Business And Travel Expense Policy Overview

OCTOBER 2018Business and Travel Expense Policy Overview1

Presentation OverviewThis presentation provides an overview of the Business and Travel Expense (BTE)policy, which originally went live on March 14, 2011. The updated BTE Policy went liveon October 1, 2018.AudienceAny person that may incur expenses in the course of conducting university business,supervises employees that may incur business expenses or who supports someonethat may incur business expenses should be familiar with this policy.Business and Travel Expense Policy: usiness-travel-expense.html2

Content3 Policy Introduction Reporting and Documentation Roles and Responsibilities Policy Overview Business and Travel Expenses Business Meals and Entertainment Other Business Expenses

BUSINESS AND TRAVEL EXPENSE POLICYPolicy Introduction4

Policy Purpose Provides university stakeholders with specific policies and proceduresregarding university business and travel expenses, regardless ofpayment method and type of funds used. Specifies reimbursement or other expense allowance arrangementsthat meet the requirements of the Internal Revenue Service (IRS)accountable plan rules for expense reporting and reimbursement.PolicyIntroduction5

Policy StatementPolicyIntroduction6Addresses business and travel expenses for university employees and nonemployees that are: Directly paid with university funds (e.g., discretionary accounts, federallyand non-federally funded external sponsorships and programs,purchasing card) Reimbursed by the university to individuals who incurred them foruniversity business

AudiencePolicyIntroduction7Employees who incur expenses and/or supervises employees incurringexpenses on the university’s behalfEmployees who make travel and other arrangements, prepare expensetransactions or approve expenses for: University employees Prospective university employees Visitors Students who travel on approved university business, universitysponsored conferences, seminars, or events Non-employees who travel or incur expenses relating to universitybusiness for which the university has agreed to pay

BUSINESS AND TRAVEL EXPENSE POLICYReporting and Documentation8

Reporting RequirementsProper justification to establish a valid university business purposeReporting andDocumentationSubstantiation of the business or travel expense with required originalreceipts for expenses 75 or moreReturn of excess reimbursement or allowance within a reasonable timeperiodIdentification and separation of expenses for alcohol purchases9

Reporting RequirementsReporting andDocumentation10 Requests for reimbursement of expenses submitted within 30 days. Requests for reimbursement of expenses must be submitted andapproved within 90 days after completing the travel or incurring therelevant expense. Expenses submitted more than 90 days after completing the travel orincurring the expenses will typically be taxable to the individual incurringthe expense.

Documentation RequirementsReporting andDocumentation11Obtain Receipt orDocumentationDocument aMissing ReceiptRetain OriginalDocumentationOriginal documentationrequired for singleexpendituresof 75 and greater.Complete the MissingReceipt Form and scan andattach the form in place ofthe receipt.Maintain originaldocumentation inaccordance with FinancialRecords Retention Policy.

BUSINESS AND TRAVEL EXPENSE POLICYRoles and Responsibilities12

Roles and ResponsibilitiesRoles andResponsibilities13Expense IncurrerExpense PreparerExpense ApproverIncurs the travel and/orbusiness expense andrequests reimbursementPrepares the businessor travel expensetransaction andsubmits the expense tothe appropriateapproverApproves the businessor travel expensetransaction

Expense IncurrerResponsible for:Roles andResponsibilitiesEnsuring the expense has a valid business purposeObtaining and providing business justification and supporting documentation to the expense preparerPreparing and submitting expense reports in a timely mannerObtaining and providing required approval for upgrades and exceptions to the expense preparerProviding a valid Oracle account number(s) to allocate the expenseEnsuring the expense complies with: Business and Travel Expense Policy Relevant documents associated with the BTE Policy Sponsor requirements and/or federal regulations (if applicable) Departmental guidelinesExpenses should be submitted for reimbursement within 30 days of completing the travel or incurring therelevant expense, but must be submitted and approved within 90 days to not be taxable.14

Expense PreparerResponsible for ensuring:Roles andResponsibilitiesExpense report accurately reflects trip and expense details as reported by the requestorProper business justification and supporting documentation are received from theindividual requesting reimbursement or incurring the business or travel expenseMileage and per diem calculations are accurateRequired approval for upgrades and exceptions is obtained and submitted by the individualrequesting reimbursement or incurring the business expenseExpense is properly allocated to the correct Oracle account number(s)The individual who incurred the business expense may delegate responsibility for preparation ofthe expense transaction but retains responsibility for the validity and accuracy of the expense.15

Expense ApproverResponsible for ensuring:Roles andResponsibilitiesExpense has a valid university business purposeThere is proper supporting documentation for the business expenseMileage and per diem calculations are accurateRequired approvals for upgrades and exceptions are obtainedExpense is properly allocated to the correct account number(s) and funds are available for theexpenseExpense complies with: Business and Travel Expense Policy Relevant documents associated with the BTE Policy Sponsor requirements and/or federal regulations (if applicable) Departmental guidelinesHe/she is the appropriate approver for the requesting individual, budget, and expense16

Designated Departmental Finance Representative (DDFR)Roles andResponsibilities May approve permitted exceptions to the policy Must be designated by department, college, and/or division May escalate exceptions to the president, provost, department dean, orvice president Exceptions to this Policy should be documented and submitted in theappropriate manner given the purchase methodFinance Division maintains a DDFR Listing atwww.cmu.edu/finance/controller/bte/files/ddfr listing.pdf17

BUSINESS AND TRAVEL EXPENSE POLICYOverview: Business and Travel Expense Policy18

General Guidelines Expenses incurred for university business that comply with the policy andrelevant sponsor requirements, federal regulations, other relevantdocuments, and any departmental guidelines may be paid and/orreimbursed under the BTE Policy. Business and travel expenses should be kept to a minimum. Departments govern how authorization for business and travel expensesis granted and may impose additional restrictions beyond those requiredby the BTE Policy.Overview:Business andTravel ExpensePolicy19

General Guidelines Overview:Business andTravel ExpensePolicyExpenses reimbursed following IRS accountable plan rules are notincluded in individual’s income for U.S. federal personal income tax orsubject to employment taxes. Employees and other individuals incurring expenses for universitybusiness at a university non-U.S. branches or locations may havedifferent personal income tax consequences. Employees and other individuals incurring expenses for universitybusiness at a university U.S. branches or locations may have different orvarying state and/or local personal income tax consequences.20

General Guidelines Approved reimbursements for expenses of companions/spouses or nonemployees who accompany faculty or other employees on universitybusiness may be included in the income of the recipient for U.S. Federalincome tax purposes or subject to required withholdings andemployment taxes, except when the there is a bona fide businesspurpose and the individual substantiates the expense. Approved business relocation/moving costs are included in the income ofthe recipient for U.S. federal income tax purposes and subject toemployment taxes. Approved expenses that do not comply with the BTE Policy, sponsorrequirements, federal regulations, relevant documents and/ordepartment guidelines are taxable to the recipient.Overview:Business andTravel ExpensePolicy21

Reimbursable, Allowable and UnallowableOverview:Business andTravel ExpensePolicyExpense 22Expenses that are reimbursableper the BTE Policy may beunallowable for federal, state, orother sponsored reimbursement,either directly or indirectlyDirect questions to thedepartment’s business manager,DDFR, and/or Sponsored ProjectsAccounting in advance of incurringthe expenseUniversity PolicyFederal, state, or other sponsoredreimbursement (direct or indirect)

Not Reimbursable Overview:Business andTravel ExpensePolicy Expenses that do not have a valid universitybusiness purpose that supports theuniversity’s missionPersonal expenses and incremental travelexpenses incurred for personal businessduring a university business tripExpenses of companions/spouses or nonemployees who accompany faculty or otheremployees on university business, except inlimited circumstances when authorized inadvance by the president, the provost, thedepartment’s dean, or the relevant vicepresidentExpenses reimbursed from third-partysources 23Personal automobile expenses Loss or damage to a personal automobile andrelated costs Roadside protection coverage Personal accident and personal effectsinsurance coverages Parking tickets Costs associated with towing and impoundfees for parking violations Purchases made with frequent flyer miles orrewards programs Other than costs for purchasing insurance,costs related to injury, loss or damage causedby or to a rental car

Sales Tax Exemption CMU is sales tax exempt on most purchases in PA and some other stateswhen the business purchase is made directly with university funds usingOverview:Business andTravel ExpensePolicya university purchasing method and the university’s sales tax exemptionnumber or certificate is provided to the vendor at the time of purchase. Sales tax incurred for purchases made with personal funds for universitybusiness travel or for university business meals will be reimbursed.More information: www.cmu.edu/finance/taxation/sales-tax24

BUSINESS AND TRAVEL EXPENSE POLICYBusiness and Travel Expenses25

Arranging Travel Use preferred suppliers to arrange and pay for university travel.BusinessTravelExpenses Must use personal funds if not utilizing a preferred travel agency. Reimbursement for travel purchases made with personal funds made onlyafter proof of payment is submitted with the expense report.View preferred supplier-directoryAdditional information on preferred travel agencies, car rentals, hotels andparking: www.cmu.edu/finance/procurementservices/travel26

Goods and Services Purchases of goods in excess of the micro-purchase threshold of 3,000and/or all services, regardless of dollar amount, should be reviewed withProcurement Services prior to purchase with personal funds. Per the university Purchasing Policy:BusinessTravelExpensesWhile not recommended, use of personal funds is allowed for thepurchase of goods only when logistical or extenuating circumstancesoccur that preclude use of a PO or PCard. Due to compliance concerns,the purchase of goods in excess of the micro-purchase threshold of 3,000 with personal funds are prohibited. Professional services may notbe procured with personal funds.27