Proposed Business Expense and Travel Reimbursement Policy Updates - April 2019
Business Expense and Travel Reimbursement Policy updates aimed at ensuring compliance with IRS rules, benchmarking with peers, addressing preferred purchasing methods, and enhancing communications and training. Key stakeholders and core team members involved in the project are listed.
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Proposed Lean Travel & Conference Policy Updates Renamed: Business Expense and Travel Reimbursement Policy April 2019
PROJECT CHARTER Problems being addressed: UR Travel Policy is Not clear enough to ensure compliance with IRS Not aligned with peers Outdated Use Lean to (our Reason for Action): 1) Ensure compliance with current IRS Accountable Plan Rules 2) Benchmark/Align with peers 3) Address preferred purchasing methods 4) Enhance communications and training 2
KEY STAKEHOLDERS Project Sponsor: Elizabeth A Milavec, AVP Financial Operations & Controller Project Manager: Marta Herman, Accounts Payable Manager Caroline Burnicki, Sr Director for Tax Compliance Gunta Liders, AVP for Research and Project Admin Alan Ryon, Manager for International Travel and Security Scott Lawlor, Audit Supervisor Kathy King-Griswold, Associate Treasurer & Director of Treasury Operations & Compliance Luis Perez, Sr Purchasing Manager Erin Johnson, Travel Accountant Cheryl Bennett (10) Roger Smith (20, 21, 22) Brian Donovan (23) Tracy Korts (24) Michele Gibson/Jen Horn (30) Bill Passalacqua (40) Carrie Fuller-Spencer (50) Kelly Talarczyk (60) Sheryl Burgstrom (70) Kathy Strojny (90) Jill Hetterich (91) Ed Reif (92) 3
CORE TEAM Division Department 10 Advancement 10 Advancement 10 Institutional Resources Tammy Lancy 10 Institutional Resources Andrea Saunders 10 President's Office 20 Enrollment 20 Resident Life 21 Chemistry 21 Deans Office Earth & Environmental Sciences 22 Deans Office 22 Laser Lab Name Ryan Balys Christine Nyman Division Department 40 Pharmacology/ Physiology Francine Summermatter 40 / 91 Medicine 40 SMD Deans Office 50 / 91 Neurology 50 Neurology 60 SON 70 MAG Administration 90 HSD/MC Finance 90 ISD 91 URMFG Administration 92 EIOH Finance Global Engagement ORPA Purchasing Purchasing Risk Management Name Mark Richards Donna Galloway Sara Uschold/ Alanna Orr Charlie Levin Kyle Dembrow Patti Walker Sandy Torrell MaryAnn Capuano Lisa Clarke Mike Winter Michelle Bopp-Smith Anthony Beckman Brian Bowdish Nathan Hodge Mary Goldenberg Jen Faler Emmorie Anschutz Fazeelah Chappell Anna Kuitems JC Stevens 21 Melissa Napolitano Tim Woodward Sarah Zawodzkinski 22 23 24 30 Optics Simon Warner Finance ESM Administration Adrienne Snopkowski Joe Kreel Christine Ferreri Jen Horn Overall attendance 80%! 4
IRS COMPLIANCE KEYS 1) Timeliness of expense submissions 60 days = IRS reasonable amount of time 2) Expense documentation details including business purpose explanations Most room for improvement needed on the why = business connection for incurring the expense 3) Fly America Act: US air carrier for federally funded activities Exceptions should be documented properly 5
BENCHMARKING Cornell Per diem Documentation requirements Columbia Supplemental approval Documentation requirements Brown University Business Purpose Policy Missing Receipt Form Stanford Reasonableness Per diem NYU Fly America Per diem Documentation requirements Per Diem Johns Hopkins Northwestern Missing Receipt Form Harvard Yale 6
SURVEY RESULTS 700 responses 4% 5% 16% 15% 35% 20% 80% 25% Traveler Preparer/Reviewer Approver Non-SMD Schools SMD Central Administration Medical ESM/MAG 25%: I am not familiar with UR s travel policy 57%: Not in favor of per diem However, per diem: Complies with IRS Better and necessary for some specialty travel Is Lean Aligns with peers 7
SURVEY RESULTS 80% would prefer to keep or lower the dollar threshold for receipts However, raising the threshold to $50 is lower than the IRS threshold better for maintaining compliance lean aligns better with some peers 82% in favor of 60 days or less for submitting expenses 60 days aligns with the IRS and benchmarks: Brown, NYU, Vanderbilt Is better than a lower # of days for maintaining compliance 30 days: Cornell and Northwestern 10 days: Yale, Stanford, Duke, Emory, Columbia Training: In-person classroom preferred over MyPath 8
PROJECT TIMELINE Key Stakeholder Updates Recommendations to Key Stakeholders Project kickoff Key Stakeholder Updates Implementation Phase 2019 2018 3Q2018 May 2018 2Q2019 4Q2018 1Q2019 Training Core Team Meetings New Policy Effective Publish Updated Policy Core Team Finalize Recommendations 9
BUDGET/SPEND TRENDS Average reimbursement has only grown 1.4% over the last 4 years However volume of reimbursements has grown 10% and reimbursement dollars 11.5% Calendar Year Reimbursements Percentage Change Reimbursement Dollars Percentage Average Reimbursement Percentage Change Change 2015 2016 2017 2018 Average 30,000 33,567 36,082 39,929 $ 20,641,589.85 11.9% $ 23,505,886.37 7.5% $ 26,149,618.74 10.7% $ 28,589,051.46 10.0% $688.05 $700.27 $724.73 $716.00 13.9% 11.2% 9.3% 11.5% 1.8% 3.5% -1.2% 1.4% 10
DATA ANALYSIS TO BE UPDATED BASED ON FY2019 RESULTS Calendar Year 2017 (in thousands) Non- Grant Grant Total Goals Reduce by 50% (to less than $1m annually) Reduce by 75% (to less than $2m annually) Reduce by 50% (to less than $1m annually) F4-eligible $139 $1,265 $1,404 Pcard-eligible Other preferred purchasing method Traditional travel spend $3,539 $13,126 Total **Non-grant annual growth should be limited to the same percentage designated for overall budgetary changes **Grant annual growth should match funding %age changes $280 $6,127 $6,407 $309 $1,438 $1,747 $16,665 $26,223 ** $4,267 $21,956 Year 1 net impact is an increase to expense due to UR and grant growth while policy and related initiatives are rolling out Thereafter, direct impact from strategic sourcing and F2 usage drive savings Year 1 $ 19,165 $ (7,157) $ (55,479) Year 2 Year 3 11
KEY UPDATES Divisions/Departments may chose to publish more strict/detailed policies and procedures These policies are monitored for compliance within those areas, not by Accounts Payable You must adhere to the more strict policy Timeliness F3 or F34 expense report must be submitted to the Department for review and approval within 60 days from the date of event, return from trip, or date of expenditure if no event or trip involved. 12
KEY UPDATES Overview Buying & Paying Guide No sales tax reimbursement for capital purchases on F3 Responsibilities as an initiator or someone incurring expenses as well as approver Reasonableness Reimbursement via cash from cashiering window Eliminated for employees Capped at $50 for students 13
KEY UPDATES Documentation Business Purpose emphasized and clarified Original receipts: electronic/scanned are ok Employees and departments should take necessary precautions and implement procedures to ensure the same expense is not submitted multiple times. Receipt Threshold: $50 If expense item is under $50, employee is still required to provide the name of the vendor, location, date, dollar amount of the expense, and a description If expense item is $50+ and no receipt available, Missing Receipt Form is required 14
KEY UPDATES Documentation International Travel Faculty, Staff, and Students that are traveling abroad on UR sponsored or supported activity are required to register their trip with the Office for Global Engagement. Fly America Act Fly America Exception Form 15
KEY UPDATES Per Diem Meals & Incidentals Lodging: Only for international travel Use of federal per diem rates and guidelines GSA.gov/Perdiem Allowance for first/last day of trip How to adjust per diem reimbursement when a meal was hosted 16
KEY UPDATES Travel arrangements Benefits of travel agent/F2 process highlighted Information/Clarifications provided for travel accident insurance and car rental insurance Mileage FAQ-type clarifications provided with examples including diagrams New form: Mileage Log 17
FORM UPDATES Major Updates: F3 Employee Business Expense Report F34 Student Business Expense Report Redesigned to start transitioning towards Workday entry of expense reports Identify expense type then fill in details/explanations for each item Space provided for each expense item to detail and explain Minor Updates: F2 Request for Advance Air Reservation AMEX Corporate Card Application (fillable) 18
ONGOING MONITORING FOR SUCCESS Annual Policy review Survey to get policy feedback Track form usage AMEX applications, F2 usage, etc. Track per diem usage Measure timeliness change (improvement) Measure payment type volumes Direct deposit vs check vs cashiering location Cash advances 19
COMMUNICATIONS Training Meetings FAQs Website News Survey Email 20
TRAINING Ongoing: Both Available In Person My Path Annual updates will be incorporated into training materials Track frequently asked questions OUA observations Results from monitoring activities/metrics Results from survey responses 21
SPINOFF PROJECTS Other policies in development or review: Moving/Relocation Policy Taxable Payments to Individuals Sales Tax Policy Card solutions being considered for alternative/preferred payment methods: Research Subject Card solution(s) Event Card solution Travel card solution (students travelling with employees) Cash advance/disbursement analysis University-pay advance reservations for hotels (room charge and hotel taxes only) 22
