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FastFactsFeature Presentation

December 17, 2013

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© 2013 The Johns Hopkins University. All rights reserved.

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Today’s TopicWe’ll be taking a look at…

Travel and Business Expense Policies and Procedures

Revision Highlights

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Today’s Presenters

Debbie Hawkes, supervisor for the Travel Unit Accounts Payable Shared ServicesEileen Karczmarek, Specialist Accounts Payable Shared Services Dee Church, Senior Accountant JHU Tax Office

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Session Segments

PresentationDebbie, Eileen and Dee will discuss travel and business expense policy changes and highlight accountable plan rules.During their presentation, your phone will be muted.

Q&AAfter the presentation, we’ll hold a Q&A session. We’ll open up the phone lines, and you’ll be able to ask questions. Debbie, Eileen and Dee will answer as many of your questions as time allows.

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Contact Us

If you would like to submit a question during the presentation or if you’re having technical difficulties, you can email us at: fastfacts@jhu.eduYou can also send us an instant message!

GoogleTalk – HopkinsFastFacts@gmail.comAOL Instant Messenger – HopkinsFastFactsMSN – FastFacts@jhu.edu

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Survey

SurveyAt the end of this FastFacts session, we’ll ask you to complete a short survey. Your honest comments will help us to enhance and improve future FastFacts sessions.

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Travel and Business Expense Policies and Procedures

Revision Highlights

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Agenda

Today we will…Highlight improvements – index, etc.Discuss the accountable plan rulesReview IRS documentation requirementsDiscover what the receipt requirements are for business and

travel expense reimbursementsList unallowable travel and business expenses

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General University Travel Policies

Minimum cost for achieving success

Transportation – lowest convenient fares

First class air travelnot permitted in accordance with federal regulationsOther funds – require prior approval (use First Class and Business Class Air Travel Justification and Approval Form – Form B-37

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Accounts Payable Objectives of Revisions

Federal Travel Regulation Requirements

IRS documentation requirements for travel and business expense reimbursements

IRS Accountable Plan Rules

OMB Circular A-21

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Improvements

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Overview of Expense Reimbursement Rules

The university reimburses employees for business related expenses under an “Accountable Plan”

Expenses are accounted for in a reasonable time

Expenses are properly documented

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Overview of Expense Reimbursement Rules Continued

It is the employee’s responsibility to provide adequate documentation of the business purpose and submit on time.

Both employers and employees benefit when an employee’s business expenses are reimbursed in conformity with an accountable plan.

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• Employee business expenses reimbursed under an accountable plan can be excluded from an employee’s adjusted gross income. • This results in a tax-free reimbursement.• The reimbursement is exempt from federal,

state, and FICA taxes.

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Overview of Expense Reimbursement Rules Continued

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Travel & Business Expense Accounting

SAP TRIP is the official record for all travel expenses; it’s features support the Accountable Plan Rules requirements.

All business expenses for the trip must be included in SAP TRIP, even prepaid expenses.

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IRS Accountable Plan Rules

• Expenses must be accounted for in a reasonable period – travel expenses must be entered in SAP TRIP within 90 days from the end date of the trip.

• For non-travel business expenses – within 90 days from the date the expense was incurred.

• Proper documentation for reimbursement – all requests for reimbursement must have a business purpose regardless of the amount.

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IRS Accountable Plan Rules Continued

Original receipts for expense items $75 and over.

The receipts must be scanned & attached to the expense report.

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Business Expense Documentation Requirements

Documentation of each expense must include:

• Date and amount• Business purpose• Location of the activity• Names of those who attended – if applicable• Business relationship of each person named

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Business Expense Documentation Requirements Continued

Local travel, such as mileage and parking, should be submitted at least monthly, but must be submitted (entered into SAP) within 90 days from the ending date of the trip for the month. Mileage must be broken down by each day of travel and include the origin and destination.

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Receipt Requirements

Hotel – itemized hotel bill with payment method.

Car rental – rental agreement receipt showing payment.

Gas receipts are allowed for car rentals only.

Local personal car usage – mileage as shown in paper or electronic standard highway mileage guides (e.g. map quest)

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Meals/entertainment – credit card receipt or detailed cash register receipt of $75.00 or greater.

Online-transactions – payment method must be indicated.

Missing Receipt Affidavit (MRA) – accepted with two authorized signatures and detailed explanation.

It is not to be used in place of a receipt.

Copies of cancelled checks

Receipt Requirements

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Prepaid Expenses in SAP TRIP Include:

• Business expenses reimbursed in advance

• Business expenses paid directly to a vendor (e.g.travel agency bills the university for airfare)

• Business expenses paid using the executive card

• After 90 days from the end of the trip, any business expenses for the trip not submitted would be reported as prepaid – the reimbursement cannot be paid through Accounts Payable.

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PD by in the expense type description indicates the expense has been prepaid.

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Non-Reimbursable Expenses

Airline club membership duesAirfare purchases with points.Cell phones, smart phones, or similar devices and any accessoriesCommuting expenses (to and from work)Health insuranceHome internet accessPersonal items purchased while traveling including toiletries, magazines, books, newspapers, etc.

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Reimbursement for Purchases

Purchases should be made under the university’s purchasing policies and procedures so the purchases are paid directly by the university and not reimbursed.

For purchases of goods made on behalf of the university, the amount cannot exceed $2,500.00 and the reimbursement will not include any sales tax paid since the university is exempt from sales tax on purchases.

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Reimbursement of Purchases

Faculty, staff and students cannot make purchases of services on behalf of the university.

For example, if a person pays for catering, lecture fees, honorarium or other services, these expenses cannot be submitted for reimbursement.

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Federal Travel Regulations

Prior approvalNo expenses for alcoholFly America Act

Federal Travel Regulations require that U.S. carriers be used for travel that is to be reimbursed through federal grants and contracts.

*The Fly America Act Waiver Checklist is required for all travel outside the US on a non-American flag carrier airline regardless of the funding source.

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Foreign Travel & Domestic Travel

Foreign - travel expenses are reimbursed based on either actual expenses or per diem unless the sponsored funding sources requires use of per diem rates.

Domestic expenses are reimbursed based on actual expenses incurred unless the sponsored funding source requires the use of per diems.

For lodging, only actual lodging (hotel) expenses are reimbursed.

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Per Diem

When meals and incidental per diem is used, the first and last calendar day of travel is calculated at 75%.

The US General Services Admin. website M&IE breakdown page has a row showing the calculated amount for the first and last day of travel.

M&IE rates include gratuities/tipsPer diem rates must be used for the entire trip, not selected days. Refer to OMB Circular A-21Per diem cannot be used for travel that is less than 12 hours in duration.

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Key Topics to Review

DefinitionsIRS Accountable Plan RulesUse of Per Diems for Travel ExpensesReimbursement for Purchases

Local TravelTaxable PaymentsNon-reimbursable ExpensesDiscretionary Funds

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Foreign Travel Cross Reference

USE OF PER DIEM – AP-TRV-PL-03

CURRENCY CONVERSION – AP-TRV-PL-06

FLY AMERICA ACT – AP-TRV-PL-09

OTHER EXPENSES – AP-TRV-PL-14

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Summary

Timely substantiation of the business purpose with adequate documentation of expense – entered into SAP within 90 days

Full reporting of all travel expenses in SAP TRIP including all “prepaid” expenses

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Federal Regulations

A-21OMB Circular A-21: Cost Principles for Educational Institutions

http://www.whitehouse.gov/omb/circulars_default/

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Government Resources

Federal Travel Regulationshttp://www.gsa.gov/portal/content/104790

U.S. Department of StateForeign per diem ratesTravel warnings

http://www.state.gov/

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General University Travel Policies

Personal expenses not reimbursableReceipts must be scanned & submitted for expenses greater than $75.00Proof of payment required

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AlcoholUnallowable under Federal regulations

Reimbursable with appropriate documentation

G/L 642001 must be used for alcohol expense

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Types of Travel

Local travel (no overnight stay)Domestic travelForeign travelNon-employee travel expense

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Local Travel (no overnight stay)

Use petty cash or travel expense reimbursement Mileage rate (University Finance Website)

Amount is set by IRSCovers all automobile expenses

Gas/oilMaintenanceCar insurance

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Foreign Travel Resources

Travel registryExport controlsPer diem rateshttp://aoprals.state.gov/CONTENT.ASP?CONTENT_ID=184&MENU_ID=78

Exchange rates www.oanda.com

JHU International Travel Clinichttp://ssc.jhmi.edu/supplychain/travel/travel_international.html

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Payment Methods

1. JP Morgan travel corporate card2. Advance payments

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Objective: Minimize the amount of out-of-pocket expenses incurred by

traveler.

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Advance Payments

Expense Payment Method

Hotel Online Payment Request

Registration Fees Online Payment Request orProcurement Card

Transportation Online Payment Request or Trip Reimbursement

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When will I get my reimbursement?

Requests are processed within 10 business days of receipt.

Accounts Payable cannot give information on when the check will arrive at its destination.

If an employee has direct deposit, it takes three to four business days after the transaction date for the funds to appear in the employee’s account.

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University Policies

JHU Business Travel and Expense Guide

http://finance.jhu.edu/policy_procedures/dept_policy_procedures.html

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General University Travel Policies

May use any travel agencyhttp://ssc.jhmi.edu/supplychain/travel/index.htmlOther JHU Agreements

See Purchasing Hot Newshttp://www.jhu.edu/~purchasing/jhuonly/Hot_News.html

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Resources

Currency conversion rates:http://www.oanda.com

Per diem rates:http://aoprals.state.gov/content.asp?content_id=184&menu_id=78Federal regulations/travel advisories:http://travel.state.gov/travel/cis_pa_tw/tw/tw_1764.html

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We’re going to open the phone lines now!

There will be a slight pause, and then a recorded voice will provide instructions on how to ask questions over this conference call line.

We’ll be answering questions in the order that we receive them.

We’ll also be answering the questions that were emailed to us during the presentation.

If there’s a question that we can’t answer, we’ll do some research after this session, and then email the answer to all participants.

Q&A

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Thank You!

Thank you for participating!We would love to hear from you.

Are there certain topics that you would like us to cover in future FastFacts sessions?Would you like to be a FastFacts presenter?Please email us at: fastfacts@jhu.edu

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Survey

Before we close, please take the time to complete a short survey.Your feedback will help us as we plan future FastFacts sessions.Click this link to access the survey… http://connect.johnshopkins.edu/fastfactssurvey/

Thanks again!