Travel and Business Expense Reimbursements

1
Travel and Business Expense Reimbursements

• ACCOUNTS PAYABLE
• GENERAL POLICIES and PROCEDURES

2
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

3
Compliance

• 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

4
Compliance

• 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

5
Reimbursement Submission Time Limit

• Employees should submit within 10 days of a trip
  (for travel) or bi-monthly/monthly (for business
  expenses)
• 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.

6
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
  expenses
• 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.

7
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

8
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
  items
• Total amount

9
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!!
10
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
  employee.
• Personal benefit additional compensation, so
  the IRS gets their share
• This is why many expenses are non-reimbursable
  (suntan lotion, late fees, gym fees)

11
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

12
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
  Carrier
• http//www.columbia.edu/cu/opg/policies/usflag.pdf
  

13
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)

14
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.

15
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

16
Travel Expense Policy

• Travel by Air, Rail, Bus
• Should be purchased at the lowest available
  commercial/economy rate (typically 14 days before
  travel)
• 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
  carrier
• Documentation
• Tickets, e-tickets, itineraries, web
  confirmations should show dates, price, to/from
  info and class.

17
Travel Business Expense Policy Ground
Transportation

• 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).

18
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
  reimbursable
• Documentation
• Traveler should keep record of miles traveled
  (odometer reading or map quest). This does not
  need to be submitted to AP

19
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
  expenses
• Token gift for stay in private residence (should
  be 100 or less) and long-term rental
  accommodations requires Supplemental Approval

20
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

21
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
  attendees
• This covers
• Individual meals during travel
• Meals involving only CU personnel
• Meals among peers for research collaboration or
  administrative meetings

22
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
  tax.
• 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

23
Travel Expense Policy Miscellaneous Reimbursable
Expenses

• Baggage handling
• Storage expenses
• Business office expenses
• Business-related calls and faxes
• Up to 3 personal calls per day of reasonable
  duration
• Currency conversion fees
• Gratuities to porters, bellhops and other service
  personnel
• 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)

24
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
  

25
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

26
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
  possible
• 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.

27
Employee Entertainment Expenses

• The University strongly suggests that employees
  first consider funding these with their own
  contributions.
• However, Departments may choose to celebrate
  personal occasions as an expression of employee
  appreciation.
• 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.

28
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

29
Employee Entertainment Expenses Reimbursable
Non-Reimbursable Personal Occasions for Employee
Appreciation

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

30
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.

31
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
  celebration)
• 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
  contributions.
• 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

32
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.

33
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.

34
Entertainment Gifts Documentation Required

• The original receipts/invoices for gifts must
  include
• 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.