Travel Reimbursement Policy Presentationppt - Harvard Univer

					Harvard University
Travel & Reimbursement
Policy Briefing

   Faculty of Arts & Sciences

      Reasons for this Briefing

• To clarify travel and reimbursement policies in
  accordance with:
  –   IRS and other Federal regulations
  –   University policies
  –   Office of Sponsored Programs policies
  –   FAS spending guidelines

• To improve reimbursement processing
  – Provide a practical, yet compliant, approach to policies
  – Pinpoint problem areas
  – Create better overall efficiency
       Sound Practices in Light of Current
       Federal & Non-Federal Audit Trends

 Know the rules and adhere to them
 Follow University Policy
 Do not submit or sign off on transactions if you
  feel uncomfortable about information provided
 Ask Questions and Raise Concerns
 Participate in Training
 Know resources available to you

FAS Spending Guidelines

        Air Travel – Domestic & International

Domestic travel is defined as “within and between
  any of the continental United States and its
  territories and possessions (Puerto Rico, US Virgin Islands,
  Guam and American Samoa), with the exception of Alaska
  and Hawaii. Also includes flights to Canada and
  Mexico under six (6) hours.”
International travel is defined as “to Alaska, Hawaii
   and destinations outside North America as well
   as flights to Canada and Mexico that exceed six
   (6) hours (use non-stop flights as benchmark).”
            Air Travel – Class of Service

Book lowest available economy airfare using:
• Desired travel time (morning/afternoon/evening)
• Airport of choice
• Non-stop flight if desired by traveler
Additional criteria for air travel on federal funds:
•   Required use of Preferred Travel Agencies
•   May use other agents or websites when departure & arrival points are
    completely outside US
•   Domestic flights – must use US-flag carriers only
•   International flights – Fly on US-flag carriers when departing US & where
    available abroad, even if more costly
•   Use foreign-flag carriers when no US carriers provide service in area or when
    use of foreign carriers is a necessity

        Air Travel – Other Classes of Service

• Business Class is allowed when traveling to Alaska,
  Hawaii and destinations outside North America as well
  as travel to Canada or Mexico that exceeds six (6) hours
  (including travel on federal funds).
• First Class is not allowed unless exception is granted
  by the FAS Financial Office based on documented
  medical or other extenuating circumstances.
  Note: Excess airfare may not be charged to federal
  funds. If more costly fare is authorized (1st Class for
  International travel or 1st Class & Business Class for
  Domestic travel), must split code fare using 8450 with
  excess to a non-sponsored funding source.
            Air Travel – Preferred Travel Agency

Acceptable reasons for not using preferred agency when traveling on
  federal funding:
•   Needing to make last minute arrangements that preclude ability to access PTA’s
•   Non-Harvard visitors booking their own flights
•   Foreign travel to and from destinations not supported by PTA’s
•   Group excursions (same individuals to same location for same purpose)
•   Government airfare rates
•   International only, if traveler is able to demonstrate savings of 25% or more
    using non-preferred vendor as compared to a PTA (for the same itinerary)
    AND obtains prior approval to book the trip from the Travel Office. [Traveler
    must obtain supporting documentation to get approval – copies of airfare
    itineraries from both the non-preferred vendor and PTA for same itinerary &
    class of service is required.]
    Note: Harvard students and post-docs traveling on federal grants are subject to
    the same air travel rules/regulations as faculty & must use a PTA
          Air Travel – Preferred Travel Agency

When processing travel booked through a non-preferred vendor,
  write an explanation of the exception in the “Note to Approver”
  field on the Travel Expense Report/Web Voucher form.
If 25% savings exception applies, also include copies of the two
    itineraries and the prior approval from the Travel Office with the
    Travel Expense Report.
If an acceptable rationale is not provided or prior approval is not
    obtained (25% savings), the expense report will be returned and
    the entire amount must be charged to a non-sponsored account.
For more information concerning air travel on federal funds, refer to
   the Sponsored Travel Cost Guidelines on the OSP website.

            Car Rental

May rent up to and including a full-size vehicle.
TO a destination when:
•   Driving is demonstrated to be more convenient than air/rail travel
•   Driving is necessary to transport bulky material required for business
AT a destination when:
•   Renting is less expensive than other modes of transportation such as taxis,
    airport van services and shuttles, and train service.

FAS Travelers should:
•   Use Preferred Car Rental Agencies with negotiated rates
•   Refer to Car Rental Insurance Guidelines located in Travel Policy Manual on
    Travel Office website – most insurance should be declined for Domestic travel.
    Travel Office will not reimburse for this expense if insurance is purchased.
    NOTE: Student drivers of rental cars have special restrictions.
               Refer to Travel Policy Manual for details.
            Use of Personal Car

Employees and visitors may use personal car if:
• It is less expensive than renting a car, taking a taxi, or using
  alternate transportation such as train and plane.
• It saves time.
• For long distance travel, Travel Office requires documentation
  comparing mileage to flight costs. If mileage is higher, an
  approved Exception Request is required.
Mileage calculations:
•   From home or office, whichever is less, to the business destination.
•   Normal commuting miles cannot be included.
•   From home to airport is allowed if traveler works from home for all or part of a
    work week or cost of other means of transportation greatly exceeds mileage,
    tolls and parking combined.
•   Must provide to and from locations on Expense Report (MapQuest is great!)
          Other Ground Transportation

• Train Travel – Domestic and International
   – Standard or economy class travel is allowed for travel less than six hours
   – Business class travel is allowed for:
       • Trips between Boston – New York (or return)
       • Trips between Boston – Washington, DC (or return)
       • Travel over six hours
   – First class travel is allowed only outside of the U.S. where a reserved seat is
     required and cannot be guaranteed by booking in another class of travel
• Sedan Service
   – Should be used only when valid business reasons preclude use of taxi
     service or airport van/shuttle service. Acceptable reasons are:
       • Travel with the President, Provost or Deans of FAS
       • Travel with major donors or publicly-recognized celebrities.
   – Should use Harvard’s Preferred Vendors with negotiated rates

     Use of limousines is strictly prohibited by the University!

FAS Travelers should purchase a standard room using
the following guidelines:
•   Harvard’s Negotiates Rates at Partner Hotels (primarily Cambridge)
•   Average Corporate Rate (Select Cities)
•   Federal Per Diem Rate (All Other Cities)
(Found on Travel Office Website – the first two categories are found under “Exclusive Travel Discounts”. Average
Corporate Rates are also available on the FAS Financial Office website –

Travelers must obtain an exception approval if rates
exceed guidelines by more than 40%.
Hotel rates above the guidelines are allowed when part of a
conference package (must provide proof to Travel Office if 5-Star)
Travelers may claim actual hotel expenses or lodging per
diem but may not mix claim types on same trip.
        Use of Private Residence

Travelers who stay in a private residence may not
claim lodging per diem for their stay.
Travelers will be reimbursed for actual expenses
incurred to extend appreciation to host.
Per stay, such expenses are limited to:
  – One gift under $75 or
  – One meal of appreciation   (subject to FAS meal guidelines)

Note: All gifts and meals of appreciation should be coded
to 8450 and may never be charged to Federal funds.
         Travel & Business Meals

• FAS Meal Guidelines
  –   Dinner - $75 per person
  –   Lunch - $35 per person
  –   Breakfast - $25 per person
  –   Receptions - $35 per person for food and drink
  –   Guidelines do not include taxes and tips (up to 20%)

• Travelers on business trips may claim either
  actual meal expenses or meal per diems for same
  trip up to the guideline maximums. They may not
  mix claim types on same trip.
        Travel & Business Meals

Business meals are defined as “with business
  acquaintances, students, colleagues and donors
  during which specific documented business
  discussions take place.”
Business meals with other employees are defined
  as “meals between staff conducted off campus
  for confidentiality reasons or for reward or other
  appropriate business purpose.”
  Note: Meals and receptions which are social in nature (reward,
  recognition, holiday celebration, etc.) should be coded to 8450
  and may not be charged to federal funds. Any costs associated
  with alcohol must be charged to object code 8450 and may never
  be charged to federal funds.                                  16
          Telephone Usage while Traveling

• FAS Travelers can be reimbursed for business
  telephone calls that are reasonable and necessary for
  conducting business
   – Itemized hotel folio or an original telephone bill showing the calls must be
     included on Travel Expense Report.
• FAS Departments can choose to reimburse travelers for
  personal telephone calls while traveling
   – Calls should be reasonable in cost and number (1-2 per day) in order to
     stay in touch with family
• Use of AirPhones is not allowed except in emergencies
  or in cases of extenuating circumstances
   – Emergency or extenuating circumstances must be noted on the
     reimbursement request

           Federal Unallowable Expenses

Certain types of items within the general board direct-cost categories must
   not be charged to federal awards:
         Basic Administrative and Operational Costs
         Office supplies, pens, paper, basic software, etc.
         Local telephone and fax; telephone line and equipment charges
         General clerical and secretarial assistance (some exceptions)
         Laptops and desktop personal computers (considered multi-use)
         Postage, express mail (except freight to ship component parts)
         Hazardous waste disposal
         Proposal preparation costs
Research-related Expenses                     Personal Use Goods/Services
   Books and periodicals                      Sales Tax
   Dues and memberships                       Alcohol
   Photocopying                               Flowers
   Conference fees (except project paper) Catering
Miscellaneous Unallowable Expenses            Gifts
   Student Activities                         Space Rental/Furniture
   Fines and penalties                        Construction/Housing/Living Expense
   Harvard University

         Who Does Policy Cover?

ONLY EMPLOYEES – Faculty and Staff; Full or Part Time

• Students and non-employees are encouraged to submit
  reimbursement requests in accordance with the policy time frame.
• Students – both undergraduate and graduate – are always
  considered students for this reimbursement policy only.
• No exception approval is required to reimburse students and non-
  employees not in compliance with the policy time frame.
• The requirement that reimbursements be documented and
  substantiated business expenses holds for anyone seeking
  reimbursement from University or sponsored funds.

          Time Frame for Submission

•   To satisfy the IRS accountable plan rules governing non-taxable
    reimbursements, travel expense reports must be submitted to the
    Travel and Reimbursement Office within the following:
    –   60 Days from the end date of trip or date expense was incurred for non-
        travel related expenses;
    –   61 to 90 Days from end date of trip or date expense was incurred for non-
        travel related expenses WITH approved Exception Request from FAS
        Financial Office. (FAS Financial Office has no discretionary power after 90 days)

•   Taxable Reimbursements
    –   61 Days after end date of trip or date expense was incurred for non-travel
        related expenses, where no exception exists or Exception Request is
    –   process through ASPerIN as Late Reimbursement (code = LRB)

•   183 Days after end date of trip or date expense was incurred, no
    payment of any kind will be allowed.                        21
       Requesting Exceptions

Exception Approval allows for processing of expenses as
non-taxable reimbursement through Travel Office.
To initiate request for University or FAS policy exception:
   – Fill out Exception Request Form found on FAS Financial
     Office website under “Recent Policies and Forms”
   – Department Administrator or Financial Officer submits via e-
     mail to

Requests must fully document extenuating circumstances.
Lost or misplaced receipts are not considered extenuating
circumstances - no exception approval will be granted.
        Processing Late Reimbursements

Any reimbursement request that falls into the
Taxable Reimbursement category must be
processed through the ASPerIN payroll system:
   – Use Gift/3rd Party option and earnings code LRB
   – Must be approved locally by Department Administrator or
     Financial Officer
   – Print out the PS Form and attach copies of all receipts and
     supporting/back-up documentation
   – Sign and forward form and copies of receipts and back-up
     documentation to your Payroll Service Coordinator
   – Return original receipts to employee for inclusion with personal
     income tax return
   – Payment will be made on next available regular paycheck
    Absolutely No Grossing Up for tax withholding
        Extended Business Trip Exemption

University policy allows automatic exemption from
60-day rule for extended business trips:
  •   Trip must be 30 consecutive days or longer
  •   Traveler has 120 days from BEGINNING date of trip to submit
      an initial reimbursement request
  •   Traveler may include initial expenses, such as airfare, but 120-
      day clock starts ticking from date of airfare purchase
  •   Reimbursement requests must be submitted every 120 days
      while traveling or “settled” within 60 days from end date of trip
  •   Any expenses older than 183 days will not be paid
  •   Leaves do not qualify for this exemption

        Non-Travel Allowance Exemption

University allows automatic exemption from 60-day
rule for expenses paid from an annual research
allowance or professional expense allocation.
  •   Every effort should be made to submit reimbursements in
      same fiscal year in which expenses were incurred and in which
      allocation was made.
  •   Allowance reimbursements, however, must be submitted no
      later than 12 months from date expenses were incurred.
  •   Sponsored grants do not qualify for this exemption
  •   Travel Expense Report or UEF must include the terminology
      Allowance Reimbursement at the beginning of the Business
      Purpose section.

Reimbursement or Payment of Pre-travel expenses:
Allowed for GE Corporate Card payments of travel
   expenses such as airfare, hotel deposits & conference
Allowed for direct payment by Harvard to Preferred Travel
   Agencies (through invoice or BCD’s direct billing)
NOT allowed for personal credit cards or out-of-pocket

WHY? University cannot track cancellations or refunds if
 credits go to personal cards or checks go to individuals.



• All travel and purchases must be
  – Business expenses
     • Necessary and appropriate for the conduct of University
     • Primarily benefit the University - not the traveler
  – Documented
     • Thorough business purpose is required on either the Travel
       Expense Report (WV) or the UEF
     • Proper substantiation of the amount by providing receipts or
       a Missing Receipt Affidavit
     • Signed by the reimbursee – not optional

         Business Purpose – The 5 W’s

Detailed Business purpose is required by the IRS. The
UEF should include all 5 components below:
  – WHO            incurred expense (and/or who visited)
  – WHAT           type of event, activity or purchase
  – WHEN           event/activity/purchase took place
  – WHERE          location of event or activity (travel only)
  – WHY            the expense was incurred

      The details should be sufficiently adequate for an auditor to
      clearly understand what the expenses were about and why
      they were charged to a specific fund.

          Business Purpose – The 5 W’s

The Who
   •   Name of individual who incurred the expense
   •   Names of others if more than one individual involved
          • 2-5 People, List full names of each
          • 5+ People, List readily identifiable Groups
                 (e.g. Prof. X’s 10 graduate students)
   •   For Non-Harvard, title and affiliation are also required

Auditor should be able to readily determine expense is business
related and not personal (lunch with Uncle Sam).

          Business Purpose – The 5 W’s

The What
      •   Clear description of event, activity or purchase:
            “chemical supplies for Barter Lab” vs. “supplies”
            “trip to Purple Haze Conference” vs. “trip to Conference”
                       Absolutely No Acronyms!
      •   Similar expense types can be grouped on the UEF
               Ground transportation (tolls, parking, taxis)
               Multiple meals

For trips with multiple under-$75 meal expenses with and without
receipts (trips over 5 days), list “meals – see attached” on UEF and
attach log with details - $$ amount/dates of daily breakfast, lunch and
dinner expenses (broken down by B/L/D).

       Business Purpose – The 5 W’s

The When
  • Beginning and ending dates of a trip
  • Date(s) item(s) were purchased

The Where (for travel only)
  • Exact location of trip – if city is not easily recognizable, must
    include state and/or country
  • For trips with multiple locations – must list them all

         Business Purpose – The 5 W’s

The Why
 Why the expense was incurred and how it relates to the
 fund being charged.
 This is the most difficult of the 5 W’s and particularly
 important when charging to sponsored funds.
 Using the Purple Haze Conference example, an acceptable why would be “to
 present a paper on blue/red combinations related to NSF project on color hues.”

 An unacceptable why would be “to present a paper” or “to present a paper on
 chocolate chip cookie mix” – cookie mix has nothing to do with color hues!

 If you have a conference brochure that gives the subject matter of the paper,
 you can write “to present paper - see attached” rather than fill in this information
 on a UEF. Only the PI will be able to give you the information needed in terms
 of how the expense or trip related to his/her grant unless it’s blatantly obvious.
         Receipt Requirements

Reimbursement requests must be accompanied by receipts
which substantiate the expense per IRS Regulations:
• Original receipts for all expenses $75 or more
   – Some departments require receipts for all $ amounts (or a
     MRA); check with local business or finance office
   – Any receipts not required by the Travel Office (under $75)
     should be filed locally
• All hotel receipts – a.k.a. hotel folios
   – Regardless of amount
   – Any personal charges must be:
         •   Crossed out on the folio - No movies! No mini-bars!
         •   Subtracted from the total reimbursement request
         •   Paid directly by the traveler

          Missing Receipt Affidavit

• If an original receipt is lost or
  misplaced, use a MRA
• For air travel, hotel stays or
  car rentals additional
  documentation is required
  (see MRA form for details)
• One MRA can support
  multiple expenses
• Both the reimbursee and the
  approver must sign the MRA
• In a pinch, Travel Office will
  accept a faxed MRA

        Per diem Reimbursements

Per diem is a daily rate assigned by the federal
government to a location for reimbursement of
lodging and meal & incidental expenses (M&IE).
• Reimbursement for travel may be based on per diems
  – Paid in lieu of actual expenses
  – Receipts not required – but proof of travel is required
• Per diems provided in advance are not allowed
• Rates are located on Travel Office website
  – Be sure effective date for per diem agrees with dates of travel

        Per diem Reimbursements

Remember to be consistent in reimbursement
method for the two claim types - lodging and meals.
  •   Travelers must choose to file either actual meal receipts or
      claim a meal per diem for entire trip – cannot mix.
  •   Travelers must choose to file either actual hotel receipts or
      claim a lodging per diem for entire trip – cannot mix.
[However, travelers may claim actual meals and per diems
for lodging or actual lodging and per diems for meals.]
  Note: Both actual and meal per diem amounts are subject to the
            maximums set in the FAS meal guidelines

         Per diem Reimbursements

IRS regulations require prorating of meal per
diems under certain circumstances:
   •   For trips more than 12 hours but less than 24 hours, use 75%
       of M&IE per diem rate
   •   For trips over 24 hours, use 75% of M&IE rate for the first day
       and last day of the trip
   •   When conference fees include meals*
         *Consult US General Service Administration website for $ amount to
         reduce per diem based on M&IE rate for conference city.
For multiple city trip, base meal per diems on flight times &
lodging where traveler slept. Use best judgment!

        GE Corporate Cards

Use ONLY for business-related purchases
• Do not share your card with anyone
• Why? Cardholders personal credit history is at risk
• If personal charges do occur, cardholder must pay GE
  directly & cross charges off statement
Credits for business-related purchases
• Use GE Credit in Web Voucher
• Use the same account coding as the original charge
• Credit Memo will be submitted directly to GE via Travel
  Office & proper account will be credited through G/L –
  extremely important if credits relate to charges on grants.

         Time Needed to Process GE Card

Purchase date of item – January 15th
Charge appears on GE statement – February 15th
Cardholder receives statement – February 20th
Statement reviewed by cardholder – February 25th
Administrator or assistant receives statement from cardholder –
March 1st
UEF & statement received by local financial office – March 8th
Average # of days to process or resolve issues – 8 Days
GE reimbursement request submitted to Central – March 16th
       One Day beyond University’s 60-Day Policy!
Highly recommend that cardholders give assistants online access to
their GE statements – process is more streamlined compared to
paper statements due to snail mail.                           40
       Why are reimbursement requests

Most reimbursement requests are returned by the
Travel Office due to basic policy violations:
  • Lack of proper documentation
       •   Business purpose was missing or incomplete
       •   Receipts were missing and no MRA was included
       •   Required FAS or Travel Office approval was missing
       •   Signature of the reimbursee or approver was missing
  • Expenses were unallowable under University policy
       •   Use of non-preferred Agency for federal airfare
       •   Use of wrong class of service
  • Expenses exceeded the time to be submitted (60
    Days) and did not have approval from the FAS
    Financial Office (60 to 90 Days)               41
       Would you be Prepared if Auditors
       Come Knocking?

• Guiding principal is that the University wants to
  provide auditors/inspectors with the information
  they need
• External agents may show up unannounced
  – Ask for identification
  – Request documentation which allows them access to
    facilities – Warrant???
  – Contact FAS SPA, RMAS and OSP immediately
  – Understand Scope and Timing of Work


           Preferred Travel Providers

• Domestic Air Travel               • Car Rental Agencies
   – USAirways – Boston/New            – Hertz
     York/Washington DC shuttles
                                       – Avis
                                       – Enterprise
• Travel Agencies
   –   Expedia Corporate Travel     • Car/Sedan Services
   –   BCD/Harvard Travel
                                       – PlanetTran
   –   The Travel Collaborative
                                       – Boston Coach
   –   Oriental Tours and Travel
                                       – Custom Transportation
   –   HT&T Travel
   –   Great International Travel
                                    • Preferred Hotels
                                       – See http://vpf-
• Domestic Train Travel        
   – Amtrak – Boston/New                 ity/exc_hot.shtml
     York/Washington DC shuttles
      FAS Resources

• The FAS Financial Office website has many
  resources –
    – FAS Spending Guidelines
    – University’s Partner Hotels
    – Average Corporate Lodging Rates for top 100
      domestic and international cities
    – FAS Exception Request Form & Procedures
    – Exception approval guidelines
    – FAQ’s on spending guidelines and exception
         Travel & Reimbursement Office

• The Travel and Reimbursement Office website has
  many resources –
     – Exclusive Harvard negotiated rates
           •   Airlines
           •   Hotels
           •   Car Rentals
     – Travel Policy Manual (be careful: still being updated)
     – GE Corporate Card Application
     – Per diem, mileage reimbursement and exchange rates
     – Information on Harvard’s travel agencies, including the
       Harvard-Expedia corporate travel website
     – Reimbursement policy information

      Government Resources

US General Service Administration Website shows
$$ amount to reduce per diem based on M&IE rate
for conference city. Go to:
 Travel>Resources>Per Diem Rates>M&IE Breakdown
     Rule of thumb:   Breakfast – 18%
                      Lunch – 28%
                      Dinner – 48%
                      Incidentals – 6%

         More Resources

• The FAS Administrative Systems Assistance Program (ASAP) can
  provide training, staff refreshers, and backup transaction
   – E-mail:
   – Phone: 6-7136
• University policy documents can be found at http://vpf-
• Check the Office of Sponsored Programs for the OSP Travel
• Feel free to contact Michael Jackson: 5-1526 or & Carolyn MacLeod: 6-3053 or with questions/concerns
• Feel free to contact the Travel and Reimbursement Office – 5-
  7760 – with questions or concerns

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