Travel & Entertainment Policy

I. Scope

This policy applies to any IWU employee traveling on behalf of the University or processing / approving travel expenses.

II. Policy Statement

Indiana Wesleyan University (University) will reimburse individuals for necessary and reasonable travel expenses, as defined herein, incurred in the conduct of official University business. The individual authorizing reimbursement is responsible for verifying that expenses are, in fact, necessary and reasonable. He or she is also responsible for confirming the availability of funding to support the expenses and that appropriate documentation is provided. Reimbursements will be processed in accordance with regulatory requirements and sound business practice.

III. Reason for the Policy

The University must follow legal requirements imposed by the Internal Revenue Service and, when applicable, granting agencies in reimbursing travel and entertainment expenses. All persons traveling on behalf of the University and those who approve travel expense reimbursements are responsible for knowledge of University travel policies and procedures, and compliance with sponsoring agency regulations governing travel expenditures. All travel expenses are subject to audit by Accounts Payable, the University’s Internal Audit Department and external auditors, as well as by agencies such as the Internal Revenue Service and Federal granting agencies. The purpose of these audits is to ascertain that the expenses are proper and fully documented. Therefore, it is essential that travelers are aware of the importance of fully documenting their expenses, and supervisors and administrative officers recognize their responsibility for critically reviewing travel expense reports prior to approving expenses for reimbursement.

IV. Procedures

Accountable Plan

Reimbursement for travel expenses must comply with Internal Revenue Service reporting and documentation requirements for an “Accountable Plan.” The following Accountable Plan requirements must be satisfied:

1. Business Connection – The plan can provide reimbursements or allowances only for otherwise deductible business expenses (such as travel, lodging, or meals) that are paid or incurred by individuals in connection with their performance of services as employees of the University.
2. Substantiation – The plan must require substantiation of the expenses being reimbursed through use of an expense report and attachment of receipts. The purpose of this record is to identify the specific nature of each expense and to allow the University to conclude that the expense is attributable to its business activities. The documentary evidence must substantiate the business purpose of the expense including, as applicable, the exact amount, date, time, and location of any travel, meals or entertainment, the names of individuals present, and the specific University business discussed.
3. Timeliness – The plan must require substantiation of the expenses within a reasonable time frame. A reasonable time frame shall be defined as substantiation of the expense(s) within 60 days of incurring the expense, or in the case of a trip, at the conclusion of the trip. Eligible expenses substantiated after 60 days may be reimbursed with Vice Presidential approval; however, the amount is considered gross income subject to tax withholding and will be processed through payroll and reported on a W-2 form.
4. Return of Excess Advances – The plan must require employees to return any advance amounts that exceed substantiated business expenses within a reasonable period of time (See Section VIII. Cash Advances). Any excess not returned within the defined timeframe will be treated as compensation to the employee and will be subject to income and payroll tax withholding.

Preferred Payment Method

The University requires employees that have been issued a University Purchasing Card (P-Card) to use their P-Card for all IWU travel and associated expenses. The University encourages other employees to request use of an IWU loaner P-Card where possible. This reduces out-of-pocket costs to employees while reducing the number of employee reimbursements.

Designated Headquarters

1. Standard Designation – The designated headquarters of each University employee is, by default, the University location at which the employee spends most of his or her work time.
2. Designation of Employee Home as Headquarters – There are three (3) situations in which an employee’s home may be designated as his/her headquarters:
   1. A telecommuting arrangement approved by the employee’s Vice President.
   2. An employee who teaches exclusively online.
   3. An employee who teaches at multiple locations, whether within or across terms.

Eligible Travel Expenses

1. Transportation: The mode of travel should be the most economical means reasonably possible. Reimbursement normally will be made at this rate only. However, if time and convenience of the traveler and time away from the University cause the traveler to select a mode of travel other than the most economical, those factors will be considered in the approval and computation of the reimbursement.
   1. Airfare Traveling by air is limited to coach class unless approved in advance by the traveler’s Vice President for good cause. Good cause typically will be limited to a significant health or medical condition that reasonably necessitates travel at a higher class. The university reserves the right to require documentation of such conditions. Airline reimbursement is also subject to the following restrictions and considerations
      1. Checked Baggage Fees – The University will pay the cost of one checked, but not overweight, bag if a checked bag cost is assessed by the airline. For travel of at least five consecutive days, the University will pay the cost of two checked, but not overweight, bags if a checked bag cost is assessed by the airline. The University will pay airline fees for the transportation of equipment, displays, promotional materials, or other items necessary for the representation of the University during travel, provided the airline fees are less than the cost of shipping the items in advance.
      2. Airport parking – When parking at airports, travelers must use the least expensive parking appropriate and available.
      3. Airport Shuttle/Taxis – See Section VI.A.4. Other Ground Transportation.
   2. Car Rental Renting a vehicle is permitted under limited circumstances, such as when their use is less expensive than the cost of taking taxis, or if taxis are not available. Travelers are expected to rent a mid-size or smaller vehicle unless a larger car is necessitated by the number of bags and/or travelers in the University group. Reimbursable costs include daily rental fees, fees charged for excess mileage, gasoline charges, and tolls. Non-reimbursable costs include, but are not limited to, vehicle repairs, parking tickets, fines, and traffic violations. Domestic travelers should decline any additional insurance coverage offered by rental companies, as it duplicates insurance already provided by the University. If a traveler chooses to accept additional insurance, these charges will not be reimbursed. International travelers renting vehicles should purchase additional insurance and it is reimbursable.
   3. Private Automobile Travel by private automobile will be reimbursed at 80% of the current IRS-approved mileage rate in effect at the time the travel occurred, not to exceed the current IRS mileage rate. This rate covers the use of the vehicle and fuel. Mileage reimbursement will be made on the basis of the most direct route between an employee’s home or designated headquarters and the destination of the trip, whichever is less. Additional reimbursement will be made for tolls and reasonable parking fees. Non-reimbursable costs include, but are not limited to, vehicle repairs, parking tickets, fines, and traffic violations. It is the responsibility of the owner of the vehicle being used for business to carry adequate insurance coverage for their protection and for the protection of passengers. The University will not reimburse for travel that is less than five (5) miles one way.
      1. Reimbursable travel is defined as movement on official University business from one’s designated headquarters (See Section V. Designated Headquarters) or home, whichever is less, to another destination and return. Commuting between one’s home and designated headquarters is NOT an allowable, reimbursable expense as defined by IRS regulation. Any exception to this policy will be treated as taxable income to the employee. Only actual miles driven that are in accordance with this policy will be reimbursed.
   4. Other Ground Transportation Other ground transportation may be used when the traveler finds it practical and cost-efficient. Travelers will be reimbursed for ground transportation to and from airports and railroad stations plus reasonable tips, not to exceed twenty percent of the charge, when such service is not included in air and rail fares and where public transportation is not practical. This includes transportation between hotels, airports, railroad stations, or meetings.
2. Lodging: Travelers are expected to use economical accommodations. In addition, the following specific guidelines apply:
   1. Reimbursement for lodging may not exceed the normal rate for a standard room.
   2. If an individual is attending a convention or conference, using the convention or conference hotel is appropriate, but not required. If the individual elects not to stay at the convention or conference hotel, reimbursement is limited to the lower of the actual or conference/convention rate.
   3. Without exception, reimbursement requests must be documented by an itemized hotel bill and receipt. It will be limited to room and tax (if exemption cannot be obtained), business phone calls, and fixed-rate Internet service if necessary to complete University business.
   4. Wherever possible, non-reimbursable “incidentals” that are charged to a hotel room should be settled to a personal credit card upon checkout. Note that if an individual is in travel status for more than five days, reasonable laundry costs may be reimbursed if approved in advance by his/her Vice President.
3. Meals and Incidentals:

   Travelers will be reimbursed actual expense for personal meals and incidentals within the following guidelines:

   1. For overnight travel, the meal and incidental allowance, including taxes and gratuities, will be capped at the rates established by the Government Services Administration (GSA) for domestic travel and the Department of State for international travel.
   1. Rates for specific domestic geographic areas can be found at www.gsa.gov/portal/content/104877.
   2. International rates are located at http://aoprals.state.gov/web920/per_diem.asp 
   3. Reimbursement will not be provided for meals included in conference or registration fees.
   4. Allowances for partial day travel, (e.g. the first and last day of a trip) will follow the GSA “Meals and Incidental Expenses Breakdown” located at www.gsa.gov/portal/content/101518%20.
      1. If a business meal is part of the travel day, it will be reimbursed or accounted for separately and the allowance cap for that day will be adjusted to account for that expense. For instance, if an employee entertains friends of the university for lunch, the actual expense will be paid as a business meal and the employee’s meal allowance for that day will be the capped amount minus the lunch allowance as listed on the webpage sited above.
      2. Lunch while on non-overnight travel is reimbursable only if it qualifies as a business meal (see business meal definition below) and is specifically approved by the employee’s supervisor. The allowance will be determined by the information listed on the webpage sited above.
   5. Meal and incidental expenses must be documented with itemized receipts. The itemized receipt must show exactly what was purchased. The University will reimburse the lesser of actual expenses and allowance amounts.
   6. Gratuities over 20% of the cost of the meal, including taxes, will be considered excessive and will not be reimbursed. Gratuities for meals must be included as part of the cost of the meal.
   7. Meals involving multiple IWU employees should be paid for by the highest-ranking employee.
4. Other Eligible Expenses
   
   1. Business office expenses, such as fax, copy services, etc., as required for University business purposes.
   2. Overnight deliver/postage, as required for University business purposes.
   3. In the case of required international travel, the University, if necessary, will reimburse the costs associated with obtaining the appropriate travel documents (e.g., passport, visa, etc.), medically required vaccinations, international travel insurance and assistance program, and currency conversion fees.

Foreign Currency Transaction

Whenever possible, foreign currency transactions should be conducted using a University P-Card (See Section III. Preferred Payment Method). When cash transactions occur in a foreign currency, the U.S. dollar amount reimbursed will be based on the conversion rate in effect on the date of the transaction.

Cash Advances

1. Restrictions
   1. Cash advances are not appropriate for items that can be paid with a University P-Card or via direct pay.
   2. Cash advances are available only for international travel and group (domestic or international) travel.
2. Requesting and Reporting
   1. Where allowed by policy, cash to meet a portion of an employee’s expected travel expenses may be requested in accordance with the University’s Policy on Cash Advances.
   2. When approved, cash advances must be managed and documented in accordance with the University’s Policy on Cash Advances.

Special Categories of Travelers

1. Employees on Leave: Normally, employees are not eligible for expense reimbursement while on unpaid leave of absence from the University, unless the employee is requested to represent the University at a professional meeting, event, or other activity. A sabbatical is considered paid leave; therefore, faculty on sabbatical typically will be eligible to receive reimbursement for pre-approved, University-related travel expenses.
2. University Guests: Travel expense reimbursements for non-University employees, including but not limited to prospective employees, guest speakers, and consultants, are subject to this policy.
3. Travel Expense for Non-Employee, Spouse, or Other Person
   1. No expenses for non-employees accompanying employees on University travel will be reimbursed unless such travel significantly benefits the University and is specifically approved in writing by the traveler’s Vice President in advance.
   2. If an employee on official travel is accompanied by a person not on official travel, and the expenses for travel, accommodations, or other services are incurred jointly by such persons, then reimbursement by the University to the employee on official travel is limited to the actual expenses attributable to the traveler, or to the amount that the traveler would have incurred if traveling alone.
   3. Reimbursed travel expenses of a spouse or other person accompanying an employee on travel for University purposes will be reported as taxable income to the employee unless (1) the spouse or other person accompanying the employee is also an employee of the University, (2) the travel of the spouse or other person is for a bona fide University business purpose, AND (3) the expense would otherwise be deductible by the spouse or other person. Note: All three conditions must be met in order to comply with IRS regulations.
4. Hourly Staff
   1. Travel time is paid work time when it cuts across the employee’s normal workday or during the corresponding hours on non-work days. For example, if an employee regularly works 8 a.m. to 5 p.m. from Monday to Friday, the travel time during these hours is not only work time, but travel on Saturday or Sunday between 8 a.m. and 5 p.m. would also constitute work time.
   2. Time spent traveling outside of regular work hours as a passenger is not deemed paid work time unless the employee is driving or working during the travel.
   3. Meal and sleep periods are not deemed compensable.
   4. Hourly staff employees are expected to keep and report an accurate accounting of work hours while in travel status.
5. Senior Management: For purposes of this policy, senior management is defined as those at the Vice President level and above. No more than three (3) members of senior management are to travel together, e.g., in the same car, on the same flight, etc.

Non-Reimbursable Travel Expenses

Travelers will generally not be reimbursed for miscellaneous items such as those listed below. The list is not all inclusive; it serves only as a sample for reference

1. Airline club membership dues
2. Airline phone usage
3. Airline trip insurance
4. Alcoholic beverages
5. Auto repairs (personal)
6. Baby-sitting
7. Barbers and hairdressers
8. Car wash (Personal or rental vehicles)
9. Clothing and toiletry items
10. Expenses related to vacation or personal days taken before, during, or after a business trip
11. Fees for cash advances from credit cards or ATM’s Hotel health club fees
12. Inflight Wi-Fi/Internet unless required for IWU business
13. Loss or theft of cash advance money or airline tickets
14. Loss or theft of personal funds or property
15. Lost baggage
16. Loyalty/Reward program “Points” used for IWU travel (airline travel vouchers/certificates, frequent flyer miles, loyalty award programs for air, hotel, car, etc.)
17. Luggage and briefcases
18. Magazines, books, newspapers, personal reading materials
19. Medical expenses while traveling
20. Mini-bar refreshments
21. “No show” charges for hotel or car service
22. Optional travel or baggage insurance
23. Parking tickets or traffic violations
24. Personal accident insurance (domestic)
25. Personal automobile maintenance expense
26. Personal entertainment (in-room movies, sporting events, etc.)
27. Personal reward/travel points used for IWU travel
28. Personal property insurance
29. Personal telephone calls in excess of a “safe arrival” call not to exceed 10 minutes in length
30. Pet care
31. Saunas, massages, shoe shine
32. Souvenirs or personal gifts
33. Tips in excess of 20% and tips in addition to pre-applied gratuity

Entertainment (as distinguished from Travel)

1. Entertainment is defined as business meals, beverages, and event admission costs for non-employees (business associates, university guests, students, job applicants, professional colleagues, donors, etc.) deemed to be in the best interest of the University. The non-employee entertained must have a prospective or actual business relationship with the University.
2. Entertainment expenses may occur locally or while in travel status. Authority to incur entertainment expense must be properly approved in advance by the employee’s Vice President and documented by receipts and records indicating the name(s) of the guest(s) and justification for the expenditure.
3. Entertainment expenses that occur while in travel status are separate from employee travel expenses incurred directly for the employee’s use or benefit during University-related business travel. Entertainment costs must be classified and charged separately.
4. Business meals are meals with a clearly substantiated business purpose and are directly associated with the active conduct of University business. At a business meal, the business discussion is the primary purpose of the meal. Examples of business meals include meetings with business associates, professional colleagues, students and others at which a bona fide business discussion takes place. Business meals should adhere to the following rules:
   1. The frequency and number of local business meals should be limited. Acceptable reasons for local business meals include meals with a guest speaker/lecturer, professional colleagues, business associates, university guests, donors, recruits for prospective faculty, staff or students, etc. These meals should be limited in terms of number of attendees and total cost.
   2. Business Meals between two or more employees only, during which routine businesses are discussed are generally not reimbursable. There may be an instance when a meal between two more employees may be reimbursable if the meeting is infrequent (no more than quarterly), with a written agenda, and is during a regular meal-time and could not be scheduled during other working hours. Documentation of the agenda should be provided as back up to the transaction. Infrequent culture building (no more than quarterly) activities may be approved by the President’s Cabinet members. All transactions related to the activity must be on the President’s Cabinet member's purchasing card.
   3. Meals should not be provided as a matter of personal convenience and must be reasonable and appropriate to the purpose and nature of the event.
5. University funds may not be used for occasions such as employee birthdays, weddings, baby showers, anniversaries, or other occasions of a personal nature.
6. Expenses incurred primarily for the benefit of University faculty or staff members are considered personal expenses and are not reimbursable.

Christmas Parties

Each year the University sponsors a Christmas party for all employees. This celebration is intended to be the official Christmas party of the institution. Any departmental parties planned in addition to this party are considered personal expenses and are not reimbursable. The Chancellor IWU-National & Global may grant an exception for Regional Centers who are unable to attend the employee Christmas Party at the Marion campus. In order to maintain equity across campus, IWU does not permit Christmas gifts for employees to be purchased with departmental funds. Any exceptions require written approval from the Operating Unit’s President’s Cabinet Member. The written approval should be submitted to Procurement Services or Payroll Services with the request for payment.

V. Related Information

IRS Publication 463