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Poulsbo, WA Administrative Policy/Procedure - Reimbursement/Advance of Business Expenses

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City of Poulsbo, WA
Administrative Policy/Procedure
Title: Reimbursement/Advance of Business Expenses

Department: Finance Department
Effective Date: October 15, 1997
Revised Date: October 15, 1997
Revised By: Bjorkman

PURPOSE

The purpose of this Policy is to identify and provide guidelines regarding the City’s travel policies and to further delineate those valid business expenses for which an employee may qualify for payment or reimbursement.

The objectives of this policy are to provide employees, public officials and others who incur authorized business expenses for travel, subsistence, registration and related expenses while on City business, reasonable and timely mechanisms for the reimbursement and/or the advancement of such necessary expenditures.

It is recognized that business related food and beverage expenses for both travel and non-travel purposes will be incurred by City staff where reimbursement will be provided. This policy statement provides guidelines by which to determine whether expenditures by City employees may be reimbursable to the employee, and by which to determine whether refreshments and related costs served or made available at meetings involving volunteers and other quasi-employees are legitimate City expenditures.

Individuals have the responsibility for becoming knowledgeable about authorized expenditures and the documentation requirements. Care must be taken to avoid unnecessary or excessive expenditures and those not directly and reasonably related to the conduct of City business.

It shall be the responsibility of the Finance Director to adopt, publish and enforce rules and procedures consistent with this policy for the purpose of carrying out the provisions thereof and to provide forms accompanied by instructions for their implementation. To effectively carry out this policy, the Mayor may, from time to time, issue guidelines for the administration thereof.

POLICY

1.0 CITY EMPLOYEES & CITY OFFICIALS

1.1 Documentation

No claim for reimbursement shall be paid unless it is accompanied by a bona fidevendor’s receipt. Should a receipt be lost or not be obtainable, an employee certification signed by his/her Department Head (or Mayor if the employee is a Department Head) will serve as a substitute for a receipt. Such receipt or certification should show the date, a description of the purchase, vendor identification, amount paid, and an explanation for the lack of a receipt should that be the case.

Restaurant meal "stubs" will be accepted as a receipt where a more detailed vendor receipt cannot be reasonably obtained. However, the stub must have the amount completed and initialed by restaurant staff, though the tip can be added by the employee if not included.

Claims for reimbursement shall contain the following:

The name of the person who consumed the goods or used the service for which reimbursement is requested, whether it be for meals, lodging, transportation, or any other purpose.
A description of the event, occasion or circumstances related to the claim and the public policy or public purpose served (a copy of the agenda or flyer).
Required receipts (or certifications where they are allowed).
Requests for reimbursements must be within the budget year the expense took place. No reimbursement requests will be authorized for any expenses taking place in a previous budget year.

The City has implemented travel advance procedures to assist employees who are traveling out of the area on City business. Overnight travel out of the local area must be involved to use the Advance Travel Fund. Please refer to Section 4.0 for the policy and procedures related to the use of Advance Travel.

1.2 Meals:

Meal costs must be incurred directly by the claimant; direct billing to the City by a restaurant is prohibited.

Payment for table service at a restaurant, commonly referred to as a tip, not to exceed 15% (or $1.00 whichever is greater) of the meal price (including sales tax), is reimbursable as a reasonable and necessary cost for such service.

All City employees and officials claiming reimbursement for meals consumed while on City business but not on overnight travel must have required receipts. Reimbursements for meals that do not include an overnight stay do not meet the business connection requirement for IRS and Social Security System, therefore, these reimbursements must be included in the employee’s gross income and are subject to federal income tax withholding. Amounts will be reported to the employee on form W-2.

Employees and officials claiming reimbursement for meals consumed while on City business and on overnight travel must use the "per diem" basis. A "per diem allowance" is a payment that is made for meals and incidental expenses at a rate for the travel locality. "Incidental expense" covers laundry and dry cleaning costs and fees/tips for waiters, baggage handlers, etc. "Locality of travel" means the place to which anemployee goes on business away from home (overnight). A list of localities within the continental U.S. (CONUS) and their maximum per diem rates is published by the Internal Revenue Service (IRS).

1.3 Travel

Reimbursement for reasonable costs of business travel is authorized. The use of a City vehicle rather than a personal car is encouraged. General guidelines are as follows:

City Vehicle:

Out of area costs of vehicle operation are authorized for fuel, oil, tires and necessary repairs.

1.32 Personal Vehicle:

Expenses shall be reimbursed for travel at the current maximum rate allowed by the United States Internal Revenue Service (IRS). The Finance Department will keep all departments informed of any changes to this rate. In determining if air travel would be more appropriate than personal vehicle the costs, should be the lower of (a) the established rate per mile, or (b) the lowest available airfare, plus mileage reimbursement at the then current City rate, based upon the estimated distance between the airport and the destination.

1.33 Air travel:

Arrangement for air travel on City related business shall be made by the individual’s department with necessary paperwork processed through the Purchasing Department.

b. The authorized procurer will arrange for air travel based on the lowest available airfare for a regularly scheduled flight which reasonably accommodates the time of travel requested and the destination as specified by the requesting department. A travel agency may be used.

c. The authorized procurer will process a purchase requisition and a check will be issued to purchase the tickets.

d. If personal travel is combined with business related travel, the traveling employee shall be responsible for paying the increase in airfare necessary to accommodate the personal part of the flight. The City shall only pay the lowest available airfare for the round trip between the Seattle/Tacoma Airport and the business related destination. Such payment for personal travel shall accompany the City’s payment to the vendor for the tickets.

1.4 Other Miscellaneous Travel Expenses:

Miscellaneous travel costs such as bus, shuttle, taxi, bridge or other tolls, parking and ferry are authorized by a listing of same on the reimbursement form. Porter, bellman and the like (not including any maid service) are considered incidental expenses and are part of the "per diem" allowance.

1.5 Accommodations:

Reasonable hotel/motel accommodations for employees and officials are acceptable and will be paid at a maximum of the single room rate. Exceptions may be authorized by the Department Head should a single room rate not be available, but evidence of this should be received from the hotel/motel. A purchase order must be used and direct billing of hotel/motel charges is required. Room rental charges and related taxes can be paid by purchase order, but a purchase order cannot be used to directly pay for any other charge on the hotel bill.

1.6 Incidental Expenses:

This category includes all reasonable and necessary incidental expenses. Those allowed and specifically not allowed are identified as, but not limited to, the following:

Allowable Incidental Expenses:

Personal telephone calls home, if away from home for more than a 48 hour duration, are considered a business expense, but are limited to one call of reasonable duration for each 48 hour period. A "reasonable duration" for this purpose would be five (5) minutes. Costs for longer calls will be paid by the employee with the amount determined on a proportional basis.

Baggage checking and handling are part of incidental expenses and therefore paid out of the "per diem" rate for the locality of travel.

1.62 Non-allowable Incidental Expenses:

Unauthorized expenditures include, but are not limited to:

Liquor
Expenses of a spouse or other persons not authorized to receive reimbursement under this policy
Beauty parlor or barber services
Personal entertainment (movie rentals, etc.)
Theft, loss, or damage to personal property
Damage costs caused by employee/officer actions
Airline or other trip insurance
Personal postage, reading materials, or non-business related telephone calls (except as provided elsewhere in this policy)
Personal toiletry articles

2.0 NON-TRAVEL FOOD & BEVERAGE REIMBURSEMENT POLICY:

2.1 Employee Expense Reimbursements:

Reimbursable employee non-travel expenses are subject to the following:

Meals consumed by the City employee during meetings and other functions which conduct official City business or serve to benefit the City of Poulsbo are reimbursable to the employee. Reimbursements for meals that do not include an overnight stay do not meet the business connection requirement for the IRS and Social Security System, therefore, these reimbursements must be included in the employee’s gross income and are subject to federal income tax withholding. Amounts will be reported to the employee on form W-2.
Generally, the City will not incur costs for refreshments and other related items for meetings or functions held in the normal course of business or that are attended solely by City employees. However, such meetings or functions wherein a municipal function, public purpose, or City program is served or furthered and wherein the Mayor has expressly approved the meeting as such, the City may incur such costs directly or as a reimbursement to employees who have incurred such costs on behalf of the City.
Refreshments purchased solely for personal entertainment are not a legitimate City expense.

2.2 Quasi-Employee Refreshments:

"Quasi-employees" are defined as non-compensated volunteers, advisory committee members, board and commission members and others who are participating in City business but are not on the City’s payroll.

Coffee, utensils and other light refreshments at meetings involving volunteers and other ‘quasi-employees" are authorized City expenditures.
Incidental consumption of refreshments by City employees at meetings involving quasi-employees is allowed.

2.3 Ceremonies and celebrations:

Reasonable expenses, including food and beverage, associated with commemorating a dedication or an unveiling that is recognized as serving a public purpose are legitimate City expenditures.
Private celebrations rather than public celebrations are not generally considered as serving a public purpose. Refreshment, food and beverage related costs would therefore not be recognized as legitimate City expenditures.
Support of a local "event" or celebration may not take the form of a gratuitous contribution of public funds to a private person, committee or organization. Expenditure of public funds on a publicly sponsored event requires (1) the existence of a recognizable public or municipal purpose that relates to the purpose of the City’s existence, (2) proper authorization from the legislative authority for such public sponsorship, and (3) a reasonable relationship between the amount of the City’s expenditure and the "public" nature of the event.

3.0 NON-CITY EMPLOYEES AND NON-CITY OFFICIALS

3.1 Recruiting Costs:

Expenses incurred by non-city employees and officials asked to participate in assessment centers or on interview committees are reimbursable for the following:

b. Meal Costs incurred by the claimant.

c. Miscellaneous travel costs such as bus, shuttle, taxi or other tolls, parking and ferry.

d. Reasonable hotel/motel accommodations paid at a maximum of the single room rate when the testing process is longer than one day or when travel to/from the individual’s residence/workplace is more than one hour.

3.2 Claims for Reimbursement

Claims for reimbursement shall be submitted on a city Claim for Expenses form and contain the following:

b. A description of the event, occasion or circumstances related to the claim.

c. Required receipts (or certification stating receipt was not provided).

Requests for reimbursement must be within the budget year the expense took place. No reimbursement request will be authorized for any expenses taking place in a previous budget year.

4.0 ADVANCED TRAVEL (Authority RCW and Ordinance)

The use of an Advance Travel Fund (Imprest fund) has been authorized by City Ordinance 85-15. State of Washington RCW 42.24.120-160 provides the authority to establish this fund and both this RCW and the State Budgeting, Accounting andReporting System (BARS) Manual defines the policies and general procedures by which it will be administered. The following guidelines are included for the operation of this imprest fund:

4.1 Guidelines for requests

This imprest fund can be used for expenses incurred during the authorized overnight travel of a City employee or officer/official while on City business.
It is to be used solely for travel advances and not for direct payments to vendors. It cannot be used for personal loans, payment of airline tickets, pre-registration fees, reimbursement to employees/officials for travel already incurred, etc.,
A special bank account has been established by the City for the Council authorized cash that will be used to advance employees or officials who will be traveling overnight on City business. A check register will be maintained in the manner established by the State Auditor in BARS and this account will be reconciled monthly.
Requests for Advance Travel funds shall be submitted to the Finance Department’s Advance Travel Custodian on the forms established by the Finance Department. Such forms will contain the information required by the State Auditor. Requests will be based on "per diem" rates for meals and on reasonable estimates for those costs not directly billable to the City.
The Advance Travel request form will be submitted at least five (5) working days prior to departure, together with a copy of the agenda or conference/workshop application as verification of the purpose for the trip. Requests need to be signed by the applicant and have the approving signature of the individual’s Department Head. Meal allowance(s) will not be paid for meals that are included in the registration fee, whether or not the employee partakes of the meal. Continental breakfasts are not considered a meal therefore if a registration includes a continental breakfast the City would reimburse the employee for a regular breakfast. Advances will be based on "Maximum per diem allowances" for the locality to which the individual is traveling. The percentages used to determine partial days for "overnight travel" are as follows:
Air transportation and hotel/motel accommodations will be billed directly to the City by the vendor. Advance Travel monies WILL NOT be available for these expenses.
Advances for travel expenses will be made by the issuance of checks drawn on the Advanced Travel bank account and made payable to the applicant. Original approved requests must be returned to the fund custodian immediately upon receipt of the check, and will be retained in the files of the custodian to support such advances until final settlement is made and claim for reimbursement has been submitted.
Advance Travel request will be approved on a "1st come, 1st served" basis due to the limited funds in this imprest fund.

4.2 Settlement or Reimbursement of Advance Travel Guidelines

Settlement of the Advanced Travel will be made on or before the 10th day following the close of the travel period. Settlement is as follows:
The employee’s department submits a CLAIM VOUCHER, with a copy of the completed ADVANCE TRAVEL REQUEST FORM (reverse side certification completed) as backup, to the Finance Department to reimburse the Advance Travel Fund.
Receipts are required for parking, bridge and ferry tolls. Meals do not require receipts because all overnight travel is based on a per diem rate.
Any default in accounting for, or in repaying a travel advance, shall render the "full unpaid" amount immediately due and payable with interest added at the rate of 10% per annum from the date of default until the advance is repaid. The City shall have a prior lien against, and a right to withhold, any and all funds payable (or to become payable) to such officer or employee to whom such advance has been made.
No advance of any amount may be made to any officer or employee at any time when he/she is delinquent in accounting for or in repaying a prior cash advance.

REVISION CRITERIA

A change in this policy may be initiated in the form of a memorandum to the Finance Director or may also be initiated by the Mayor

Approval of revisions, additions and /or deletions to this policy will be made by the Mayor.

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City of Poulsbo, WA Administrative Policy/Procedure Title: Reimbursement/Advance of Business Expenses

City of Poulsbo, WA
Administrative Policy/Procedure
Title: Reimbursement/Advance of Business Expenses