Office of Origin: Purchasing & Risk Management
Responsibility: Manager, Purchasing & Risk Management
Date Adopted: 3-12-1987
Date Reviewed: 7-05-2016
Last Date Modified & Approved: 7-05-2016, 09-11-2017

The College will reimburse employees for all reasonable and necessary expenses incurred in transacting business of Lake Michigan College (the College.)

Reimbursement Requests

In order to receive reimbursement for a business expense, an approved Expense Report must be submitted no later than 30 days after incurring the expense. Requests beyond 30 days may not be reimbursed.

For reimbursement requests related expenses incurred in June, every effort must be taken to submit the Expense Report by June 30.

Inadequately documented Expense Reports will be returned to the submitter for more information.

All expenses on an Expense Reports will be reviewed for allowability. Non-allowable purchases will not be reimbursed.

On rare occasions, cash advances may be given in accordance with the College’s “Cash Advance” procedure.

Required Documentation

Appropriate documentation must be attached for all expenses. Documentation is listed below in order of preference:

1. Original itemized vendor receipt showing vendor name, amount, date, description of purchase
2. Copy of itemized vendor receipt showing vendor name, amount, date, description of purchase
3. Packing slip or other documentation received from vendor
4. Screen-print or order confirmation e-mail
5. Copy of order form to vendor

Itemized receipts are required unless an itemized receipt is not available or is genuinely difficult to obtain (e.g., parking meter charge). Credit card statements and other forms of payment alone are not adequate documentation due to lack of itemization. If an itemized receipt cannot be provided, a detailed explanation must be included.

If no documentation at all can be provided, a notation of “no receipt” should be made and initialed by the cardholder’s supervisor along with a detailed explanation.

An approved Travel Authorization Form (TAF) number must be included for travel expenses that include an overnight stay. A TAF is not required for travel not requiring an overnight stay.

When submitting expenditures for airfare, the passenger’s ticket coupon/receipt or e-ticket itinerary with pricing must be submitted.

Allowable/Reimbursable Expenses

All expenses must be associated with official College business and in accordance with College policies and procedures, specifically the “Purchasing,” “Per Diem” and “Procurement Card” procedures.

Allowable expenditures include, for example, the following:

• Advertising services
• Alcohol for instructional purposes in academic programs; currently approved programs include Enology & Viticulture, Hospitality, and Culinary
• Auto rental
• Business meals when not traveling overnight
• Classroom supplies
• Conference, meeting, seminar, workshop registrations
• Hotel accommodations
• Minor capital
• Professional memberships
• Subscriptions and books

No expenditures for which the College has prohibitive policies or procedures are allowable. For example, the following items are not allowable expenditures:

• Alcoholic beverages unless hosted by the President or authorized in advance and in writing by the President
• Alcoholic beverages charged to a grant or contract under any circumstances
• Entertainment unless by Athletics Dept. and in accordance athletic policies
• Capital purchases (i.e., fixed assets) unless approved in advance by a Vice President
• Cash advances, travelers checks, wire transfers, ATM fees, money orders
• Charges for non-College individuals (e.g., when traveling on College business with family) unless the non-College individual is a guest of the College (e.g., taking a donor to lunch, meeting with a superintendent for breakfast)
• Device applications (“apps”) other than by IT department
• Drugs and narcotics
• Facility or room rental for conducting meetings unless College facilities are unavailable
• Flowers or gifts for an employee or friend of the College unless provided by or authorized by Vice President of Administration or the President
• Gasoline as such must be purchased with the College’s gasoline credit card
• Information technology services (i.e., laptop repairs) other than by IT department
• Meals when traveling overnight as such falls under the “Per Diem” procedure
• Office supplies as must be purchased through Staples account online
• Personal phone calls
• Personal purchases
• Sales tax on any purchase as the College is exempt from the payment of sales tax. The cardholder is responsible for ensuring that sales tax is not paid, which may be done by telling the vendor when ordering that the purchase is tax exempt and providing a tax exempt certificate if necessary.
• Split purchases whereby more than one transaction is done in order to circumvent delegated authority levels, bypass competitive bidding requirements, or to avoid other internal controls; these practices are strictly prohibited with Pro Card purchases as they are throughout the College.
• Telecom devices (e.g., two-way radio, cell phone, iPad) other than by IT department

Travel, Business Meals & Travel-Related Expenses

The following is intended to provide guidance to employees regarding Lake Michigan College (the College) travel. These procedures are outlined in general terms to allow reasonable flexibility, and are not expected to cover every possible situation. All questions should be directed to the Purchasing Manager.

In general, it is expected that:

• Travel must be supported by a valid business case that aligns with the College’s mission.
• Information and knowledge gained during the course of the event attended will be shared.
• Care must be taken to ensure a true need for more than one person to attend an event.

Expenses that are reimbursed based on the conditions herein will not be included in individual income and will not be subject to tax withholding or reporting. If an expense does not satisfy the conditions herein but is reimbursed, the amount is generally reportable as taxable income and subject to tax withholding and reporting.

Before any College employee operates a motor vehicle while engaged in any work phase of their employment, either assigned or implied, they must first possess a valid driver’s license.

Authorization to Travel

A Travel Authorization Form (TAF) number must be completed and approved prior to travel for travel that includes an overnight stay. A TAF is not required for travel not requiring an overnight stay. Expenses for travel that occurs without prior approval may not be reimbursed.

Allowable & Non-Allowable Travel Expenses

Travel is limited to the most direct and usually-traveled route and by the most economical means of transport considering the expense as well as the traveler’s time. That portion of travel that is not in the best interest of the College (e.g., a detour for personal reasons) will not be reimbursed.

Examples of allowable travel expenses include:

• Common-carrier airfares
• Parking fees
• Privately-owned vehicle mileage
• Road tolls
• Taxi, shuttle, bus, or streetcar fares
• Vehicle rental

Specific types of expenses will not be reimbursed include, but not limited to:

• Alcoholic beverages unless hosted by the President or authorized in advance and in writing by the President
• Entertainment expenses unless supported by an Athletic Dept. policy/procedure
• Laundry, dry cleaning, clothing repair costs
• Mileage on College owed vehicles
• Personal amusement (e.g., theater, golf)
• Repairs, maintenance, gasoline, insurance on personal vehicle
• Travel insurance
• Traffic fines, parking tickets, court costs

Use of Privately Owned Vehicle & Mileage Reimbursement

Travelers are encouraged to first use College or rented vehicles. If none are available or their use feasible, mileage will be reimbursed for travel while conducting College business as provided for below.

The operator of a privately owned vehicle must have in force a personal auto insurance policy that includes bodily injury and property damage liability and provides for primary coverage. If a traveler driving a privately owned vehicle is involved in an accident and found to be at fault, the personal auto insurance is responsible to the limits of the policy. If the claim exceeds that coverage, the College’s insurance may cover the amount over the policy limits if the traveler was acting within the course and scope of his or her employment. If a traveler driving a personal vehicle on College business is involved in an accident, regardless of fault, the College will not reimburse the traveler for any physical damage to the vehicle.

Approved mileage will be reimbursed at the current Internal Revenue Service rate.

If traveler departs from home on a normal workday for another location to conduct College business, only round-trip mileage over their daily round-trip commute mileage can be claimed for reimbursement.

If an employee travels for work from home on a weekend or after normal working hours, the employee will be reimbursed for the mileage from home to that location.

Employees will be reimbursed for round-trip mileage between work sites (e.g., one campus to another) if the travel occurs on the same day but will not be reimbursed for round-trip mileage from home to the main work site.

Reimbursement for commuting (defined as travel between an employee personal residence and regular place of work) is taxable income and will be included on employee Form W-2. Reimbursement of transportation expenses for getting from one workplace to another in the course of College business is not taxable income. Following are example scenarios of transportation vs. commuting.

1. Employee drives from home in St. Joe to the work office in Niles. Later she drives to South Haven to deliver papers at another office and returns home. The trip between the home and Niles office is commuting; any reimbursement for this travel is a taxable wage. Reimbursement for travel from Niles office to South Haven and return trip home is not taxable.
2. Faculty is assigned to two campuses on a permanent basis, working at the first campus in the morning and driving from the first to the second campus in the afternoon. Reimbursement for travel between the two campus work sites is not taxable.

Reimbursement for mileage in lieu of other modes of transportation is limited to no more than the lowest cost mode of transportation and must be documented prior to travel.

Use of College Owned Vehicle

Travelers are encouraged to use College owned vehicles when available. Reservations may be made through the Office Manager, Facilities Management.

Gas credit cards are available for use with College vehicles; the College’s gas card program requires input of vehicle odometer reading and driver ID at point of purchase. College procurement cards or personal payment may not be used for gas purchases for College vehicles.

College insurance provides coverage to authorized drivers of College vehicles when on official College business. Passengers must be on official College business to be eligible for coverage.

Personal property stolen or damaged in an accident in any vehicle is not covered by College insurance.

Use of Rented Vehicles & Rental Vehicle Insurance Coverage

Rented vehicles may be authorized when other means of travel cannot be used economically. Use of rented automobiles is limited to instances where it is to the advantage of the College and not for the personal convenience of the traveler. The employee may reserve rental car or the Purchasing Manager can assist.

College insurance provides coverage to authorized drivers of rented vehicles when on official College business. Passengers must be on official College business to be eligible for coverage. Personal property stolen or damaged in an accident in any vehicle is not covered by the College’s insurance.

If using the College’s Fifth Third MasterCard procurement card, employees ensure that the rental is in the procurement cardholder’s name and that the procurement cardholder signs the rental agreement; the procurement cardholder should also decline the collision/damage waiver offered by the rental company. Fifth Third provides certain secondary coverage to the College’s auto policy if these steps are taken.

Travelers using rented vehicles are not be allowed to claim mileage. Reasonable gasoline purchases may be made using a College procurement card or will be reimbursable if receipts are provided.

Rental expense may be charged on the traveler’s College procurement card or submitted for reimbursement. The original customer copy of the rental agreement showing the amount charged must be included with submitting the expense. Rented vehicles should be of standard/mid-size class whenever available.

Local Transportation

Tolls, taxi fares, parking, and shuttle buses are classified as local transportation, the cost of which can be submitted for reimbursement.

The most economical means of transportation must be used in traveling to and from airports, train stations, or bus terminals.

Local transportation for personal activities such as sightseeing is not reimbursable.

Air Transportation

Air travel arrangements should be purchased through an online travel aggregator (e.g., Expedia, Travelocity, Kayak, etc.) at least 30 days in advance of travel to secure favorable pricing.

Air travel will be at the lowest logical available fare taking into consideration cost and time. This is considered generally to be travel in coach / economy class via the most logical and efficient route taking into consideration the traveler’s objectives, time constraints, and airline restrictions.

Travelers should travel on weekends if the cost savings exceeds the additional lodging and estimated meal costs.

If an airline charges a per-bag fee, the allowable expense will be limited to one bag only.

If a paper ticket is obtained and there is a charge for such, the charge will not be allowable.

Non-Employee Travel

Non-employees, such as guest speakers or candidates for employment, invited to the College or asked to travel for the College may request reimbursement for travel expenses. The administrator responsible for the budget center reimbursing the expenses must approve non-employee travel and advise the non-employee of allowable expenses.

Business Meals

Business meal expenses that are incurred during a trip requiring an overnight stay are addressed in the College’s Employee Travel Expense Payments – Per Diem Basis procedure. Business meals not related to travel requiring an overnight stay are not per diem and are addressed below.

Allowable business meal expense is limited to a reasonable amount for the geographic area.

Restaurant gratuities over 20% and tips in addition to pre-applied gratuity are not allowable.

Business meals may be purchased for customers, vendors, and others with whom the College has business dealings only when it is in the best interest of the College.

College funds may be used for business meals to meet with College personnel only if the meal is necessary to carry out College business.

It is not generally appropriate for employees in the same department to use College funds for business meal meetings.

Documentation must include names of those present, company affiliation, purpose, place, and date of meeting.

Upon occasion, it may be appropriate to purchase alcoholic beverages when entertaining College guests or hosting a College-related activity. All such occasions must be hosted by the President or the expense must be authorized in advance and in writing by the President. Expenses for alcoholic beverages cannot be charged to a grant or contract under any circumstances.

Charges related to traveling with a friend or family member are not an allowable expense.

Generally, meal reimbursements not de minimis in nature related to travel not involving an overnight stay is reported as taxable income on Form W-2.

Incidental Expenses

Incidental travel expenses that are incurred during a trip that requires at least one overnight stay are addressed in the College’s “Employee Travel Expense Payments – Per Diem Basis” procedure. Incidental expenses not related to travel requiring at least one overnight stay is not considered per diem and is addressed below.

The IRS defines “incidental expenses” as fees and tips given to porters, baggage carriers, hotel staff, and staff on ships. Incidental expenses do not include expenses for laundry, cleaning and pressing of clothing, lodging taxes, costs of telegrams or telephone calls, transportation between places of lodging or business and places where meals are taken, or the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings.

Business phone calls are an allowable expense; the person called and the business reason must be noted. In addition, one phone call per day to employee’s home is an allowable expense.

Lodging

Allowable lodging expense is limited to a reasonable amount for the geographic area. The original receipt showing itemized lodging charges must be submitted for the expense to be allowable.

Conference Registration & Similar Fees

Early bird discounts should be taken advantage of whenever possible.

In terms of which fiscal year an expense is charged – which is particularly relevant for faculty and other professional development fund use – only registration fees are included in the year in which the cost is paid.

All other costs (airfare, hotel, mileage, etc) are charged to expense (and professional development fund use) in the fiscal year in which the conference occurs.

A copy of event registration, agenda/schedule, and email confirmation of registration/attendance is not required unless an itemized receipt cannot be provided as documentation supporting the expense.

International Travel

College employees traveling outside the United States must notify the College insurance administrator prior to departure. Employees must also notify the insurance administrator of any non-College guests/associates traveling along as a matter of record; the College will not, however, provide insurance coverage for these travelers.

The College will not sponsor an employee or group to travel to those countries for which the federal government has issued a travel advisory, federal employees are prohibited from traveling, or for which special permission is required to travel.

Employees traveling outside of the U.S. and Canada are strongly advised to purchase comprehensive travel insurance at his/her own expense.

College will reimburse staff members for the cost of a passport and its related expenses if it has been specifically secured for the conduct of College business.

Required vaccinations will be reimbursed.

References: IRS Publication 17