Brief Description: This policy standardizes the approach to employee travel expenses, and, at the same time, helps employees to comply with the spirit of the Internal Revenue Code.
Responsible Department: Accounting Services.
Date of Last Revision: January 03, 2022
BUSINESS MEALS AND LODGING:
Reimbursement for the cost of meals and lodging while away from home on business is limited to amounts that are not lavish or extravagant under the circumstances (Code Sec. 162(a)(2). In addition, the IRS requires that reimbursable business expenses be governed by the substantiation rules of section 274(d) of the Internal Revenue Code. In particular, employee travel expenses must be substantiated as to amount, time, place, and business purpose. A diary or similar record is needed that lists the background details of your travel and entertainment expenses. A Juniata College EXPENSE REPORT - TRAVEL VOUCHER (available in the Accounting Services Public Folder) is recommended for this purpose. With the exception of tipping and gratuity expenses, receipts, vouchers or similar statements are needed for all expenses. A receipt must show (1) the amount of the expense; (2) the date the expense was incurred; (3) where and with whom the expense was incurred; and (4) the nature of the expense. Hotel or lodging statements must show separate charges for lodging, meals, telephone charges, etc. The College will not reimburse costs for personal entertainment (e.g. movies, snacks or beverages not consumed at meal time) or personal phone calls associated with lodging. On occasion, an alumni or friend of the College may provide lodging and/or meal(s) for an employee out-of-town on College business. The employee may choose to give a small gift purchased at the College Bookstore (value not to exceed $30.00) to the provider in appreciation. In lieu of the College Bookstore gift, an employee may choose to thank his (her) benefactor(s) with dinner or some other token of appreciation. Of course, the cost of the meal or gift provided should not exceed what the employee would have otherwise paid for the night's lodging. All expense reports including the EXPENSE REPORT - TRAVEL VOUCHER must be signed by the employee claiming reimbursement and approved by his (her) supervisor or their designee.
Juniata's general guidelines do not permit reimbursements of the expense of meals incurred on "one-day business trips". To qualify as a business meal, the business trip must last "longer than a regular working day (but not necessarily 24 hours) and requires time off to sleep (not just to rest) before returning home." This is called the overnight-sleep test. Breakfasts will be reimbursable on the first day of an overnight business trip only if the trip begins earlier than 6:30 am.
Exceptions to overnight-sleep test:
- One-day business trips which cause the participant(s) to be away from their residence at "normal" evening meal time should be reimbursed for any actual meal expenses incurred on the way home. For a day business trip to qualify for evening meal reimbursement, the participant(s) must be at least one (1) hour from their home or College, whichever is closer, at the end of the normal work day. Lunches do not qualify for reimbursement on one-day business trips.
- One-day business trips to attended seminars or educational presentations that last over the lunch hour may have lunch reimbursed.
Other ordinary and necessary meal expense is not allowable by IRS unless you can establish that the "expense is directly related to the active conduct of his trade or business. If a meal expense directly precedes or follows a substantial and bona fide business discussion (including a business meeting at a convention), then it must be established that the expense is associated with the active conduct of a trade or business." Treating a fellow employee (student or otherwise) to lunch on their birthday or "Administrative Assistants" does not qualify as bona fide business discussion opportunity. Taking a prospective employee or donor out to lunch as part of a recruitment or cultivation effort will qualify for reimbursement if properly documented.
Maximum guidelines (listed below) which include gratuities have been established for meals; requests for reimbursements in excess of these amounts must receive approval from the Controller before they will be reimbursed, otherwise, they will be viewed as personal expenses. Under special circumstances, expenditures in excess of "Maximum" will be reimbursed. Special circumstances would include costs pertaining to certain fund raising initiatives, involving prospective donors, and other extraordinary academic or administrative activities which include non-employees and are approved by Cabinet Officers. Areas that are considered "High-Cost" by the IRS are reimbursable at 125% of amounts stated.
ENTERTAINMENT AND APPRECIATION EXPENDITURES FOR STAFF AND STUDENTS:
The College provides several functions each year that express its appreciation and gratitude for work done by staff and students. Additional expressions (meals or gifts) are not considered necessary or appropriate. Exceptions to this policy will require Controller and area VP approvals.
MAXIMUM GUIDELINE COSTS FOR MEALS:
Travel within United States 2022 Rates Meal including gratuity
Daily per diem rate:
U.S Travel $59/day
International Travel $71/day
These guidelines are set per the IRS for each calendar year and will be updated accordingly.
Suggested daily per diem rate: U.S. Travel $96/night
These guidelines are set per the IRS for each calendar year and will be updated accordingly.
TIPPING AND GRATUITIES:
Juniata College views tips or gratuities of 15% for good service on meals or services costing more than $7.00 to be adequate. Meals and services costing under $7.00 may dictate gratuities in excess of this limit. The College will not reimburse an employee for excessive gratuities.
VALET AND CLEANING SERVICES:
The College will reimburse reasonable valet and cleaning services for clothing if an employee is traveling out-of-town continuously on College business for one week or more.
Juniata College reimburses employees for College use of their personal automobile at the standard mileage rate published by the IRS. This rate is $.585 per mile for calendar year 2022. Commuting expenses between an employee's home and a business location within the area of the employee's home are not reimbursable. The value of commuting miles and personal miles attributable to College provided vehicles assigned to individual employees will be added to their gross compensation as required by IRS guidelines.
Employees may need to rent a vehicle while traveling on College business. It is not the responsibility of the College to provide luxury vehicles in these instances. The College carries insurance coverage for hired or rented vehicles; the employee should not purchase additional insurance coverage. In addition, you are encouraged to rent vehicles using a College "Purchasing Card". This automatically provides additional insurance.
PUBLIC TRANSPORTATION EXPENSE:
When it is necessary for a Juniata College Employee to use public transportation on long trips, reservations should be made using Juniata College “Purchasing Card”. Adequate written explanation of the business purpose of the trip is required. This may be included on a Juniata College EXPENSE REPORT - TRAVEL VOUCHER.
NON-EMPLOYEE TRAVEL EXPENSES:
Travel expense deductions for an employee's spouse or dependent are permitted only if the following conditions are met:
- a bona fide business purpose for their presence is established and
- these expenses would otherwise be deductible and
- the spouse or dependent is a bona fide employee of the College.
The cost of taking a spouse or other non-employee (Trustees are considered employees) along on a College business trip is not reimbursable unless it can be shown that their presence "serves a bona fide business purpose". In addition, specific responsibilities and duties must be described in writing, and prior Controller approval must be given before expenses can be incurred. If reimbursements of non-employee travel expenses are approved, the employee is responsible for segregating the spouse’s expenses from their own. This would include separating expenses incurred for meals, hotel, air fares, etc. between the employee and spouse. Lodging expense may be allocated by subtracting a single occupancy rate from the double. Substantiation of the rates should be provided. Meal expense may be divided equally between the spouse and employee. Non-employee spousal expenses that are reimbursed by the College will be reclassified as compensation to the employee. The employee will be taxed on this additional compensation. The College will not additionally compensate the employee for any extra tax liability incurred because of spousal travel.
OTHER BUSINESS EXPENSES:
Normal purchasing procedures of the College should be used when possible, but occasionally, an employee may find it necessary to purchase goods and services not strictly related to "travel expenses". For example, an instructor at a conference may be able to by educational slides or books which could be used in their classroom. These expenditures should be reported on the Juniata College EXPENSE REPORT - TRAVEL VOUCHER. List the amount and account number to be charged (e.g. 11-11520-6123) under the Other Expenses section of the form. Explain the nature of the expenditure on the receipt itself or in the Additional Explanation or Remarks section of the report. If you are unclear about the appropriateness of any expense item, contact the Accounting Office for clarification.
ADVANCES AND ADVANCE CLEARINGS:
Cash advances for business trips are available through the Business Office. All travel advances will be paid via direct deposit into the employee’s bank account by the Accounts Payable office. Advances must be submitted one week in advance of the trip to allow for processing time. Use of paper check or cash advances will be made on a case by case basis at the discretion of the Accounting office staff. After the advance is made, the recipient is responsible for safe guarding the cash. Advances must be cleared at the Accounting Office no later than one week after returning to campus. An individual may not have more than one advance outstanding at any given time. Failure to clear advances in a timely manner may result in an individual being ineligible to receive future advances.
PAYMENT METHODS FOR TRAVEL:
All employees are to use the Juniata Purchasing Card when making travel arrangements and during times of travel. The use of personal credit cards is not permitted unless prior approval is received or if an emergency occurs. Employees may receive cash advances for travel (as stated in the previous section) and may also have special provisions activated on the Purchasing Card for times of international travel. If an employee makes travel arrangements in advance by using a personal credit card or personal funds and submits these expenses for reimbursement:
- Their direct supervisor and the Controller will be notified that the PCard was not used
- If the expenses are approved by the supervisor, the employee will not receive reimbursement until after the travel has taken place.