Frequently Asked Questions

1. Can your entity have an employee-recognition program? Yes, with some restrictions. (Minn. Stat. § 365.10, Subd. 12 and § 471.895)

  • Electors must approve of the program
  • Follow the Gift Law:
    • No monetary awards (including cash substitutes such as gift cards)
    • Non-monetary gifts should be utilized. The following are appropriate gifts:
      • Trinkets or mementos should cost $5 or less
      • Refreshments costing $3 or less
      • Plaque or similar memento to recognize individual services
  • Banquets or parties hosted by the program should be open to only the employees that are members of the program
  • The program should only pay for the participation of members at the banquets and parties (spouses and other third parties should pay for their own meals and entertainment fees)
  • The program should not spend monies on the purchase of alcoholic beverages

2. Can your entity hold a retirement party for a retiring employee? Yes, with elector approval (Minn. Stat. § 365.10)

3. Can your entity give employees a surprise bonus at the end of the year? No. A bonus is a form of compensation and therefore violates the Gift Law

4. Can your entity buy flowers for an employee who is in the hospital? Yes, BUT not with public funds. Employees or elected officials can pool their own personal money to buy the flowers if they wish. Reasoning: flowers would benefit individual, not the public.

5. As a recognition gift, can your entity give gift cards to those selected employees? Gift cards are too comparable to cash and other forms of compensation and therefore violate the Gift Law.

6. Can management ask partner organizations to donate to your entity for a specific purpose? Yes. Parent teacher organizations and similar non-profit charitable organizations are created independent of the entity. Therefore they are able to make donations to the entity.

  • Be aware of potential conflicts of interests that may arise if there are members of the school board who are also members of the donating organization

Donations received from these organizations must be accepted by resolution with 2/3 majority, stating any restrictions applicable to the donation (Minn. Stat. § 465.03)

  • A policy should be in place to establish guidelines for donation acceptance.

For more information, contact one of our Governmental Audit experts.