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Key Compliance Matters
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The IRS and Federal regulations require certain standards to be met when documenting, recording and submitting reimbursable expenses. These include:
- Submitting expenses for reimbursement within a reasonable time limit
- Documenting the specific business purpose of an expense
- Providing receipts and proof of payment
- Segregating unallowable or excessive expenses
Reimbursement Submission Time Limit
The IRS requires travel expense reimbursements to be reported within a reasonable period of time. The determination of a reasonable period of time will depend upon the facts and circumstances, but is generally held to be no later than 120 days after the date of the expense. In addition, in order to adhere to generally accepted accounting principles, the traveler should be mindful of the University’s June 30th fiscal year end, and all expenses for that year should be reported prior to year end to ensure that the expense is appropriately captured in the financial statements and in the department’s budget for the appropriate fiscal period. Expense reimbursements should be submitted to the department within 10 business days after return from the trip. Reimbursement requests must be submitted no later than 120 days after the date of the expense, or the end of the fiscal year whichever is sooner. Late submissions may only be reimbursed with the approval of the department. Reimbursements submitted more than 120 days after the date of the expense or at the end of the fiscal year (whichever is sooner) require Supplemental Approval. Please note that supporting documentation must be provided in order to describe the circumstances leading to the late submission in order to evaluate whether this is a taxable event. If the circumstances described would not have prevented the traveler from submitting within the proper timeframe, they are considered taxable income to the traveler. Expense reimbursements submitted after one year require an exception request and are always considered taxable income to the traveler and will be reported on their annual Form W-2.
Business Purpose
All expenses must be for a valid business purpose that is necessary and reasonable in order to conduct University business. A business purpose must be documented for all expenditures for which a traveler is requesting reimbursement.
Business purpose must be specific. “Travel to
Receipts
The traveler is expected to obtain original receipts for all expenses for which they plan to have reimbursed. An original receipt may take many forms (i.e. cash register receipt, copy of an order form, web receipt or confirmation). A receipt must identify:
- the date of purchase
- the vendor name
- itemized list and unit price of the purchased items
- the total amount
If the traveler is unable to obtain an original receipt that contains all the required information, documentation should be submitted to demonstrate as many of the required items as possible. A copy of the traveler’s credit or debit card statement identifying the date, location and amount of the expense, or a rental agreement, may be submitted along with a description of the purchase, identifying the amount of any expenses to be segregated (i.e. alcohol).
Complete documentation must be received for all expenses of $75 or more ($25 for meals) and all lodging. If documentation of an expense of $75 or more ($25 for meals) and all lodging is not available, the traveler may submit a written description of the item purchased, noting the date, the location, and the amount. For convenience, Accounts Payable has provided a "missing receipt" worksheet that may be completed. Any request for reimbursement documented in this way requires Supplemental Approval.
A receipt in a foreign language is considered acceptable documentation, with the US Dollar conversion amount noted on the receipt (if currency conversion worksheet is not used). Responsibility lies with the department to certify that it is an appropriate business expenditure and that the conversion rate is appropriate and to document the business purpose.
Proof of Payment
The traveler is expected to obtain proof of payment for all expenses for which they plan to have reimbursed. Proof of payment may take many forms but must demonstrate that payment was tendered and must identify the means by which payment was tendered by the traveler. This is often part of the original receipt. Examples of this may include notation of:
- “Cash Tendered”
- “Paid”
- A zero balance due
- Debit/Credit card payment (card type, last four digits of card and/or signature)
If no proof of payment is available in this form, a debit or credit card statement may also be provided. Please black out any private or unrelated information.
Segregated Costs
The Federal Government will not reimburse certain expenses, termed “unallowables” and has set forth guidelines prohibiting these costs from being charged to Federal grants and contracts, either directly or indirectly. These include expenditures for alcohol, entertainment, flowers or gifts or excessive costs, such as first or business class travel and lodging or meals over the designated University thresholds. To make sure that the University does not inadvertently charge any of these expenses to grants and contracts, “unallowable” expenses have been assigned a special series of (8500) subcodes. For non-grant accounts “unallowables” are segregated to an 8500 series subcode and for grant accounts “unallowables” are segregated to a non-grant account
The terms “unallowable” or “segregated” do not mean that the expenses are not reimbursable rather that they must be charged to a series 8500 account subcode.
Please refer to the following documents for additional guidance:
Policy Statement 92-1 (http://www.columbia.edu/cu/controller/pdf/policy92_1.pdf)
Policy Statement 92-4 (http://www.columbia.edu/cu/controller/pdf/policy_924.pdf)
