee as there is no substantiation of business
versus personal use. This makes it a reimbursement under a non-accountable plan
and taxable to the employee.
This payment would be processed through Payroll. The amount reimbursed
would be subject to withholding and reported on the employee’s W-2 as taxable
Physician requests for a flat rate cell phone allowance should be submitted to
the Physician Compensation Analyst. This request should be not be included on
the physician’s accounts payable reimbursement request. Employee requests
for a flat rate cell phone allowance should be submitted to the Payroll
This option is not available for non-UWMF employees.

2. Submit the entire cellular bill breaking out personal vs. business calls. UWMF will
reimburse based on the percentage of calls that are business related.

J:\AP\Policies & Procedures\ORIENTATION\Cell Phones Policy 2008-01.doc
Updated 3-16-08
If the number of calls falls within the allowed minutes, the employee would take
a percentage of the business to personal calls and this would be the amount
that would be reimbursed. Example: The employee’s cell phone plan allows
1000 minutes for the month. If 650 minutes are for business calls and 350
minutes are for personal calls, UWMF would allow 65% of the monthly charge.
The employee may be reimbursed for actual roaming charges and related
charges for individual calls.
Proof of payment is required for reimbursement of actual business calls.
Many phone plans have additional features such as: music and video player,
digital camera, Internet access, PDA, game console, etc. Additional costs for
phone features that are not necessary for business purposes would not be
reimbursed. UWMF can reimburse only for the portion of the monthly service
that is related to business use. The employee will need to identify the elements
of the monthly service that are for personal use and subtract these charges from
the monthly bill.
If an employee has a dedicated cell phone that is used ONLY for business calls,
the employee may submit the entire cellular statement for payment. A note
must accompany the cellular statement certifying that all calls placed or received
from this phone are for UWMF business.

3. Develop a reasonable percentage amount based on a historical analysis of past bills
personal vs. business calls.
This percentage must be reviewed periodically for accuracy (no less frequently
than annually).
The Department must sample an employee’s cell phone statements for three
months and calculate an overall average. Although this option is
administratively easier to implement, it is not 100% free from risk since the
reimbursement is based on a presumed business use percentage. The
department must demonstrate that it used reasonable statistical sampling to
come up with the presumed business versus personal use based on a survey of
actual cell phone bills for a period of time.
Documentation of the analysis must be provided to the Accounts Payable

All reimbursements for cell phone usage must be for business calls only. This is true no
matter which reimbursement method is used. If an employee uses his/her cell phone to
call home, this is a personal call and would NOT be reimbursed.

The UWMF (as a department expense) will pay for phones and all charges if a phone is
used by a specialty/division/section as an “on-call” phone that is shared by all physicians
or employees in that specialty for only that purpose.