Procedures/Policies for Travel and Business Expenses Reimbursements

Preamble:

As a result of the Internal Revenue Service rules adopted and effective July 1, 1990, Nebraska Wesleyan University has adopted a written policy regarding employee reimbursement. It has been Wesleyan's policy to operate under an accountable plan, to protect employees from the requirement of reporting all advances or reimbursements as personal income.

Definitions:

An "Accountable Plan" is an employee reimbursement process for expenses on behalf of the university that meets the Internal Revenue documentation requirements. An accountable plan requires an employee to provide documentation that proves that the monies paid to the employee are for legitimate university business expenses. The documentation required includes receipts, copies of paid bills/invoices, written confirmation of payment of expenses from a third party, travel itinerary reports and any other official written items that documents the expense as a legitimate business expense on behalf of the university. These expenses are summarized on a TRAVEL REIMBURSEMENT form.

A "Nonaccountable Plan" is an employee reimbursement process for expenses on behalf of the university that does not require an employee to provide documentation that proofs the moneys paid to the employee are for legitimate university business expenses.

EMPLOYEE REIMBURSEMENT
DOCUMENTATION REQUIREMENTS

1. The University reimburses employees for authorized expenses according to the Internal Revenue Service rules and regulations pertaining to "Accountable Plan" reimbursement programs.
2. Expense request for reimbursement forms that do not meet the full documentation requirements of the I.R.S. "Accountability Plan" rules will be administered under the I.R.S. "Nonaccountability Plan" rules. Reimbursements that do not meet the federal requirements for accountable plans will be added to the employees taxable W-2 income reporting at the end of the I.R.S. calendar year and 40.65% of the reimbursement will be withheld from the employees pay for federal and state taxes.
3. For reimbursed expenses, information and documentation attached to the proper reimbursement for payment form must be submitted that is sufficient to enable the university's audit personnel to identify the specific nature of each expense and to conclude that the expense is an employee business expense. Each of the elements of an expenditure or use must be substantiated.
4. The employee must submit information and documentation attached to the proper reimbursement for payment form sufficient to satisfy the "adequate accounting rules" with respect to travel, entertainment, business gifts, or the use of listed property. Nebraska Wesleyan University travel forms must be completed and travel forms must be used for all travel expenses and meal reimbursements.
5. The following reimbursement limitations and rules apply to all expenses reimbursed by the university:
   1. Reimbursement for travel may not exceed the cost of one round-trip economy or coach air fare per trip, if such is available;
   2. Mileage, at the rate established by the Internal Revenue Service, for actual mileage traveled in performance of duties will be allowed when employees use their own personal vehicles.
   3. When university vehicles or rental vehicles are used for travel on behalf of the university, the university's corporate gas credit cards will be used. Gas credit cards are distributed by the Business Office, under the universities accountability procedures. Gas purchase tickets must be returned with the credit cards after the trip.
   4. Typical transportation to and from airports will be by the most economical and reasonable method of transportation. Receipts must be secured.
   5. Actual expenditures for meals, motel and hotel accommodations will be reimbursed if proper documentation of expenses and receipts are submitted. Room expenses reimbursement will include only the room rate for the employee (spouses or family members sharing accommodations with the employee must pay an appropriate portion of the room expenses), and telephone reimbursements will include only call made on the behalf of the university.
   6. Charges for personal laundry, dry cleaning, movie channel TV, and other personal services or items will not be reimbursed.
   7. Reasonable tips are permitted (15%) and each tip should be itemized when reporting expenses.
   8. Employees are urged to request discounts when available.
   9. If savings to Nebraska Wesleyan University may result, reimbursement restrictions can be negotiated with the appropriate division Vice President.
   10. Compliance with the Internal Revenue Service rules is mandatory and cannot be waived.

When a request is made by the university for an employee to represent the university off campus, the university shall reimburse the expenses of the employee under the guidelines established by the university. Travel funds may be drawn in advance from the Business Office in anticipation of estimated expenses if the request for an advance is approved by the immediate supervisor and if the request for an advance meets the university's cash advance policies and procedures. Accounting for travel advances not processed with in 60 days of the travel event will be administered under the nonaccountable plan rules and the employee will be responsible for all tax liabilities.

Internal Business Office Procedures/Policies

1. I.R.S. Regulation Summary:
   1. Under I.R.S. regulations only accountable plans may be exempt from reporting as taxable income on employees W-2 form reimbursements made to employees for expenses incurred on behalf of the university.
      1. The university is operating under an accountable plan for all reimbursements that meet the federal requirements.
      2. Reimbursements that do not meet the federal requirements for accountable plans will be added to the employees taxable W-2 income reporting at the end of the I.R.S. calendar year and 40.65% of the reimbursement will be withheld from the employees pay for federal and state taxes.
      3. Federal regulations requirements for accountable plans became effective July 1, 1990.
   2. The university's accountable plan must meet the following requirements:
      1. The arrangement provides advances, allowances or reimbursements of an employee's business expenses paid or incurred in the performance of services as an employee separate from the distribution of wage compensation.
      2. The employee must submit information or documentation to the payor sufficient to satisfy the "adequate accounting rules" with respect to travel, entertainment, business gifts, or the use of listed property. For other reimbursed expenses, information must be submitted that is sufficient to enable the payor to identify the specific nature of each expense and to conclude that the expense is an employee business expense. Each of the elements of an expenditure or use must be substantiated.
      3. The arrangement must require that an employee return to the payor within a reasonable time the amount of the reimbursement or allowance that exceeds the substantiated expense.
         1. An expense substantiated to the employer within 60 days after it is paid or incurred.
2. Business Office Responsibilities:
   1. The Comptroller and the Personnel and Business Systems Officer are responsible for administrating the university's accountable reimbursement plan and will make all decisions as to the acceptability of all reimbursement documentation.
      1. Documentation must be arranged and submitted by the employee attached to the proper transmittal form for the type of reimbursement transaction taking place. The employee is solely responsible for providing the documentation in an acceptable manner. Documentation not provided in an acceptable manner will be returned to the employee for proper completion.
      2. The reimbursement amounts will be added to the employee's W-2 for any reimbursement documentation ruled unacceptable by the Comptroller or the Personnel and Business Systems Officer and 40.65% of the reimbursement amount will be withheld for federal and state taxes from the employees next available payroll.
      3. The employee will be notified in writing of all amounts of reimbursement that will be added to the employees W-2 and the withholding amounts made against the employees payroll.