There are certain fundamental elements that should be included in a travel and conference policy. The following list details the fundamentals that you should consider when developing or updating your policy. This list is not exhaustive and other elements, pertinent to your operations, may be included as you deem appropriate:
- Descriptions of the pre-approval process that employees must follow to obtain authorization to attend conferences and training and to incur other travel expenses for which prior approval is required.
- A listing of travel expenses typically reimbursable such as hotel room charges, mileage allowances, taxi and rental car expenses, and expenses for meals or a per diem meal allowance. Also, a listing of expenses not reimbursable such as charges for in-room movies, alcoholic beverages and other types of non-reimbursable expenses.2
- Guidelines for when day trips versus overnight trips are appropriate and descriptions of what types of travel expenses are typically reimbursable for each type of trip. These guidelines should also include the minimum distance employees must travel away from home (or the work site) in order to be eligible for overnight expenses. For example, some governments do not pay for overnight expenses unless the employee is traveling at least 35 miles from their home or work site.
- General maximum reimbursement rates for various types of travel expenses, including a maximum rate for lodging and meals and, where appropriate, the conditions under which exceptions to these maximums will be granted.
- Mileage reimbursement rates for employee use of personal vehicles while on official business, including a requirement that employees document the date and time they left their home (or work site) and the date and time they returned.
- Required documentation (including original receipts) to be submitted to support travel expenses and the timetable for submission of this documentation.
- An explanation that employees may be personally responsible for improper costs incurred and an explanation of how these costs will be recovered, if necessary.
- Descriptions of the process that employees must follow to be reimbursed for allowable travel expenses, including providing easy-to-use standardized forms and instructions.
- A statement communicating to employees that their travel expenses are paid for with public funds and they should exercise due care while incurring travel expenses.
- Procedures to be followed by the auditing body (or auditing official) when examining travel claims, including steps to be followed when certain reimbursement claims are disallowed.
Federal Lodging, Meal and Mileage Rates
An effective and easy way to ensure that travel and conference expenses stay within reasonable limits is to adopt the federal lodging, meal and mileage guidelines as your general maximum travel rates.
The United States General Services Administration (GSA) publishes rates for lodging and meals that federal officers and employees cannot exceed. These rates vary by state and region (i.e., New York City hotel and meal rates are higher than Binghamton rates). Most major hotel chains set aside rooms at the federal rate. To obtain these rates, travelers should ask for the "government rate" when making hotel reservations. Federal rates are readily available at the GSA website www.gsa.gov/travel/plan-book/per-diem-rates and are usually updated at least once a year.
By adopting federal lodging and meal rates as the general maximum amounts allowable, you can minimize the possibility of travel expense abuse. It is possible that lodging and meals may be available below the federal rate in certain localities, but you can usually feel confident that travelers are not incurring extravagant travel expenses if they adhere to federal rates for lodging and meals.
The Internal Revenue Service (IRS) establishes reimbursement rates for miles traveled by employees while using their personal vehicles for business reasons. Like the GSA rates, this rate can be used as a general guide in establishing your mileage allowance rate. The current mileage reimbursement rate can be found on the IRS website at www.irs.gov by searching for "mileage rates." A mileage rate is used in lieu of the payment of actual and necessary expenses (such as gas, oil and wear and tear on the vehicle) associated with the use of a personal vehicle for official travel. Therefore, you should not reimburse a traveler for gas purchased for their personal vehicle if you are reimbursing them using a mileage rate. The IRS mileage rate is periodically updated based on the overall cost of automobile transportation. By linking the mileage rate in your policy to the IRS rate, you can avoid amending your policy each time the IRS rate is updated.
It is important not to exceed the IRS mileage rate because any reimbursement above this rate may be considered taxable income for the employee. Inquiries about the taxability of mileage reimbursements should be addressed to the IRS. Also, paying a rate above the IRS mileage rate may not be a prudent use of public funds. An effective and easy way to ensure that travel and conference expenses stay within reasonable limits is to adopt the federal lodging, meal and mileage guidelines as your general maximum travel rates.
Meal Per Diems Versus Actual Expenses
General Municipal Law3 authorizes the governing board to provide for a meal allowance instead of paying for actual and necessary meal expenses for employees who are traveling on official business. When determining these allowances, the governing board must consider the prevailing cost of meals in the areas in which travel will occur. The maximum allowance adopted by the board may not, however, exceed the standard meal allowance for business travel prescribed for federal income tax purposes. As mentioned previously, the maximum federal allowance for different localities is established and periodically updated by GSA.
The governing board may adopt either reimbursement method discussed below:
- Actual and necessary expenses method — The employee provides receipts for allowable meals during travel and is reimbursed the actual amount necessarily incurred. The board may establish a general maximum daily rate for actual and necessary meal expenses.
- For example, an employee spends one night in a hotel and is eligible for one dinner, breakfast and lunch. The employee submits receipts for $24.50 for dinner, $8 for breakfast and $10 for lunch for a total of $42.50. The governing board has established the maximum daily rate at the GSA meal per diem (daily rate) for the location, which is $55 per day. Under the actual expense method, the employee would be reimbursed for the actual expenses of $42.50.
- Per diem allowance method — This method does not require the employee to produce receipts for their meals. You pay the employee the meal per diem allowance that is specified in your travel policy regardless of what the employee actually spent on his or her meals. Your allowance may not, however, exceed the standard meal allowance for business related travel prescribed for federal income tax purposes.
- For example, an employee spends one night in a hotel for training and is eligible for one dinner, breakfast and lunch in an area with a maximum per diem meal allowance of $55. The employee is not required to submit meal receipts and spends $75. The employee should be reimbursed the per diem allowance of $55.
Exceptions to Maximum Rates
Occasionally, exceptions to maximum lodging and meal rates should be allowed to accommodate special circumstances. Your policy should include instructions on how employees can obtain approval for exceeding general maximum rates. These circumstances commonly occur when:
- The hotel where a conference is held charges a lodging rate higher than the maximum rate. It may be in the best interest of the local government or school district to allow the traveler to stay at the higher rate rather than incur transportation costs to and from the conference site.
- Lodging is unavailable at or below the maximum rate or lodging cannot be found reasonably close to the traveler’s destination. This may occur during peak vacation periods in tourist areas or in other heavily traveled areas.
- Meals are included as part of the hotel/conference fee and you cannot separate the cost from the hotel/ conference price.
- Special needs of specific travelers may necessitate increased expenses, i.e., special dietary restrictions, health concerns or handicapped access.
Any exception to the maximum travel rates should be approved before the expense is incurred. Ideally, this should occur when travel is initially approved by the governing board.
2 Costs incurred in commuting from home to the usual place of work generally are considered private expenses and, therefore, not reimbursable. This includes travel by elected board members to and from meetings of the board, except for county governing boards. County Law section 203 (2) (b) provides that county governing boards may authorize the payment of a reasonable mileage allowance for miles actually traveled on official business of the county, including travel on official business of the county in going from and returning to a private residence.