Travel and Business Expense Reimbursements

Travel and Business Expense Reimbursements ACCOUNTS PAYABLE GENERAL POLICIES and PROCEDURES

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 • Compliance is everyone’s 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

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

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 University’s 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 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.

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 items • 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 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)

Compliance with Federal Regulations “Unallowables” or “Segregated” expenses • NO government funds are to be used to pay for “Unallowables”or “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 Carrier • http://www.columbia.edu/cu/opg/policies/usflag.pdf

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) • 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.

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).

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

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

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 attendees • 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 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

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)

•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 Expense Policy: Non-Reimbursable Expenses

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 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.

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.

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 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

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 employee’s 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 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 employee’s 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

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 include: • The date • The items purchased • The total amount of the purchase • Proof of payment • For gifts: the recipient’s name, home address and Social Security number (if taxable) The approved purpose of the entertainment event or gift must be clearly documented.

Travel and Business Expense Reimbursements