Excessive or Luxury Expenditure Policy
The purpose of this policy is to establish parameters and internal controls governing the expenditures of Workers Federal Credit Union (together with its subsidiaries and controlled affiliates, referred to hereafter as WCU). Expenditures
of WCU should be customary, prudent, consistent with applicable laws and regulations, and reasonably related to WCU's business objectives and needs. This policy identifies expenditures that are excessive or luxury expenditures,
creates processes that are reasonably designed to eliminate such expenditures, and establishes accountability for compliance. Routine operating expenses, capital expenditures, and other reasonable expenses are not prohibited by
WCU has the authority to provide compensation and benefits that are reasonable. This policy establishes a prohibition on expenditures that are excessive or luxury expenditures as required by the Department of the Treasury's Emergency Capital Investment Program regulations (31 CFR Part 35), and as may be required by other statures and regulations.
This policy is the responsibility of WCU's Enterprise Risk Management Committee (ERM). The ERM has approved this policy and will review compliance with this policy no less frequently than annually, and summary data on excessive or luxury expenditures will be reported to the committee as part of the compliance review.
This policy applies to all employees, officers, and directors of WCU with regard to any expenditure of WCU. In making any expenditure on behalf of WCU, employees, officers, and directors should consider whether the expenditure is an excessive or luxury expenditure that is prohibited under this policy.
Excessive or Luxury Expenditures
“Excessive or luxury expenditures” means excessive expenditures on any of the following to the extent not reasonable or appropriate expenditures for business development, staff deployment, reasonable performance incentives, or other similar reasonable measures conducted in the normal course of WCU's business operations:
- Entertainment or events. This category includes fees, dues, ticket costs related to social, athletic, artistic, and dining clubs, activities, celebrations, or other events, and similar expenditures. Expenditures for charitable contributions and charitable events are not prohibited under this policy.
- Office and facility renovations. This category includes costs and allowances for office renovations, including expenditures related to furniture, art, office personalization, interior finishing, design and decoration, and similar expenditures.
- Aviation or other transportation services. This category includes charter fees, tickets, slip or docking fees, vehicle installment payments, reservation and travel agent expenses, and similar expenditures associated with transportation services (e.g., airline, train, rental cars, or vans). Mileage reimbursable according to current Internal Revenue Service mileage rates is exempt from this policy. The principal executive officer may establish or delegate to an appropriate executive officer the authority to establish processes for reimbursement of reasonable travel expenditures, which processes must be reviewed by executive management no less frequently than annually.
- Tax gross-ups. This category includes any reimbursement of taxes owed with respect top any compensation. This category does not apply to tax equalization agreements for employees subject to tax from a non-U.S. jurisdiction. Other similar items, activities, or events for which WCU may reasonably anticipate incurring expenses or reimbursing an employee for incurring expenses. For the avoidance of doubt, reasonable capital investments in technology, equipment, and similar items that expand the long-term capability of an ECIP recipient to provide products and services to its customers and community are not excessive or luxury expenditures. The principal executive officer may establish or delegate to an appropriate executive officer the authority to establish processes for the evaluation and approval of expenditures in the preceding categories that are not luxury or excessive expenditures and that are not otherwise exempt from this policy. These processes must be reviewed by executive management no less frequently than annually, as well as any additional threshold expenditure amounts per item, activity, or event, or a threshold expenditure amount per employee receiving the item or participating in the activity or event under this policy. Such approvals must be reported to the ERM Committee (which may be in an appropriate summary form) no less frequently than annually.
Exceptions and Violations
Any exception or violation of this policy must be promptly reported to WCU's (i) principal executive officer, (ii) officer with primary responsibility for WCU's compliance function, or (iii) officer designated with primary responsibility for overseeing the administration, monitoring, and compliance with this policy. Exceptions and violations must be reported to the ERM no less frequently than annually, or more frequently as the nature and severity of violation may warrant. All employees, officers, and directors of WCU must adhere to this policy and will be held accountable for compliance. Any employee or officer that is aware of any circumstance that may indicate a violation of this policy is require to report such circumstance to their supervisor or WCU's principal compliance officer or compliance group. WCU prohibits retaliation against any employee or officer for making a good faith report of actual or suspected violations of WCU's code of conduct, laws, regulations, or other WCU policies, including this policy. A finding of retaliation against any such employee or officer may result in disciplinary action up to and including termination. failure to promptly report known violations by others may also be deemed a violation of WCU's code of conduct.
On an annual basis, the ECIP recipient will deliver to the Department of the Treasury a certification, executed by two senior executive officers (one of which must be either the ECIP recipient's principal executive officer or principal financial officer) certifying that (i) WCU is in compliance with this policy and (ii) the approval of any expenditure requiring the prior approval of any senior executive officer, any executive officer of a substantially similar level of responsibility, or the board of directors (or a committee of such board), was properly obtained with respect to each such expenditure.