Business & Travel Expense Policy: An Overview

Business & Travel Expense Policy: An Overview
Hello and welcome to an overview of the Business & Travel Expense Policy. This overview is intended to provide information that you may need to know when dealing with University business and travel expenses, but will not cover each and every detail of the policy. We would encourage you to also read and become familiar with the policy document which is available on the Finance website. Business & Travel Expense Policy: An Overview

Agenda General Information Roles and Responsibilities
Business and Travel Expense Policy Overview Purpose and Justification Review Business and Travel Expense Reporting Expense Report Preparation This presentation will begin with some general information and some definitions of common policy terms. Next, we will do an overview of key policy/process changes, define roles and responsibilities, provide a business and travel expense policy overview, and then conclude with some information about the auditing of expense transactions.

Accountable Plan Requirements
There must be a business connection and the expense must be reasonable There must be reasonable accounting for the expenses All excess reimbursements must be repaid in a reasonable time Having an “Accountable Plan” (as defined in IRS Publication 463) allows the University to exclude reimbursements from income for tax purposes provided the university maintains an expense policy under which employees and non-employees must account for all business expenses and travel expenses, advances, and allowances. The specific requirements of an accountable plan include the following: Expenses must have a business connection and must be reasonable, there must be reasonable accounting for expenses and proper documentation, and any expense reimbursements or advances must be repaid in a reasonable amount of time. What does this mean to you? If the requirements of the accountable plan are not met any expense that is reimbursed back to you would be considered taxable income and would need to be detailed out on a tax form when filing your taxes.

Reimbursable/Allowable/Unallowable
Business and Travel Expenses Not reimbursable per university policy Reimbursable per university policy Allowable by Federal Government/Sponsor – direct charge or F&A Unallowable by Federal Gov/Sponsor – direct charge or F&A Repeated throughout the policy is the concept that certain expenses may be unallowable. It is important to separate the idea of unallowable from being not reimbursable. An expense can fall outside of this Business and Travel Expense policy and so therefore not be reimbursable. Then there are expenses that can be reimbursed per the university policy but while they are reimbursable per the policy, they will either be allowable or unallowable to be charged to the federal government or a sponsor either directly or indirectly through F&A. It is critical that expenses that are not allowed to be charged to the federal government or to our sponsors – either directly or indirectly – are accounted for correctly in order to comply with federal regulations and sponsor terms and conditions. The policy identifies the types of expenses that are generally considered to be unallowable and these will be pointed out through this presentation.

Expenses funded by a Sponsored grant or contract
Expenses & Sponsored Grants/Contracts Not all costs that are reimbursable by the university are ‘allowable’ by the Sponsor Expenses funded by a Sponsored grant or contract May have requirements or restrictions above and beyond the university’s policy Need to consult guidelines and/or contract to ensure compliance Expenses that are funded by a sponsored grant or contract may be reimbursable by the university but they may not be considered “allowable” to be charged to the sponsor. Some grants and contracts may have restrictions or requirements that go above and beyond the university expense policy. It is important that the guidelines for the grant and/or the contract is reviewed prior to incurring expenses to ensure that the procedures and restrictions provided by the sponsor are adhered to. Examples of sponsor requirements related to international travel may include prior approval, detailed justifications for each trip, and detailed reports. If you have any questions on how to interpret the sponsor’s requirements or guidelines, you should contact Sponsored Projects Accounting. Questions related to Federal or Sponsor restrictions should be directed to H&SS Department Business Managers

Roles and Responsibilities
This section will provide information on who the expense policy applies to and defines their roles and responsibilities Roles and Responsibilities

Who does this policy apply to?
Faculty Staff Students Visiting Faculty Outside Contractors Recruits Non-Employees (ex. Consultants) Courtesy Appointments The policy is applicable to all who would incur expenses related to doing business with or for the University – from employees to non-employees, students to recruits, visiting faculty to those with courtesy appointments.

Business and Travel Expense Policy Exceptions
Approvers of Exceptions Designated Departmental Finance Representative – H&SS Department Head A Vice President Provost President Designated Departmental Finance Representative In H&SS, the Department Head is responsible for approving policy exceptions Your division has chosen to develop guidelines, processes, and procedures that are specific to H&SS. For example, the processing or approving of policy exceptions is an area that your division has included in its guidelines. You should know that while the expectation is that the policy represents many of the expenses individuals may encounter in conducting university business, it is not reasonable to assume that all circumstances have been anticipated. Therefore, throughout the policy, there has been an attempt to recognize that exceptions to this policy will exist. Per the university’s policy, in order to have an exception granted, there must be approval by the president, the provost, the department’s dean, a vice-president, or a designated departmental finance representative (for H&SS the Department Head) and exceptions should be documented and submitted during the expense approval process.

Defined Roles in Policy
Individual incurring expense Accountable for ensuring that business and travel expenses follow University policy Business Expense Preparer Accountable for confirming that individual’s business and travel expenses follow University policy Business Expense Approver Accountable for approving and verifying that individual’s business and travel expenses follow University policy There are essentially three roles associated with expenses at the University. There are those who incur expenses, those who prepare expense reports or purchasing card verification reports and allocate the expenses to the appropriate account strings, and finally there are those who approve the expenses. Regardless of which role you play, you are accountable for ensuring, confirming, verifying, or approving that the expenses incurred are in accordance with the Business and Travel Expense policy and Sponsor requirements or Federal regulations.

Individual Incurring Expense
Responsible for ensuring that : Expense has a valid business purpose; Proper Oracle account allocation, business justification and supporting documentation (e.g. receipt) has been provided to the business expense preparer; Proper approval for upgrades, exceptions have been obtained and have been provided to the business expense preparer; To the best of their knowledge, the expense is in compliance with the policy and sponsor requirements/federal regulations (if applicable). Each role has specific responsibilities per the Business and Travel Expense policy. For those incurring expenses, the critical responsibility is to ensure that the expense is related to a valid business purpose. Additionally, it is the individual’s responsibility to provide all supporting documentation – including receipts, business justifications, the correct Oracle account strings, and all approval documentation for any expense exceptions – to the person preparing the business expense transaction.

Business Expense Preparer
Responsible for ensuring that : Proper business justification and supporting documentation (e.g. receipt) has been received from the individual requesting reimbursement or incurring the expense; Mileage and per diem calculations are accurate; Proper approval for upgrades, exceptions has been received from the individual requesting reimbursement; There is proper allocation to the Oracle account string. For those who prepare expense transactions, the responsibilities include ensuring that supporting documentation – including receipts, exception approvals, business justifications – have been provided by the individual who incurred the expense. Additionally, the preparer is responsible for the accuracy of the dollar amounts entered or calculated for each expense (for example, mileage and per diem amounts), and for properly allocating each expense to one, or multiple, Oracle account strings.

Business Expense Approver
Responsible for ensuring that : Expense has a valid business purpose; There is proper supporting documentation (e.g. receipt) for the expense; Mileage and per diem calculations are accurate; There is proper department approval for upgrades, exceptions; There is proper allocation of the Oracle string; To the best of their knowledge, the expense is in compliance with the policy and sponsor requirements/federal regulations (if applicable). Finally, the business expense approver is responsible for ensuring that each expense has a valid business purpose and is supported by the proper documentation, that all amounts and calculations are accurate, that departmental approvals have been obtained when necessary, and that the Oracle account allocation is correct. Approving an expense indicates that to the best of their knowledge the expense is in compliance with the policy and Sponsor requirements or Federal regulations.

Business and Travel Expense Policy Overview
At this time, we will review many of the components of the Business and Travel Expense Policy. Please keep in mind that this presentation is meant to serve as an overview and that more details are provided in the actual policy document itself. As we go through the policy elements, you’ll begin to notice that an underlying theme of the revised policy is that the expenses must be compliant with the University’s Accountable Plan. The primary emphasis of the policy is on business and travel reimbursement because this is the focus of an IRS Accountable plan which ensures that organizations reimburse expenses tax free for appropriate business purposes. Additionally though, the expectation is that there is consideration as to the budget available to support the reimbursement of the expenses. Business and Travel Expense Policy Overview

Process Changes Receipt Requirements at H&SS Expense Submission
All receipts are required regardless of amount All paper receipts must be submitted to approver Only receipts $75 and greater should be scanned and submitted with PRC report or ER report Approval/Audits Payables will no longer approve employee expense reports prior to payment Final approval of expense reports will be made by report approver (similar to PCard process) Auditing of expenses will be after reimbursement Expense Submission Expenses should be submitted for reimbursement within 30 days of incurring expense Expenses submitted past 90 days of expense date become taxable income to reimbursee Some of the key changes to the expense policies include the receipt threshold and submission and expense report audits. With the implementation of the new policy, the threshold for a required receipt is raised from $25 to$75 and this applies to purchases made using a university purchasing card as well as expenses that are paid for out-of-pocket. While this is the threshold for the university, at H&SS all receipts related to pcard expenses and business and travel expenses, regardless of dollar amount, should be submitted to PCard verifiers and expense report preparers. Verifiers and approvers should submit all paper receipts to the report approvers but only receipts that are for expenses $75 and greater will need to be scanned and attached to PCard Verification reports and Expense Reports. Another significant change to the process related to expense reimbursement is that the Payables group will no longer approve expense reports prior to payment. Rather, the expense reimbursements will be approved for payment by the departmental approver and the audit of the expenses will be conducted by University Audit based on sampling techniques after reimbursement.

Sales Tax Most CMU goods and services expenses are exempt from sales tax as long as: Purchases are made via Purchase Orders or PCard AND Sales tax exemption certificate/number is provided to vendor Standard Exceptions to Sales Tax Exemption: Hotel occupancy, Allegheny County alcohol tax, non-US locations, some states Sales tax is a topic that is often confusing when dealing with business and travel expenses. It is important to understand that CMU is exempt from most sales tax if the following two conditions are met: (1) a purchase is being made via a University Purchase Order or Purchasing Card AND (2) the sales tax exemption certificate or number is provided to the vendor. The university’s sales tax exemption certificate is now available on the Taxation department’s website to download and print. There are some types of taxes to which CMU’s sales tax exemption does not apply like hotel occupancy taxes, the Allegheny county alcohol tax, etc. You can find more information about the University’s sales tax exemption on the Taxation department’s website.

Paying Sales Tax with Personal Funds
Sales Tax incurred and paid for using personal funds during business travel and meals? Reimbursable Sales tax on other types of business purchases paid for using personal funds? In H&SS, sales tax will be reimbursed, but the employee is strongly encouraged to avoid paying sales tax by making purchases through departmental buyers If you are using your own funds, you cannot use CMU’s sales tax exemption to avoid paying sales tax on a purchase. So, the question becomes, what if you’re purchasing something with personal funds (and therefore can not claim the University sales tax exemption) and you are charged the sales tax? Will you be reimbursed for the sales tax you paid? For certain types of expenses, the answer is ‘Yes’. If you use your personal funds and you incur expenses while traveling for business or for business meals, the University will reimburse you for the sales tax that you may have been charged. For other types of business expenses paid with personal funds (for example, office supplies), in H&SS the sales tax will be reimbursable but you are strongly encouraged to request the department to make purchases on your behalf whenever possible. Please note that claiming CMU’s sales tax exemption when using personal funds is illegal and puts the university at risk for losing the sales tax exemption status.

Meals – Self/Others/Non-Travel
Meals between colleagues Primary purpose must be to conduct University business in accordance with an agenda Functions for special events Intent must be to show appreciation, promote morale, recognize achievements Recruiting /Other Business Meals Primary purpose to conduct business May involve prospective employees, visitors, vendors, organizations, groups, etc. So, what if you incur expenses related to business meals or functions when you’re not traveling? Meals between colleagues are reimbursable as long as the primary purpose of the meal is to conduct university business in accordance with a formal agenda. There should also be a need to meet over a meal – for example, due to conflicting schedules or when one or more employees cannot meet during regular working hours. Also, business meal expenses incurred while attending a local workshop or conference are reimbursable as long as the purpose of the meeting is documented. Occasionally, you may have expenses that are related to a function which is intended to show gratitude or appreciation, promote morale, or recognize achievements of employees. Expenses related to these functions are considered to be business expenses by the university and so they may be reimbursed but they are always unallowable to be charged to Federal funds. Please remember that you must ensure that your expenses comply with your departmental guidelines. Lastly, if you are purchasing meals for non-university personnel due to recruiting employees or students or discussions with vendors or consultants, these expenses are reimbursable if the primary purpose of meeting over a meal is to conduct university business.

Considered to be business entertainment, partially social in nature.
Expenses associated with social events (visitor receptions, alumni reunions, etc.) Considered to be business entertainment, partially social in nature. Necessary to further University interests Expenses should be reasonable Business purpose of entertainment must be clearly documented Requires description of who attended (ex. individual names, name of group) and total number in attendance Unallowable as direct or indirect costs to the university – must be allocated correctly to unallowable expense types or appropriate function If you have expenses that are associated with events that have a social nature, like visitor receptions, alumni reunions or where you are entertaining donors or prospective donors, these expenses are reimbursable. These types of events are considered necessary to further the university’s interests. The expenses associated with these events should be reasonable, meaning that the dollar amount of the expenses incurred should align with the expected business benefit. Additionally, the business purpose of the event should be clearly documented and must include information about who attended the event (such as names of the individuals or group that the event is held for) and the total number of people in attendance. If there is a question as to whether your expenses would be considered entertainment rather than a more traditional business meal or meeting, one way to decide the answer is to consider whether or not companions or spouses were a part of the meal, meeting, or event. If the answer is ‘Yes’, it is most likely the expenses would be considered business entertainment. Expenses related to business entertainment must be charged to either the unallowable expense type or to an appropriate function that will prevent them from being included in the university’s direct and indirect sponsored project costs.

H&SS Guidelines for Business Meals
When faculty act as the department’s representative to recruit new faculty or entertain outside speakers: The cost of business meals for 2 – 5 people should not exceed $75 per person, including alcohol, tax and tip . For groups over 5 people, the total cost of the meals should not exceed $375. All exceptions should be approved by the department head. Dollar limits and number of attendees for graduate student recruiting or entertaining will be determined by the department. If you have expenses that are associated with events that have a social nature, like visitor receptions, alumni reunions or where you are entertaining donors or prospective donors, these expenses are reimbursable. These types of events are considered necessary to further the university’s interests. The expenses associated with these events should be reasonable, meaning that the dollar amount of the expenses incurred should align with the expected business benefit. Additionally, the business purpose of the event should be clearly documented and must include information about who attended the event (such as names of the individuals or group that the event is held for) and the total number of people in attendance. If there is a question as to whether your expenses would be considered entertainment rather than a more traditional business meal or meeting, one way to decide the answer is to consider whether or not companions or spouses were a part of the meal, meeting, or event. If the answer is ‘Yes’, it is most likely the expenses would be considered business entertainment. Expenses related to business entertainment must be charged to either the unallowable expense type or to an appropriate function that will prevent them from being included in the university’s direct and indirect sponsored project costs.

Examples of Prohibited PCard Expenses
Personal Purchases Purchases for travel or entertainment that occur while traveling more than 60 miles from the Cardholder’s designated home campus. Cellular devices, voice and data services and home internet charges. Purchases of: gas cylinders hazardous materials live animals warehouse club memberships This slide represents just some of the items that are prohibited from purchase with the university’s purchasing card. Additional prohibited items can be found in your handout packet. If you have any questions about prohibited purchases, please talk to your business manager.

8-2528 or University-contracts@andrew.cmu.edu
Service & Software Purchases <=$1000 Contract executed through the University Contracts Office is required and must be completed prior to the purchase. The fully executed contract must be attached to your PRC Verification along with the receipt. To use PCard when purchasing services and software <=$1,000: While services and software $1,000 and below may be paid for using a Purchasing Card, a contract executed through the University Contracts Office is required and must be completed prior to the purchase. The fully executed contract must be attached to your PRC Verification along with the receipt. Contracts Office Contact Information: or

Internet Purchases: Service & Software <=$1000
Many internet purchased services and software require the purchaser to enter into a contract and accept the suppliers terms and conditions. When presented with these terms and conditions: Forward terms and conditions to the University Contracts Office for review and approval before making the purchase. The Contracts Office will their response to the terms and conditions. The Contracts Office approval must be attached to your PRC Verification along with the receipt. Talk to consequences as well Note: University Contracts Office approval only extends to the specific transaction and is not a blanket approval for future transactions.

Miscellaneous types of expenses
Professional Development Expenses are reimbursable if approved by supervisor and content relates to job responsibilities Expenses associated with maintaining a professional certification not directly related to job responsibilities are not reimbursable Memberships, Dues, Subscriptions Individual memberships in business associations are reimbursable if approved by supervisor Fees for magazines, newspapers, newsletters – reimbursable if approved by supervisor Postage, office supplies, copying charges Reimbursable if purchased for business use, but we recommend purchasing these items through the department whenever possible Of course, expenses related to travel are not the only kinds of expenses that individuals incur as a result of working for the university. There are other business expenses that may be paid out-of-pocket that would need to be submitted for reimbursement as well. The expenses listed here are not meant to be all inclusive but just a sampling of some non-travel expenses. In the case of expenses that relate to professional development, these are reimbursable if the professional development opportunity, for example, a class or a workshop, is approved by your supervisor. Your supervisor should ensure that the content of the professional development opportunity relates to your job responsibilities at the university and that the budget can support the expense. Expenses associated with maintaining a professional certification that does not directly relate to your job responsibilities are not reimbursable. Expenses directly related to your job responsibilities for individual memberships to business associations (and corresponding dues) and subscriptions to publications are reimbursable with the approval of your supervisor. Miscellaneous types of expenses purchased with personal funds such as postage, office supplies, photocopies, etc. are all considered business expenses and are all reimbursable as long as there is proper documentation and a valid business justification. The preference would be that these miscellaneous types of business expenses would be paid for when possible using the purchasing card as that would allow the expense to be tax exempt.

Purpose and justifications
This section will provide information on who the expense policy applies to and defines their roles and responsibilities Purpose and justifications

Purpose & Justification
Purpose and Justification Who was involved in the expense? What does the expense represent? When did the expense occur (if other than the date on the receipt)? Where did the expense occur? Why or How does the expense relate to university business? While there have not been any changes related to the policy in terms of business purpose and justifications on expense reports or procurement card reports, we thought that this would be a good opportunity to provide guidance as to how to think about this information. If you create expense reports, you know that a Purpose is required on the report and if you create procurement card reports, you know that a Purpose is not required on the report. On both types of reports, additional information is required in the justification. All of the information provided on the report, the purpose and/or the justification, is important in order to allow a variety of people - approvers, division management, and auditors - to understand how the expenses relate to CMU business. A guideline to use when considering the information that should be provided to support an expense are the ‘5 W’s” Who was involved in the expense? What does the expense represent? When did the expense occur (if other than transaction date)? Where did the expense occur? Why or How does the expense relate to university business? While all of these questions may not apply to every transaction, the information should be included whenever available and relevant.

Example - Today’s Meeting
Answer The Five Questions For Today’s Meeting: Who H&SS Pcard verifiers and expense report preparers What Refreshments for 45 attendees Why (How) To provide training on appropriate PCard receipts and purchasing justifications When February 25, 2011 Where Baker Hall A53

Example – Today’s Meeting
Select “Refreshments” as Expense Type Refreshments provided at 2/25/11 training session in BH A53 to H&SS College PCard verifiers and expense report preparers on appropriate receipts and purchasing justifications (45 attendees). Enter justification into Oracle See handout for additional examples

Justification Guidelines
Answer These Five Questions: Who Who was the purchase for? Who are the affected individuals? What What was purchased? What does the purchase represent? Why (How) Why was the item purchased? Why did the event take place? How does it relate to business? When When did the activity/charge occur? Where Where is the event held? Where does the item reside?

Include Quantity for items such as:
Justification Tips Include Quantity for items such as: Food (Meals, Refreshments or Unallowable) 5 or fewer – list names of attendees More than 5 – provide total number of attendees Gifts List number of items purchased Gift forms required if amount exceeds $75 per person or for gift cards of any value Tickets or other items where appropriate ex., 100 Kennywood tickets for resale to students Remove bottom label

Justification Tips (continued)
For subscriptions/memberships, include the timeframe ex., 6 mo subscription (Jul-Dec 2010) ex., Jan 2010-Dec 2010 Include the year when entering a date ex., Jan 3, 2010, 1/3/2010, 1/3/10 Breakout alcohol on a separate line and charge to alcohol. If alcohol is not available, use unallowable

Justification Tips (continued)
Include titles of individuals external to CMU or note if the individual is a student If exception, note pre-approval in justification and attach/scan confirmation with receipt Read the justification as if you were an outsider to make sure it is clear 240 characters available to provide detail

Clarification of Expense Types & Justifications
Justification examples for food expense types: Snacks (cookies and milk) for presentation to students in Prof Claus’s Organizational Behavior class by guest speaker from North Pole Univ, Dr. R.R. Reindeer, on Dec 24, 2010 in HbH; 30 attendees. Refreshments Non-Travel Business Meals Lunch (pizza, cookies and milk) for presentation to students in Prof Claus’s Organizational Behavior class by guest speaker from North Pole Univ, Dr. R.R. Reindeer, on Dec 24, 2010 in A51; 30 attendees. Unallowable Lunch (pizza, cookies and milk) provided to students in Prof Claus’s Organizational Behavior class as an end-of-year celebration on Dec 24, 2010 in A51; 30 attendees. (not allowed for use in calculating University’s research overhead rate)

When purchasing food, what expense type should be used? When light snacks, cookies, non-alcoholic beverages, coffee, and/or pastries are being served in a meeting with a business objective. Refreshments Non-Travel Business Meals When more food is involved such as an entrée in a meeting with a business objective (ie: lunch meeting food – pizza, boxed lunches, Mad Max, etc.). Unallowable When expenses relate to alcohol, personal goods and services, and special activities. For example, holiday parties, celebrations, and other social functions with *no* business objective (ie: coffee/water for general use). Note: Alcohol must always be broken out separately. (not allowed for use in calculating University’s research overhead rate)

When purchasing supplies, what expense type should be used? Computing Supplies Computing supplies used in computers and printers including diskettes, tapes, toner, etc. Instructional Supplies Supplies used in classroom instruction, purchased from external suppliers. Office Supplies General office supplies excluding paper and computing supplies. Other Supplies Supplies that do not meet one of the other defined supply categories. Paper supplies used in printers, copiers, fax machines, etc. Paper Supplies Technical Supplies Supplies used in lab and research facilities purchased from external suppliers.

Justification examples for supply expense types: USB-512 Pen Drives for Paul Fischbeck to load course materials and distribute to students in Policy III class in Fall 2009 (in lieu of paper handouts). Computing Supplies Instructional Supplies Easel and flip chart to be used for brainstorming activities in Steven Klepper’s Economics classes for fall 2010. Office Supplies Office supplies (notepads, pens, staples, etc.) for general office use in the Philosophy department. Plates, napkins and forks for 1/5/2010 lunch in BPH 223D to plan website revisions for the Psychology department. Other Supplies

Justification examples for supply expense types (cont.): Paper Supplies Paper for general use in printers at English department offices in Baker Hall. Technical Supplies Cheese purchased to use as stimuli in behavioral decision making study conducted by Carey Morewedge Stopwatches used as incentives for exercise study conducted by Erte Xiao

Justifications - Examples
GOOD BAD One box of red pens, 3 rolls of bubble wrap, 1 pack of box-sealing tape. One box of red pens, 3 rolls of bubble wrap, 1 pack of box-sealing tape for general use by History department. Name tags and permanent marker pens for orientation week. Name tags and markers for identifying students, faculty, and staff during student orientation information sessions held in August 2010. Tip: For “Office Supplies” indicate if for general use or a specific purpose

GOOD BAD Conference registration for Terrance Hayes. Conference registration for Terrance Hayes to attend the Society for Technical Communication annual meeting in Philadelphia, PA from Nov 4-7, 2009 for professional development. Tip: For “Conference Registration” be sure to include why the individual is attending the conference (ex. presenting, professional development, networking).

GOOD BAD Holiday party for the SDS at the Schenley Park Visitor Center. Holiday party for SDS faculty, staff, and guests at Schenley Park Visitor Center on Dec 5, 2010; 300 attendees. Tip: For “Unallowable”, like all other expense types, be sure to cover the 5 W’s

Receipt Requirements H&SS policy requires that receipts for all transactions be collected. When the new Business & Travel Expense Policy goes into effect, only those $75 and greater must be scanned and attached to the PRCs and ERs.

What information must be included on a receipt ?
Required Documentation What information must be included on a receipt ? Merchant Name Date of Purchase Reference to the method of payment (ex. credit card number) Amount of the purchase Items purchased - itemized You should use the following list as general guidelines for the type of information that should be provided on a receipt in order for the receipt to be considered adequate support for the expense. Information that should be available on the receipt includes: Merchant Name, the date of the purchase, a reference to the method of payment (whether it be cash/credit card/or check), the total amount of the purchase, and a detailed listing of items purchased.

Example #1: Receipt-Acceptable or Not?
Not Acceptable Missing: What was purchased

Not Acceptable Missing: Merchant, Date, Credit Card Proof

Yes-Acceptable Credit card receipt plus detail receipt with all required information.

Yes-Acceptable All necessary detail on receipt.

What if receipt is missing or not legible?
Cardholder/ Preparer should contact vendor in an attempt to obtain an appropriate receipt Cardholder/ Preparer should complete the Missing Receipt Form (Finance-Forms page) Preparer should attach/scan completed form to report Note: Frequent use of the Missing Receipt form and/or submitting inadequate receipts will be considered an audit violation and will be reported to the designated departmental finance representative.

Missing Receipt/Packing Slip Form
Example for a “tangible good” Example for a “meal” New form – to replace these examples?

PCard Guidelines (Issued January 10, 2011)
Link to new guidelines: All PCard holders and approvers must review The PCard/Oracle Help Desk or PCard Newsletters Mention handouts provided for PCard Verifiers: Margie’s Sheet – Good Justifications

Business and Travel Expense Reporting
This section will provide information on who the expense policy applies to and defines their roles and responsibilities Business and Travel Expense Reporting

Considerations when the traveler is flying
Who is paying for the airfare and related charges? If charging to federal funds, must use a US flag carrier to the extent possible (Fly America Act) What kind of airfare can be purchased – coach/business/first class? Class of airfare chosen should be the lowest price coach Is first class and/or business class reimbursable? Yes if the department head approval is documented ***Reference travel handout packet [narration needs to address preparers rather than travelers] If your travelers need to fly as part of their business travel, the first thing to consider is who will be paying for their airfare expense? If they will be charging their airfare to federal funds, per the ‘Fly America Act’ they must use a US flag carrier, to the extent possible. If you have any questions about how to interpret regulations related to federal funds, you should contact the your business manager. A common question is ‘What kind of airfare can be purchased?’ The answer is that the lowest price coach airfare should be purchased. However, there are certain scenarios where premium airfare - business class or first class - would be considered reimbursable if it is approved as an exception by the departmental approver prior to the trip. Specifically, if a flight requires the traveler to fly overnight (for example, taking the red-eye) or if the flight is longer than 8 continuous hours, first class or business class is reimbursable with documentation of departmental pre-approval.

Considerations when the traveler is flying
Related Charges Reimbursable – Yes/No/Departmental Approval Standard Baggage Charges Yes Excess Baggage Charges Dependent on business purpose and departmental approval Upgrade Charges Dependent on business purpose & prior departmental approval Airport Parking Yes – low cost alternatives are recommended Change Fees (earlier/later flights) Dependent on cost/benefit justification and departmental approval Other expenses that are associated with flying can be seen in this chart with an idea of whether the expense is reimbursable under the policy or reimbursable as an exception. Please note, there must be a business purpose or justification provided and department approval in order to substantiate the exception approval request.

Considerations if travelers drive their own vehicles . . .
Use of a personal auto is reimbursable based on the IRS mileage rate, actual driving distance, and most direct route. IRS mileage rate includes the cost of gas, repairs, and personal auto insurance. Tolls and parking fees are reimbursable while parking tickets, fines, etc. are not. When the use of a personal vehicle is necessary for University business, please note that the University will reimburse your costs using the mileage rate established by the IRS and the reimbursement will be based on the number of miles driven for the business purposes. It is expected that the mileage reported for reimbursement will be the actual driving distance and it assumes that the most direct route was taken to and from the destination. The mileage rate provided by the IRS incorporates the cost of gas as well as a few other things – like repairs to your vehicle, and personal auto insurance. Therefore, if you use your own vehicle, you will not be reimbursed for expenses related to those types of items. Additionally, any tickets or fines incurred while traveling on University business will not be reimbursed. However, expenses related to fees for parking or tolls are reimbursable.

Rental Vehicles and Rental Insurance
How should the traveler go about renting a vehicle? Use one of CMU’s preferred suppliers when arranging for vehicle rental Standard vehicles are recommended Are upgrades reimbursable? Yes - if the department head approval is documented Should the traveler purchase rental vehicle insurance when renting in the U.S.? No – Traveler should decline rental vehicle insurance Should rental vehicle insurance be purchased when renting outside of the U.S. (U.S. territories/ Puerto Rico/Canada)? Encouraged to purchase any auto insurance related to liability and physical damage that is required by the specific country Personal effects coverage and personal accident insurance will not be reimbursed Similar to considerations when flying: If you need to rent a vehicle when traveling on university business, there are a few questions that generally come up. You should know that CMU has preferred vendors for car rentals and the use of these vendors does provide you with a discount. If you ever wonder what size of vehicle you should rent, compact or standard vehicles are the recommended option, however upgrades are reimbursable if the expense is pre-approved by your designated departmental finance representative. If an upgrade is approved, the detailed explanation for the upgrade should be included in the business justification. As for the rental vehicle insurance, while the rental agents will attempt to sell this to you, you should not purchase the insurance from the rental agency. The rental agency should waive the charges and indicate that you’ve declined coverage. The Office of Risk Management can provide additional information if you have any questions. What about if you are not renting a vehicle in an area where the US auto insurance policy applies? If this is the case, you are encouraged to purchase any insurance that is required by the specific country that covers liability and physical damage and you would be reimbursed accordingly. Please note that expenses related to personal effects coverage and personal accident insurance are not reimbursable. Questions related to vehicle rentals, either domestic or international, should be directed to the Office of Risk Management.

If traveling via Ground and/or Rail
Taxis/Shuttles Taxi and shuttle fares plus tip are reimbursable if expense is incurred due to business purposes Rail The class of rail travel chosen is expected to be the lowest-price coach rail ticket available; premium fares are subject to budget availability and prior approval Expenses related to taxis or shuttles are allowed under the expense policy if the service relates to a business purpose. Expenses related to traveling by rail will be reimbursed as long as the class of rail travel chosen is the lowest-price coach rail ticket available. In some cases, premium (for example, first class) fares may be an appropriate business expense. If so, travelers are encouraged to request pre-approval for the premium fare from their department head.

What about Foreign Travel?
Same general policies apply to foreign travel Countries where travel advisories have been issued can be found on the US State Dept website Foreign travel funded by sponsored grant/contract may require approval prior to travel Check with your business manager on questions/interpretations of restrictions Expenses incurred as a result of traveling abroad are governed by the same policies that govern expenses incurred while traveling domestically. If you are traveling abroad please be aware of any travel advisories that are issued by the US State Department, which can be found on their website at travel.state.gov. Also, as a reminder, if your foreign travel will be funded by a sponsored grant or contract, you may need to receive prior approval of your travel from the sponsor. Please check with your business manager for guidance related to questions or interpretations of Federal or sponsor restrictions. Your business manager may need to consult with the Sponsored Project Accounting Office for guidance.

Per Diem: What it is, Where it comes from, and Who can use it
What is a per diem? A fixed amount of daily reimbursement that can be given for lodging, meals and incidental expenses when traveling on business Where does the per diem amount come from? U.S. locations - General Services Administration (GSA); Int’l locations - U.S. State Department Depts. may set per diems at less than the GSA rate, but never greater Who can be reimbursed using per diems? Only CMU employees In H&SS, only faculty and staff may use per diem; graduate students must submit actual receipts Employees of the University can choose to leverage per diems when traveling. A per diem is a fixed amount of daily reimbursement that can be used for lodging, meals, and incidental expenses when traveling on business. The determination of the fixed amount for each location is made by the General Services Administration (GSA) – a government agency. To determine the per diem rate that corresponds with your travel locations, check the GSA website, which you can access from the Finance Division’s website. Departments and divisions on campus may offer a lesser per diem amount than what can be found on the GSA website to their employees or choose to not allow the use of per diems at all. The per diem amount offered by the department/division cannot be greater than the per diem amount determined by the GSA. The use of per diems is restricted to CMU employees only.

GSA Per Diem Meal & Incidentals
As mentioned in the Policy Overview presentation, the breakdown of the daily amount that can be reimbursed by meal is provided on the GSA site as well. This information can be helpful during the preparation of the expense report in order to verify the accuracy of the expense amount requested for reimbursement. In this example, the per diem rate of $71 is appropriate for San Francisco. Therefore, the daily per diem for meals and incidentals that a traveler should submit would either be $71 or potentially less depending on whether or not they actually incurred expenses for breakfast, lunch, and dinner. The per diem information provided on the GSA site – both the information specific to the locate rate as well as the breakdown of the expenses shown here – should be scanned and attached to the expense report to assist the approver of the expense report in approving expenses associated with per diems. Helpful Tip: Print the information from the GSA site that supports the per diem and scan and attach to the report to assist the approver.

If buying meals while traveling . . .
Meals for self included as part of the fee of a conference/workshop/hotel reservation, etc.? Expenses for any meal already included in fee should not be submitted for reimbursement Meal per diem must be reduced for the included meals Paying for meals for others while traveling? Requires a valid business justification Names of the meal attendees (if 5 or fewer) must be provided in justification; Traveler’s name and just the number of attendees if 6 or more When purchasing meals while traveling, only university employees can choose to utilize per diems for meals. However, in situations where meals are included as part of a conference registration fee or if, for example, a hotel you’re staying at offers a continental breakfast as part of the room charge, expenses for those meals should not be submitted for reimbursement either as actual expenses nor per diems. Additionally meal per diems must be reduced for any meals that are rolled into other expenses – such as the hotel room charge or the conference registration fee. As mentioned previously, the breakdown of the daily per diem rate for each meal can be found on the GSA website. If you are purchasing meals for others while traveling, there must be a valid university business reason for the expense. If you hosted a business meal for five or fewer people, the names of the attendees (including their affiliation with the university if they are not employees), along with the business purpose of the meal must be provided. If there were 6 or more people attending the meal, only the total number of people must be documented for reimbursement purposes. Please remember that if you have purchased a meal for others while traveling and you are claiming per diem meals during your trip, you must not seek reimbursement of the per diem meal amount for the meal that you purchased for others. Instead, you must reduce your per diem for that specific meal.

AND Alcohol – Reimbursable & Unallowable
Reimbursable with a valid business purpose: Meals between colleagues Functions for special events/business entertainment Meals associated with recruiting Unallowable Not allowed to be charged to or paid for by Federal funds AND Expenses related to alcohol always seem to generate questions and concern. If a meal or event includes alcohol, you can be reimbursed for the expense, including the alcohol, as long as there is a valid business purpose. However, when the expense is submitted for reimbursement, alcohol must be charged to the expense type of ‘Unallowable’. Please note that charging to ‘Unallowable’ does not mean the expense is ‘Un-reimbursable’. Expenses that are to be submitted as “unallowable” cannot be charged to the federal government either directly or indirectly. Additionally, charging certain types of expenses, such as alcohol, as ‘Unallowable’ enable them to be excluded from the system generated calculation of the overhead costs of the university. For expenses being charged to our Qatar campus, alcohol and tobacco are not reimbursable OR allowable. Further information related to alcohol with respect to university business or social activities can be found in the Drugs and Alcohol policy available on the CMU policy website. NOTE: Alcohol, and tobacco as well, is neither reimbursable or allowable when charged to a Qatar entity.

Expense Report Preparation
This section will provide information on who the expense policy applies to and defines their roles and responsibilities Expense Report Preparation

Non-Employee Expense Reports
Expense reports for non-employees (anyone who does not have a paid appointment in HREM) cannot be submitted via Oracle Expense Reports Non-Employee Expense Report (paper) form must be completed and sent to Travel and Expense Reporting (UTDC) along with the original receipts (>= $75) for processing – regardless of report’s dollar amount Let’s start with expense reports for non-employees or those who are not active employees of the University – this could include individuals without an active HREM record, courtesy appointments, retirees, directory employees, and terminated employees. Expense reports for these types of individuals can not be submitted via the Oracle Expense Reports application . If a business expense preparer attempts to process an expense report through the Oracle Expense Reports application, the preparer will notice that the individual’s name will display with a ‘Non-Active Employee’ designation. The preparer will not be able to move past the very first step of the Oracle Expense Report process and will instead receive an error message. Expense reports for these types of non-active employees will need to have a Non-Employee Expense Report Form completed and submitted to the Travel and Expense Reporting group (located in the UTDC) for processing. Please note that for non-Employee’s, the original receipts of $75 and greater that support the expenses on the form should be included with the Non-Employee Expense Report form. Copies of the receipts for Non-Employees are not acceptable. Also, it should be pointed out that ALL Non-Employee Expense Reports must be processed for payment by the Travel and Expense Reporting group and that the Hub will no longer be processing forms that are $25 or less. If you need to use the Non-Employee Expense Report form, please note that it has been revised and is available on the Finance Division site.

Form for Non-Employee Expense Reports
New form being created for Non-Employee Expense Reports

Non-Employees Example: Error message resulting from attempting to begin an expense report for a non-active employee: courtesy, directory, retired, terminated. As mentioned previously, if a business expense preparer attempts to create an expense report in Oracle for an individual who is not an active employee in HREM, an error message will display in Oracle. This error message occurs if you have chosen an individual who has ‘Non-Active Employee’ associated with their name in Oracle and if you try to advance from Step 1 in the expense report creation process to Step 2. Please note that if there are questions about an individual’s non-active status, those questions should be directed to either the HREM administrator associated with the individual and/or Human Resources. NOTE: Questions about an individual’s non-active status should be directed to H&SS department business manager.

Non-Employee Expense Report
What are the requirements of the non-employee ER? contains detailed explanation of the relationship of the individual to the university clearly describes the business purpose of the expenses includes proper supporting documentation is approved by an individual in the department who has appropriate financial oversight Travel and Expense Reporting will audit the expense report (prior to payment) for: valid business purpose accuracy proper supporting documentation including original receipts; additional information may be requested. Refer back to business purpose and justification – 5 W’s In order for a non-employee to be reimbursed for their university related expenses, the Non-Employee Expense Report must contain a detailed explanation that supports the relationship of the non-employee to the university. The business purpose of the expenses must be clearly described on the form and documentation that supports the expenses must be attached to the form as well. Finally, the form must be approved by someone within the department who has the appropriate financial oversight to approve the expenses. Once the form is completed and sent to the Travel and Expense Reporting group, the non-employee expense report will be audited prior to payment to ensure the presence of a valid business purpose (including the relationship the individual has with the university), accuracy, and proper supporting documentation. As mentioned earlier, unlike the process for CMU employees, the original receipts for the non-employee expense reports should be included with the packet of information that is sent to the Travel and Expense Reporting group. Additional information may be requested of the preparer of the Non-Employee Expense Report and/or the individual requesting reimbursement.

Non-Employee Expense Report
Per diem rates cannot be used for non-employees and graduate students Photocopy all receipts $75 and over and attach the original receipts to the paper report Copies of the receipts will be kept in the department Receipts for expenses $75 and greater should be scanned/photocopied and attached to expense reports when submitted for approval. Reports submitted for approval without required receipts will be returned automatically to the preparer. Only copies of the receipts along with the expense report should be submitted to UTDC. The original receipts for the expenses should be retained in the department per your department’s specific guidelines. If there are questions about the requirements of retention you can refer to the Record Retention Policy for more information.

CMU Employee Expense Reports
Need only full name to identify Individual must be on preparer’s “list” for access Note: If the person is not in your drop down list, please ask your Business Manager Itemized original receipts for all reimbursements including those under $75 must be submitted to the department preparers Data (address, phone, , etc.) already “in” Oracle

H&SS Travel Expense Reimbursement Request Form – Page 1

Purpose Describes the business purpose for the travel undertaken and for which associated expenses reimbursement is being requested Where (destination) When (dates of travel) Why (e.g., conference attendance)

Purpose - Examples Purpose: Chicago, IL; Jun 5-6, 2010; To attend National Association of College and University Business Officers (NCUBO) conference on Valuation of Financial Information for professional development. Purpose: Los Angeles, CA: January 4-7, 2011; to collaborate on research with Dr. Daffy Duck of Univ. of CA LA (UCLA)

Expense Lines Describe the following:
What (a general identification of the type of expense) Justification (details/description) Traveler’s H&SS form will identify general categories of expense reimbursement (e.g., hotel, airfare) Preparer must align traveler provided information with CMU object codes and/or “pick list” values (e.g., hotel = lodging) (handout: commonly used travel object codes)

Expense Lines – Justification (details/description)
H&SS Travel Expense Reimbursement Request form and – particularly - provided receipts will identify this information. This is an explanation of what the cost is, of why it is appropriate for payment. The following pages contain acceptable receipts and justifications.

Lodging – Example: Receipt
Highlight selfpark and wfb package – identify expense types

Lodging – Examples: Justification
Justification: Accommodations on 5/1/10 for guest speaker, Stacy Monk, Prof of UCLA, who presented her research on “How Public Policy Regulations Affect Violence in the U.S.” at the Heinz Speakers Convocation Series held on 5/2/10 in HBH. Justification: Lodging from Oct 11-14, 2009 for Uni of Calif prof Martin Smith to meet with Lowell Taylor at CMU to discuss and Collaborate on research. Justification: Marriot Hotel expenses from June 7-9, 2009, for guest lecturer Aaron Hidges of Intrepidus Group, for the MISM course Hacking Exposed taught in summer

Conference Reg – Example: Receipt

Conference Reg – Examples: Justification
Justification: Conference Registration for Patty Page (PhD Student) to attend the Institute of Education Sciences (IES) Research Conference annual meeting in Nashville, TN from Sept 3-6, 2010 to present a research paper. Justification: Registration for Samuel Adams to attend the annual conference on Recharge Centers in New York, NY on April 1, 2010 for professional development and networking. Justification: Fee for Susan Timko to attend the annual National Association of College and Employers conference in Orlando, FL, June 1-4, 2009, to establish relationships with potential employers for Heinz College Graduates.

Airfare – Southwest - Example: Receipt #1

Airfare – Example: Receipt #2

Airfare – Examples: Justification
Justification: Airfare for Patty Page (PhD Student) to attend the American Psychological Association annual meeting in Las Vegas, NV from January 6-9, 2010 to present a research paper. Justification: Airfare for Samuel Adams to attend the annual conference on Recharge Centers in New York, NY on April 1, for professional development and networking. Justification: Airfare for Susan Timko to attend the annual National Association of College and Employers conference in Orlando, FL, June 1-4, 2009, to establish relation ships with potential employers for Heinz College Graduates.

Meals – Examples: Receipts

Meals – Example: Justification
Justification to include at least the following: Date Restaurant Name Meal (breakfast, lunch, dinner) Note: Alcohol must be broken out, charged to non-research funds, and charged to the unallowable object code 85916

Parking – Examples: Justification
Justification to include at least the following: Date Parking facility name Example: Parking at Pittsburgh International Airport while attending the American Psychological Association annual meeting on May 1-3, 2010.

Taxi/Shuttle – Example: Justification
Justification should include the following: Date Type of receipt (taxi or shuttle) Destination (conference to airport, etc.) Example: Taxi from airport to Hotel name in Nashville, TN, for Kevin Jones while attending the American Psychological Association annual meeting on March 1-2, 2009.

Prepaid Travel Expenses
Conference registration and airfare can be reimbursed before travel occurs. All other expenses must wait until the completion of the travel. Prepaid expenses will be tracked by the department to verify that the travel was completed. If the travel is canceled or postponed, the business manager will discuss the next steps with the traveler. If purchases cannot be applied to a future business purpose, the traveler may be asked to return the reimbursement or accept income tax liability.

Standard Approval Path in H&SS
When the Reimbursee is: Faculty, Staff, or Graduate Student Department Head Receipts are given to: Preparer in the department Approver is: Business Manager Business Manager who forwards to: Final Approver: ALG Representative (Assistant Dean)

Preparers and Approvers Checklist
Signed reimbursement form (H&SS Business Expense Reimbursement Request or H&SS Travel Expense Reimbursement Request) is received. Proper documentation and/or signatures for any exceptions is received. All receipts have been submitted by the person requesting reimbursement. The 5 W’s (Who, What, Where, When, Why) have been answered.

Checklist (contd.) Correct account strings and PTAs have been charged. For grants, check that the expense is allowable. Scanned receipts include only those that are $75 and over. Receipts are scanned in portrait format if possible and scanned in the order that is on the screen.

H&SS Implementation Differences
Business Meals When faculty act as the department’s representative to recruit new faculty or entertain outside speakers: The cost for business meals with guests should not exceed $75 per person, including the alcohol, tax and tip. The total cost of the meal for groups larger than 5 is limited to $375, including the alcohol, tax and tip. All exceptions require approval from the Department Head. Dollar limits and number of attendees for graduate student recruiting or entertaining will be determined by the department.

H&SS Implementation Differences
Graduate Students Graduate students must submit receipts to be reimbursed for all expenses. No per diem reimbursements will be made. Receipts Itemized original receipts for all reimbursements including those under $75 must be submitted to the department preparers.

Websites for Reference
New Policy for all Travel and Expense Reimbursements CMU Business and Travel Expense Policy H&SS Business and Travel Expense Policy Per Diem Rates U. S. General Services Administration (GSA) for U.S. travel: Foreign Per Diem Rates Travel Warnings & Alerts US Dept of State:

Business & Travel Expense Policy: An Overview

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Business & Travel Expense Policy: An Overview

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