New Cell Phone Policy



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The Problem with State Owned Cell Phones

State law prohibits the use of State owned property for personal purposes. Personal use of a State owned cell phone must be reimbursed by the employee. Given the multiplicity of plans, the calculation of the amount to be reimbursed is confusing, inconsistent, inaccurate, time consuming and rarely done correctly, if at all. Nonetheless, not reimbursing the State is illegal and is an easy target of legislators and news reporters seeking to show malfeasance on the part of State employees. Un-reimbursed cost for personal use also constitutes a taxable benefit to the employee making UT liable for additional taxes. Several years ago, Financial Services calculated our exposure at $80,000 - $100,000 per year for all years for which we were assessed back taxes. The number of cell phones has grown since that time. UTHSC-H could face substantial liability as a result of a federal audit.

Billing statements for State paid cellular phone service and State reimbursed personal service are open records. Anyone who takes the time to make the request can obtain detailed call records. That is generally not the kind of information that employees would like made public!

We know that employees who use UT-H cell phones do not regularly reimburse UT-H for personal use. The old procedure was probably the simplest acceptable calculation although it was both cumbersome and inaccurate. Making it more accurate would make it even more cumbersome and making it less cumbersome would make it even less accurate.

The Solution to the Problem

Cellular phones have become a necessity in the life of most professionals. Many, if not most, employees who need a cell phone for work already have one for personal use. By supplementing the employee's income for required business use of a personal cellular phone, the need for detailing cell phone bills and making reimbursement is eliminated. Furthermore, State property is not being used for personal purposes, open records laws may not apply and the potential tax liability is addressed since the supplement is taxed as regular income.

The obvious downside is that employees use their cell phones varying amounts while the supplement is a fixed amount which is the same for everyone. The university has calculated the monthly average for State paid cellular service at $65. Several providers offer generous plans for similar amounts that should suffice for the business portion of the usage.

The proposal to replace State paid cellular service plans with employee supplements is not universal:

1. There are situations where cellular phone service can be directly paid from university funds:

Cellular phones that are shared among many individuals in a department and have no clear 'owner' can be paid from university funds.

Cellular phones that are affixed to State property (like vehicles) can also be paid from university funds.

Under certain circumstances, university grant and contract funds can be used to pay for cellular service. 2. Employees can still be reimbursed for occasional use of a personal cell phone where a supplement is not being paid.

It is expected that most employees who currently have a State paid cellular phone will be converted to the salary supplement. The other two programs should have limited use.

Cellular supplements, State paid cellular phones and reimbursements are all subject to department head or Principal Investigator (PI) approval.

An Additional Benefit

Currently, departments must enter transactions annually to encumber funds for cellular phone service for the year. These transactions are then reviewed by Telecommunications. Each month the cellular service bills for approximately 400 phones is billed to each account and then mailed to the department. Every user must review their bill for personal calls, calculate the amount owed and reimburse the UT-H. For State paid cell phones replaced with a salary supplement, this process will be replaced by one transaction to initiate the supplement. The time and aggravation saved will be enormous.