Carolyn Ainslie, vice president for finance and treasurer
Jason Knoch, executive director of financial services and strategic initiatives, email@example.com or (609) 258-9181
I. Policy StatementBACK TO TOP
Business expenses may be reimbursed if an individual paid the expense from personal funds. However, the University prefers that business expenses are paid directly by the purchaser through other appropriate University buying and paying methods.
This policy establishes the three components required for reimbursement of allowable noncompensation business expenses:
- An allowable business expense
- Substantiation of the expense with receipts and expense report
- Approval of the expense
II. Who is Affected by this PolicyBACK TO TOP
This policy affects all employees, students, independent contractors, and guests seeking reimbursement for necessary and reasonable noncompensation business expenses. Every individual who reviews, approves, or records financial transactions on behalf of the University.
An expense that is suitable or fitting for a particular valid business purpose.
A necessary, reasonable, and appropriate expense incurred for the primary benefit of University business and therefore permitted to be reimbursed or directly charged based on the permission of the University or by the terms of federally or privately sponsored agreements.
Generally Accepted Accounting Principles (GAAP)
Fundamental principles of accounting that are used as guidance in the preparation of the University financial statements.
Minimum purchase or service required to achieve a particular business objective.
Written or typed information that is required on the receipt, expense reimbursement form, or other document.
The original merchant receipt or invoice issued by the supplier or service provider to document and substantiates the business transaction. When the original receipt is not available or does not contain adequate information, a cancelled check, credit card receipt, supplier statement, or a paid notice will be accepted.
An expense that is ordinary and reflects a prudent decision to incur the expense on behalf of University business. Not extreme or excessive.
Written documentation to support an incurred business expense that includes the original receipt, documentation of business purpose, names of persons in attendance, and appropriate expense report or voucher for the incurred cost.
IV. PolicyBACK TO TOP
ALLOWABLE BUSINESS AND TRAVEL EXPENSES
Please consult the Business Expense Policy and the Travel Policy to determine whether a particular expense is an allowable expense charged against University or sponsored funds. Allowable business expenses may be reimbursed if an individual paid the expense from personal funds. However, the University prefers that business expenses are paid directly by using other appropriate University buying and paying methods.
SUBSTANTIATION AND ORIGINAL RECEIPTS
In order for a business expense to be approved and reimbursed, it must be properly substantiated by a set of written documents including the appropriate expense voucher. Original receipts for all expenditures greater than or equal to $50 are required. If sponsor or departmental requirements are more restrictive, the more restrictive receipt requirement will take precedence. Please see the relevant policy for a specific business expense for receipt and substantiation requirements: Business Expense Policy, Departmental Credit Card Policy, or Travel Policy.
BUSINESS TRAVEL EXPENSE REPORT and EMPLOYEE VOUCHER
All requests for reimbursement for travel expenses must be submitted on the Business Travel Expense Report. All requests for reimbursement of other business expenses must be submitted on the Employee Voucher or Student Voucher. The completed form must be submitted with appropriate substantiation documents attached. Please see the “Substantiation and Original Receipts” sections of the Business Expense Policy, Departmental Credit Card Policy, and Travel Policy.
Reimbursement as a nontaxable payment can be made as long as the expense:
- qualifies as an allowable business expense according to the Business Expense Policy or Travel Policy; and
- all substantiation and receipt requirements are met.
The sections below establish University policy for reimbursement based on proper substantiation of the business expense, timely request for reimbursement, and payment approval.
PAYMENT APPROVAL AND REIMBURSEMENT
For each business expense reimbursement being requested, the valid business purpose of the expense must be stated, and two signatures will be needed: the individual who has incurred the expense and is requesting the reimbursement and the Department or Office Head approving the expense.
- When the individual requesting reimbursement is a Departmental Chairman or Program Head, the second signature will be that of the Dean of the Faculty (9 Nassau Hall).
- When the individual requesting reimbursement is the head of an administrative office, the second signature will be that of the appropriate Vice President or Senior Dean.
- When the individual requesting reimbursement is a Vice President or Senior Dean, the second signature will be that of the Executive Vice President (320 Nassau Hall) or Vice President for Finance and Treasurer (701 Carnegie Center, Suite 431).
- The authorization for the second signature (approval) may be delegated in writing to an individual in a management position. Such delegations must be approved by the Vice President for Finance and Treasurer on an annual basis. When neither the Department Chair, nor Office Head, nor the individual’s supervisor, is available, the second signature will be that of the appropriate Vice President or Senior Dean.
- When original receipts are required, they must be submitted along with the completed Business Travel Expense Report. Please see the “Substantiation and Original Receipts” section of the Business Expense Policy, Departmental Credit Card Policy, and Travel Policy.
- Under no circumstance may a person authorize reimbursement, or payment of any type, to a family member. Family should be interpreted in the broadest sense and includes blood, marital and other significant relationships.
DEADLINE TO SUBMIT EXPENSE REPORT AND DOCUMENTATION –
Expense Reimbursement Deadlines
To be reimbursable, business expenses must be properly substantiated and submitted within certain time limitations. These time limitations determine both whether the cost may be reimbursed by the University as a business expense, and whether that reimbursement will be treated as taxable income to the individual.
The University has adopted an "accountable plan," which allows it to reimburse properly substantiated business expenses without including the reimbursement in the taxable income of the individual incurring the expense. "Accountable plan" standards established by the Internal Revenue Service (“IRS”) require that the expense must be an "ordinary and necessary expense" of operating a business, must be substantiated in writing within a “reasonable time” of the incurrence of the expense, and that all unsubstantiated amounts advanced must be returned within a “reasonable time.”
In order that expenses are recorded on a timely basis, the University encourages that reimbursable business expenses be substantiated in writing within 10 working days after the expense is paid or after returning from travel.
In order to comply with IRS requirements, the University has adopted the IRS standards for establishing reasonable time limitations for determining the tax treatment of reimbursements, as follows:
- If written substantiation for the reimbursement is submitted within 60 calendar days of when the expenses were incurred or after returning from travel, and if all other requirements of the University’s Business Expense Policy are met, the reimbursement will be treated as a nontaxable reimbursement of a University business expense.
- If written substantiation occurs more than 60 calendar days after the expenses were incurred or after returning from travel, the expense reimbursement request must be sent to the Dean of the Faculty (for faculty members) or to the Vice President for Finance and Treasurer (for all nonfaculty). The request should include an explanation for the delay. At the discretion of the Dean of the Faculty or Vice President for Finance and Treasurer, reimbursement requests beyond the 60-day limit may be approved. In all such cases, the reimbursement must be reported to the IRS as taxable income paid to the individual.
The following guidelines appear in Treasury Regulation Section 1.62-2(g) to establish what will be considered a "reasonable time" period for purposes of the following:
- Advance Payments – Funds can be advanced up to 30 days before reasonably anticipated expenses are paid or incurred.
- Written Substantiation – Must be submitted within 60 days of when expenses are paid or incurred.
- Return of Excess Amounts – within 120 days after expenses are paid or incurred.*
*Note: Unsubstantiated advances, i.e., “excess amounts,” not returned to the University within 120 calendar days of when paid will be deducted from the individual’s pay. Notification will be sent to the employee at least two weeks in advance of the deduction. In extenuating circumstances, with the approval of the Dean of the Faculty or the appropriate Cabinet-level officer, the advance may be retained by the employee. In such cases, the advance must be reported to the IRS as taxable income to the individual.
V. Procedures BACK TO TOP
VI. Forms BACK TO TOP
VII. Contact Roles and Responsibilities BACK TO TOP
VIII. Update Log BACK TO TOP
No change to policy or substance; revised organization and language for web-based policy library. “Expense Guidelines” document was separated into four policies: Business Expense Policy, Credit Card Policy, Travel Policy, and Reimbursement Policy.
For expenses related to business meeting meals, a detailed business purpose for the meal is required along with proper documentation of attendees.