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Travel and Business Expense Reimbursements


ACCOUNTS PAYABLE GENERAL POLICIES and PROCEDURES Travel and Business Expense Reimbursements Goal of new policies As policies are: Clear, more comprehensive ... – PowerPoint PPT presentation

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Title: Travel and Business Expense Reimbursements

Travel and Business Expense Reimbursements

Goal of new policies
  • As policies are
  • Clear, more comprehensive
  • Communicated, accessible
  • Expectations are understood
  • Compliance with policy is improved
  • Requests for exception are reduced
  • Reimbursement is faster

  • Compliance is everyones responsibility
  • The importance of compliance cannot be overstated
    and remains of the highest importance to the
    University. Consequences of non-compliance
  • Decrease in federal funding, donations
  • Fines penalties
  • Loss of tax-exempt status
  • Damage to reputation

  • Foundation of policy
  • IRS Regulations
  • Reimbursement submission time limit
  • Receipts/Proof of payment
  • Business purpose
  • Federal Regulations
  • Segregation of unallowable expenses
  • Fly America Act (travel on grants)
  • Expectations of a 501(c)3 organization

Reimbursement Submission Time Limit
  • Employees should submit within 10 days of a trip
    (for travel) or bi-monthly/monthly (for business
  • Employees must submit requests for reimbursement
    to their department within 120 days from the date
    the expenses were incurred, or the end of the
    Universitys fiscal year on June 30th, depending
    on which comes first.

Reimbursement Submission Time Limit
  • Failure to submit within 120 days or at the
    fiscal year-end requires Supplemental Approval.
    Facts and circumstances of the late
  • submission must be documented to determine if
    it is taxable.
  • Legitimate circumstances (not taxable)
  • Prolonged travel with no mechanism to submit
  • Medical issues or leaves
  • Circumstances that are not legitimate (taxable
    beyond 120 days)
  • Being busy
  • Not having administrative support to prepare TBER
  • Not knowing the policy
  • If the expenses are not submitted
  • within one year, they are always taxable.

Documentation Receipts
  • Original receipts, invoices, web confirmations,
    payment documentation should be submitted to the
    department for all expenses
  • Lost receipts must be documented and require
    Supplemental Approval for
  • Expenses over 75
  • Meals costing over 25
  • Lodging costing any amount

Documentation Receipts
  • Receipts may take many forms
  • Cash register receipt
  • Order form
  • Web receipt
  • Detailed receipts must identify
  • Date of purchase
  • Vendor name
  • Itemized list and unit price of the purchased
  • Total amount

Business Purpose
  • Written explanation of valid business purpose
    must be documented
  • Where appropriate, conference agenda, flyer,
    registration form, or schedule of events should
    be provided.
  • Business purpose must be specific Travel to
    Boston to speak at Accounts Payable Network
    conference is an appropriately documented
    business purpose. Boston conference is not.

Business purpose may be obvious to traveler but
not to a third-party!!
Compliance with IRS Regulations
  • Business vs. Personal Benefit
  • Policy is crafted to avoid personal benefit and
    should be considered when spending outside of
    policy or approving exception requests
  • Reimbursements made by the University must have a
    clear business purpose related to mission and
    substantial business benefit
  • If the expense has primarily personal benefit, it
    should not be reimbursed
  • If a rare circumstance exists that the University
    has decided to reimburse, it is taxable to the
  • Personal benefit additional compensation, so
    the IRS gets their share
  • This is why many expenses are non-reimbursable
    (suntan lotion, late fees, gym fees)

Compliance with Federal Regulations
  • Unallowables or Segregated expenses
  • NO government funds are to be used to pay for
    Unallowablesor Segregated expenses, that is,
    expenses characterized by the Federal Government
    as frivolous
  • Costs not clearly related to University business
    (e.g. alcohol, flowers, chocolate, entertainment)
  • Excess expenses over policy thresholds

Compliance with Federal Regulations
  • Fly America Act
  • Travelers on federal grants must comply with US
    Flag Carrier Rule
  • With limited exceptions, travel must occur on US
    air carriers
  • Be careful of code sharing, rules are
    restrictive and require issuance through US
  • http//

Expectations of a 501(c)3 Organization
  • The University is supported by
  • IRS taxpaying public (tax exemption)
  • Donors
  • Students
  • Granting Agencies
  • We must be careful stewards of these funds!
  • (Remember the front-page test)

Compliance Reminder
  • Be mindful of departmental budgetary constraints
    and restrictions on federal funds
  • More restrictive policies mandated by
  • Specific programs or grants
  • Departments or schools
  • will take precedence over University policies.

Exception Requests to AP
  • All policy exceptions not listed as eligible for
    Supplemental Approval, or any requests for
    exception of amounts that exceed the thresholds
    allowable for Supplemental Approval, still
    require a formal written exception request
    approved by a Senior Departmental Officer for
    documentation and evaluation of approval by AP.
  • Travelers should understand this is a request,
    not a guarantee
  • For guidance, contact Accounts Payable prior to
    expenditure (where possible) or prior to
    submission or reimbursement request .
  • For example
  • Meals in excess of 50 of policy guideline.
  • Helicopter service

Travel Expense Policy
  • Travel by Air, Rail, Bus
  • Should be purchased at the lowest available
    commercial/economy rate (typically 14 days before
  • Travel on U.S. air carrier is preferred, but not
    required for non-government grants only
  • For travel by air on government grants, there are
    exceptions, but should generally be on US air
  • Documentation
  • Tickets, e-tickets, itineraries, web
    confirmations should show dates, price, to/from
    info and class.

Travel Business Expense Policy Ground
  • Taxis, private car services, shuttle services
    will be reimbursed
  • Rental cars
  • Compact or mid-size car rate
  • If using CU preferred vendor (Hertz) in the US,
    do not purchase the insurance
  • Insurance will be reimbursed for all other
    vendors (when Hertz is not available), or using
    Hertz internationally
  • Documentation
  • Receipts should show dates, price, to/from info
    (and class for rentals).

Travel Business Expense Policy Mileage
  • Set by the IRS currently
  • .505 per mile and includes
  • fuel,
  • maintenance
  • insurance costs
  • In other words, DO NOT request reimbursement for
    gas in addition to mileage.
  • Tolls and reasonable parking charges will be
    reimbursed in addition to mileage
  • Tickets, fines, vehicle repairs are not
  • Documentation
  • Traveler should keep record of miles traveled
    (odometer reading or map quest). This does not
    need to be submitted to AP

Travel Expense Policy Lodging
  • Threshold for reimbursable lodging expense
  • Up to 350 per night for domestic travel
  • Up to 400 per night in international locations
  • Over- limit expenditures of no more than 50
    require Supplemental Approval
  • Anything over 50 requires a formal written
    exception request approved by a Senior
    Departmental Officer for evaluation of approval
    by AP
  • If conference held at hotel where price exceeds
    threshold, provide conference flyer
  • Detailed hotel bill is required for all lodging
  • Token gift for stay in private residence (should
    be 100 or less) and long-term rental
    accommodations requires Supplemental Approval

Travel Business Expense Policy Meals
  • Meals are reimbursed based on actual expenditures
  • Meal thresholds are maximum spending limits, and
    should not be considered per diems
  • Check with your department regarding departmental
    policies or available budget

Travel Expense Policy Business Meals
  • Thresholds for reimbursable meal expenses (not
    including tips or tax)
  • Up to 25 for breakfast,
  • Up to 35 for lunch,
  • Up to 50 for dinner,
  • Over-the-limit expenditures of no more than 50
    requires supplemental approval.
  • Anything over 50 requires a formal written
    exception request approved by a Senior
    Departmental Officer for evaluation of approval
    by AP
  • Original cash register or credit card receipt
    required over 25
  • For groups, document the business purpose, names
    of the attendees (if over 10 people, the number
    of attendees), and the relationship of the
  • This covers
  • Individual meals during travel
  • Meals involving only CU personnel
  • Meals among peers for research collaboration or
    administrative meetings

Travel Expense Policy Business Meals Involving
External Parties
  • Expenses for business meals involving external
    parties (hosted and paid by a University employee
    and attended by business colleagues, donors,
    students, or prospective employees, which result
    in a business benefit to the University) should
    not exceed 100 per person, not including tips or
  • Document the business purpose, names of the
    attendees (if over 10 people, the number of
    attendees), and the relationship of the attendees
  • Over-limit expenditures of no more than 50
    requires Supplemental Approval
  • Anything over 50 requires a formal written
    exception request approved by a Senior
    Departmental Officer for evaluation of approval
    by AP
  • Original cash register or credit card receipt
    required over 25
  • Examples include Fundraising, Recruitment,
    Speaking engagements

Travel Expense Policy Miscellaneous Reimbursable
  • Baggage handling
  • Storage expenses
  • Business office expenses
  • Business-related calls and faxes
  • Up to 3 personal calls per day of reasonable
  • Currency conversion fees
  • Gratuities to porters, bellhops and other service
  • Internet access
  • Laundry or cleaning expenses on trips lasting
    over 5 days
  • ATM fees and traveler check fees
  • Ground transportation
  • Parking and tolls
  • Travel change/cancellation fees (if required for
    business needs)

Travel Expense Policy Non-Reimbursable Expenses
  • Loss or theft of cash advance
  • Loss of airline tickets
  • Loss or theft of personal fund
  • Lost baggage
  • Luggage and briefcases
  • Personal reading materials
  • Medical expenses
  • while traveling
  • Mini-bar alcoholic expenses
  • Movies
  • Personal entertainment
  • Pet care
  • Recreational expenses
  • Saunas, massages
  • Shoe Shines
  • Souvenirs, or personal gifts
  • Airline club membership dues or one-day
    admission fees
  • Air-phone usage
  • Baby-sitting
  • Barbers hairdressers
  • Clothing (purchase or rental)
  • Toiletry items
  • More than 3 personal calls each day, unless
    emergency circumstances are documented
  • Expenses related to vacation taken before,
    during, or after a business trip.
  • Frequent flyer miles
  • Helicopter services for local travel/entertainment

Travel Advances
  • Where required, advances are allowable up to
    500 to cover out of pocket expenses that cannot
    be reasonably charged to a corporate charge card
  • Special circumstances may warrant an advance
    over 500
  • International travel
  • Travel by teams or large groups
  • Travel for recruiting purposes
  • Funds for program or research start-up or
    short-term operations
  • Payments to conference/research participants
  • Budget justification should be provided.
  • Charge to 2380 sub-code

Entertainment Expenses
  • Business entertainment includes events such as
    (theatre, sporting events, recreational outings)
    that are taken with guests, business colleagues,
    donors, students, employees, prospective
    employees and are directly related to a
    University business purpose and conducted for the
    benefit of individuals outside the University.
  • Appropriate University purchasing mechanism
    (p-card, direct billing) should be used when
  • These types of expenses cannot be charged to a
    research grant.
  • Entertainment expenses over 1,000 or expenses
    for business entertainment conducted in private
    homes require Supplemental Approval.

Employee Entertainment Expenses
  • The University strongly suggests that employees
    first consider funding these with their own
  • However, Departments may choose to celebrate
    personal occasions as an expression of employee
  • What to consider
  • Fair consistent application among employees
  • Budgetary constraints
  • The front page test- will it seem appropriate
    to others (e.g., donors, taxpayers) that the
    University pay for this event?
  • Entertainment expenses for employee events over
    500 require Supplemental Approval.

Employee Entertainment Expenses Reimbursable
Business Occasions
  • Dissertation defense
  • Promotion
  • Welcoming a new hire to the University
  • Leaving the University
  • Years of Service/Retirement
  • Graduation of an employee/student
  • Awarding of tenure
  • Publication
  • Event or performance opening
  • Sabbatical
  • Recognition of achievement, departmental goal,
    honor, or thank you

Employee Entertainment Expenses Reimbursable
Non-Reimbursable Personal Occasions for Employee
  • Reimbursable Employee entertainment
  • Departmental celebration of a holiday
  • Collective celebrations of birthdays
  • Congratulations on business related individual
  • Non reimbursable Employee entertainment
  • Showers for birth or adoption of baby
  • Engagements, weddings, anniversaries,
  • Individual birthday celebrations
  • Congratulations on personal related individual

Gifts to Employees
  • Gifts should generally not be given to employees,
    additional compensation is the proper mechanism
  • Token gifts may be given for
  • Exemplary business performance
  • Gifts, prizes, awards of 100 of less
  • Non-cash gifts of 100 or less are reimbursable
    and non-taxable.
  • Cash or cash equivalent (e.g., gift certificates)
    may be given, but is always considered taxable by
    the IRS, and reported on the employees annual
    form W-2.

Gifts to Employees
  • Years of Service/Retirement
  • Gifts, prizes, and awards of 400 or less
  • Non-cash gifts of 400 or less are reimbursable
    and non-taxable.
  • Must be awarded as part of a meaningful
    presentation (presentation, ceremony or
  • Can not be given before the 5th year of service,
    and with at least 5 years in between each length
    of service award
  • Cash or cash equivalent ( e.g., a gift
    certificate) may be given, but is always
    considered taxable by the IRS, and reported on an
    employees annual form W-2.
  • de minimus gifts for occasions
  • The University strongly suggests that employees
    first consider funding these with their own
  • However, if Departments at their own discretion
    may chooses to provide a small gift (e.g., fruit
    baskets, flowers) to an employee or another
    department to recognize a significant occasion

Gifts to Employees Reimbursable Non
Reimbursable De Minimus gifts
  • de minimus gifts for occasions
  • Token non-cash gift (flowers, fruit basket) of
    100 or less
  • Cash or gift certificates are taxable
  • Reimbursable occasions
  • Birth or adoption of a child
  • Funeral, illness or hospitalization
  • Congratulations on a business related achievement
  • Non-reimbursable occasions
  • Engagements, weddings, anniversaries
  • Holidays
  • Individual Birthdays
  • Congratulations on other personal achievements.

Gifts to Non-Employees
  • The fair market value of gifts of cash or
    non-cash items given to non-employees (e.g.
    donors, alumni) should not exceed 600 in a
    calendar year.
  • In rare circumstances where gifts to
    non-employees exceed 600, it becomes taxable
    income to the non-employee and is reported on a
    Form 1099, and Supplemental Approval is needed.
  • Gifts to vendors are not reimbursable.

Entertainment Gifts Documentation Required
  • The original receipts/invoices for gifts must
  • The date
  • The items purchased
  • The total amount of the purchase
  • Proof of payment
  • For gifts the recipients name, home address and
    Social Security number (if taxable)
  • The approved purpose of the entertainment event
    or gift must be clearly documented.