Mastering Reimbursements: Travel, Business Meals & Entertainment

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Finance Fundamentals III:
Mastering Reimbursements: Travel, Business
Meals & Entertainment
Housekeeping
2

Subject Matter Experts

Sign-in sheet

Timing

Slides & Materials

Parking Lot

Feedback

Facilities

And…
An oh so gentle reminder…
3
Baseline Quiz
4
When a traveler uses a personal
car, which is not reimbursable?
25%
5
25%
in
g
Pa
rk
ag
e
M
Ga
s
D.
i le
C.
lls
B.
25%
Gas
Tolls
Mileage
Parking
To
A.
25%
What ground transportation to or
from the airport is not allowable?
6
su
ch
da
n
as
se
th
e
rv
i
.. .
ce
s
ns
it,
tra
ic
Pu
bl
Ai
rp
o
rt
s
hu
ttl
e
se
r
D.
Se
C.
vic
e
B.
Taxis
Airport shuttle
services
Sedan service
Public transit,
such as the “T”
Ta
A.
xis
25% 25% 25% 25%
Travelers reimbursed at the lodging
per diem rate must provide:
De
s
7
ov
e
33%
...
ft
he
ab
lc
cr
ip
t io
n
Pr
oo
fo
ft
of
sp
ec
ia
ra
ve
l
C.
lo
B.
Proof of travel
Description of
special
circumstances
All of the above
33%
Al
A.
33%
If traveling domestically on federal
funds, travelers should choose:
8
es
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ha
tp
ro
rt
ar
r ie
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e
it h
Th
Th
ec
f la
ar
r ie
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rr
eg
ar
dl
e
i. .
.
va
ea
in
U.
S.
Th
ec
D.
A
C.
st
air
l
B.
The cheapest airline
available
A U.S. flag carrier
regardless of price,
where available
The carrier with the
best safety record
The carrier that
provides non-stop
service
he
ap
e
A.
..
25% 25% 25% 25%
What is the maximum allowable
cost in FAS for business dinners?
9
no
is
er
e
Th
...
al
m
ax
im
um
n.
..
in
c lu
di
er
so
n
ng
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pe
rp
rp
er
so
n
ex
c lu
di
ex
c lu
di
pe
$1
00
$5
0
pe
D.
$7
5
C.
er
so
n
B.
$50 per person
excluding alcohol, tax,
and tip
$75 per person
excluding tax and tip
$100 per person
including tax and tip
There is no maximum
allowable expense
rp
A.
ng
...
25% 25% 25% 25%
To document a business meal
attended by multiple people include:
10
33%
m
ea
l
33%
ed
Th
us
in
es
s
at
e
re
as
of
on
th
e
fo
r.
..
af
fil
...
eb
Th
Th
en
am
es
D.
s/
C.
t it
le
B.
The names and
titles/affiliations of the
attendees or readily
identifiable groups
The business reason for
the meal
The date of the meal
All of the above
an
d
A.
33%
Understanding the Policies
Harvard’s Travel and Business Expense Policies:

These together provide reimbursement to
employees and approved non-employees for
necessary and reasonable travel, entertainment, and
non-travel business expenses incurred while
conducting authorized University business

They ensure that sound business practices are
followed and that the reporting of travel,
entertainment, and non-travel business expenses is
in compliance with external and internal regulations
http://policies.fad.harvard.edu/pages/travel-0

11
Regulations and Policies
Spending and reimbursement policies are
determined by the following:

12
External Regulations – IRS Tax Regulations and Office
of Management and Budget Federal Cost Regulations
(Circular A-21)

University Policies

Sponsor/Donor Terms

FAS Policies
University’s Accountable Plan
The University must comply with IRS “accountable plan” rules
under which travel advances and reimbursements must meet
following three requirements:
1. Valid business connection or purpose—expenses must
directly benefit University
2. Adequate substantiation—a statement submitted within a
reasonable period of time that appropriately documents amount,
time, use, and business purpose
Any expenses that fail to meet all three must be
treated as income.
13
University Business Expense Policy
14

Promotes consistency to ensure that employees are
treated equitably and reduces business risk through
compliance.

Ensures that external compliance requirements are
satisfied and promotes good business practice.

University will reimburse or directly pay properly
substantiated business expenses submitted within 90
days of incurring the charge.

Exceptions to policy require approval in writing from FAS
Associate Dean for Finance or proxy.
Airfare Restrictions for Federal Awards



15
Use of preferred travel agency strongly
recommended (check travel.harvard.edu for list)
Domestic air travel:
– U.S. Flag Carriers only
– Economy/coach-class ticket
International air travel:
– U.S. Flag Carriers when departing from U.S. and
where available while abroad, unless other
circumstances described on Federal Awards
Travel Reimbursement Exception Form (FATREF)
apply
University Policy Restrictions

Repetitive Food and Travel

Spousal/Family Meals and Travel

Use of Private Residences
- Cannot claim lodging per diem
- May extend appreciation to family or friends:
~ Purchase up to $75 gift per stay

16
Sedan Service
What are the FAS Meal Guidelines?
A.
Breakfast - $25
Lunch - $50
Dinner - $100
33%
33%
33%
(per person including tax and tip)
B.
Breakfast - $20
Lunch - $45
Dinner - $100
17
h.
.
Lu
nc
kf
as
t-
$2
5
Lu
nc
ea
Br
Br
ea
kf
as
t-
$2
0
Lu
nc
$2
5
tkf
as
Br
(per person including tax and tip)
h.
.
Breakfast - $25
Lunch - $50
Dinner - $125
ea
C.
h.
.
(per person including tax and tip)
FAS-Specific Guidelines

FAS Meal Guidelines:
–
–
–
–

Breakfast - $20 per person, including tax & tip
Lunch - $45 per person, including tax & tip
Dinner - $100 per person, including tax & tip
The University does not reimburse for meal expenses for one day
travel of twelve hours or less
Telecommunications Payment Request Form
(Internet service provider, data plans, business calls on a cellphone)
- Submit with every reimbursement request
- Equipment would rarely be 100% business
18
What Are Dept. Responsibilities?





Communicate policies and procedures to everyone
Assign hierarchy of responsibility for preparation and
approval of reimbursement requests
Decide whether to impose greater control than
University/FAS requires
Train necessary staff in reimbursement policies
Determine appropriateness of expense
–
–
–
–
19
Does University allow reimbursement for such an expense?
Does expense primarily benefit University?
Does it conform to policies of University, FAS, and funding
agency?
Does it meet criteria set out in terms and restrictions of
account being charged?
5 W’s: Business Purpose
Detailed business purpose is required by
IRS accountable plan:
–
–
–
–
–
20
WHO
WHAT
WHEN
WHERE
WHY
5 W’s: Who
●
Who: includes the name of individual
who incurred the expense
Others if more than one individual was
involved
● List title and affiliation for Non-Harvard
individuals – up to 5 people. Otherwise
include an identifiable group
●
21
5 W’s: What & When
●
What: includes a description of event,
activity, or purchase
●
●

22
Example: “Trip to Spider Monkey
Conference” vs. “Trip to conference”
Make sure to be very specific about which
Grant the “What” applies to
When: includes beginning and end dates
of trip or date item was purchased
5 W’s: Where & Why
●
Where: includes exact location of trip
●
●
23
for trips with multiple locations, list them all
Why: provides reason expense was
incurred and how it relates to the fund
being charged
What is a Per Diem?

Per diem is a daily rate assigned by federal
government to a location for
reimbursement of lodging, as well as meal
and incidental expenses (M&IE)

Rates are on the Travel Services Website:
http://www.travel.harvard.edu/cgi-bin/travel/index.php
(Effective date for per diem should agree with
dates of travel)
24
When to use a Per Diem


25
Reimbursement for travel may be based on per diems
- Per diems are paid in lieu of actual expenses
- Receipts are not required; proof of travel is required
- Advance per diems are not allowed
Lodging Per Diems
- Acceptable only under special circumstances and
rarely for domestic travel
- Amount cannot exceed published Federal Per Diem
Rate
- Proof of travel required
Claiming Per Diems
26

You cannot mix receipts and per diems (within
the same category) in the same trip

The traveler must choose to either submit
receipts or claim a per diem

Proof of travel must be supplied with the
reimbursement documentation
Prorating Per Diems
27
...
av
e
en
ou
gh
st
la
fir
st
an
d
on
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ed
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st
t
W
Al
l5
sin
ce
th
at
’s
w
D.
t. .
C.
e
B.
All 5 since that’s where the
trip originated
Just the first and last
None
We don’t have enough
information to know
he
r
A.
No
ne
A professor is back from a multi-city trip and is asking for meal per
diem instead of actual cost. He flew into and out of New York City
with the remainder of the trip spent in Chicago. He has the NYC per
diem rate for the full 5 days of his trip. How many days should
25% 25% 25% 25%
actually receive the NYC per diem rate?
Prorating Per Diems
IRS regulations require prorating of meal per
diems under certain circumstances:
28
●
For trips lasting more than 12 hours but less
than 24 hours, use 75% of M&IE per diem rate
●
For trips lasting more than 24 hours, use 75%
of M&IE rate for first and last days of trip
●
For multiple-city trip, base meal per diems on
flight times and lodging where traveler slept
Documentation Requirements

All travel and purchases must be
–
–

29
Business expenses primarily benefiting University
Properly documented
 Thorough business purpose required on either Travel Expense
Report (WV) or Employee Reimbursement Form
 Proper substantiation of amount by providing receipts or a Missing
Receipt Affidavit
 Signed by reimbursee – not optional
 Signed by approver – not optional
Reimbursement requests must be submitted within
the appropriate timeframe.
Timeframe for Submission
30
sw
ye
ar
fro
m
ith
an
th
e
a.
..
da
..
s
da
y
90
a
to
Up
Ov
er
90
D.
da
y
C.
da
y
B.
60 days
90 days
Over 90 days with an
approved exception
request
Up to a year from the
date of purchase
60
A.
s
A professor has purchased some books for research. She
wants to pay for them using her TAD fund. How long of a
period does she have to submit her receipts for
reimbursement?
25% 25% 25% 25%
Timeframe for Submission
To satisfy IRS accountable plan, travel
expense reports must arrive at the Travel
Office within:
–
–
31
90 days from end date of trip or, for non-travel
related expenses, date on which expense was
incurred
However it should be noted that best practice is to
get receipts and reimbursement requests in as
soon as possible
Timeframe for Submission

Reimbursements become taxable
–

No payment allowed
–
32
91 to 182 days after end date of the trip/date on
which expense was incurred or if the Exception
Request is denied
183 days after end date of trip or date expense
was incurred
Exemption from Timeframe

Extended Business Trips
“Trip taken by a full-time employee that is in excess
of 30 consecutive days but less than one year”
33
Who Is Subject to Timeframe?
34
ov
e
B
ab
ft
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lo
Al
A
an
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.
On
ly
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rs
,T
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..
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.
vi
to
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,
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ur
e
r,
ni
o
se
Fa
c
ul
ty
(ju
E.
ep
D.
r,
C.
ni
o
B.
Faculty (junior, senior,
visiting) and staff (full
and part-time)
Preceptors, lecturers,
TA’s, and Fellows (postdocs and research)
Teaching Fellows and
Research Assistants
Only A and B
All of the above
Pr
ec
A.
20% 20% 20% 20% 20%
Who Is Not Subject to Timeframe?
35
en
di
ar
y
ap
St
ip
Jo
b
po
st
-d
oc
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On
ly
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.
Re
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ac
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gF
el
E.
nd
D.
sa
C.
w
B.
Teaching Fellows
and Research
Assistants
Job applicants
Stipendiary postdocs
Only A and C
All of the above
lo
A.
an
ts
20% 20% 20% 20% 20%
What Receipts Are Needed?

Original receipts for all expenses of $75 or
more

All hotel receipts (hotel folios)

Electronic receipt requirements
–
36
Must be a receipt, not a confirmation
What If No Receipts Are Available?




37
If an original receipt is lost or misplaced, use a
Missing Receipt Affidavit (MRA)
For air travel or hotel stays, additional
documentation is required
One MRA can support multiple expenses
Both reimbursee and approver must sign MRA
How to Request an Exception
Exception approval allows for processing of
expenses as a non-taxable reimbursement
through Travel Office
To request policy exceptions:
– Complete Exception Request Form
– Department administrator or financial officer
submits completed form to
[email protected]
– Lost or misplaced receipts are not
“extenuating circumstances”
38
Why Are Reimbursements Returned?
Expense is unallowable under University policy
 Expense exceeds 90-day limit and does not have
approval from FAS Office of Finance
 Expense doesn’t comply with “Fly America Act” (see
OSP policies regarding travel on federally sponsored
funds)
 Expense is actually a third-party payment
 Incorrect per diem rate is used
 Not approved by approver in the system
 NOTE: when returned, it will have a “green sheet”
attached. Keep this and return with resubmission

39
Resources
FAS Office of Finance: www.finance.fas.harvard.edu
Administrative Systems Assistance Program (ASAP):
[email protected]; (617) 496-7136
Travel and Reimbursement Office:
www.travel.harvard.edu
- Listing of Harvard negotiated rates
- Mileage, exchange, and per diem rates
- Travel agency partners, etc.
40
Other Resources
For Sponsored Research:
FAS Office of Research Administration Services:
www.fas.harvard.edu/~research
For General Travel, Reimbursement, or Exception
Questions:
Josh Dunn, Procurement Administrator,
[email protected]; (617) 495-7652
41
Reimbursement and Card Services, (617) 495-7760
http://oc.finance.harvard.edu/services/reimbursement-andcard-services
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