UAF Travel Reimbursement and Audit Processes

UAF Travel Reimbursement and Audit Processes March 2016

Introduction Through the Travel Process Improvement effort, it has become clear that the current travel process imposes an unsustainable administrative burden, is time-intensive for staff centrally and in units, and is frustrating for our travelers. Our current fiscal climate has led to reduced level staffing levels and calls for more efficient processes in all areas. This further calls for a review of the cost vs. benefits of controls and an assessment of an appropriate level of tolerance and mitigation. The TRIP team recommended moving to an audit-only role centrally, reducing the time and effort involved in processing reimbursements. This change will also allow UAF central travel to conduct regular trainings for travel coordinators and departmental staff, improving compliance without adding processing time. The proposed processes below are designed to outline appropriate audit standards that reflect a balanced approach to risk, and to establish clear expectations of the audit outcomes. The revised reporting model will more accurately reflect units’ compliance with UA Travel Regulations. For example, in the first quarter of FY16, 139 (18 percent) of the identified errors with expense reports were incorrect account codes. While it is certainly important to correctly account for our expenditures, such errors would now be addressed in the “best practices” section of the audit report, rather than in the regulations violations section. When combined with the critical regulation changes proposed, we could see a reduction in our “incorrect” expense reports of over 50 percent while still ensuring appropriate controls and risk. Reimbursement Process 1. Travel Authorization includes supporting documentation and receives needed approvals (Attachment I). 2. Travel occurs. 3. Traveler/Travel Coordinator prepares Travel Expense Report. a. If Expense Report is within 10 percent or $100 of approved TA, whichever is greater, only traveler must approve and sign, once proposed regulation is approved. 4. Expense Report is submitted to Financial Services for issuance of payment (keying). No review of expenses will occur at this point. a. If there are any errors that prevent keying/payment (Attachment 2) then Financial Services will contact Traveler and Travel Coordinator for needed information. 5. Traveler receives reimbursement via direct deposit.

of 8 Audit Process 1. Financial Services will conduct monthly audits of expense reports, after reimbursements have been issued. Note: this can move to quarterly once the process is established and we are demonstrating compliance with regulations. a. Audits will include a percentage of all expense reports by Vice Chancellor/Provost or Unit level, as well as targeted high risk areas (such as international travel). 2. Financial Services will produce an audit report that organizes findings by unit, identifying: a. Violations of UA Travel Regulations (Attachment 3) b. Best Practices (e.g. account codes) c. Discussion (including any trends or areas of university-wide concern). c.i. Reports will include the TA/ER number of the audited reports, and the errors identified. 3. The audit reports will be provided to the relevant Vice Chancellor/Provost and Dean/Director. a. The relevant Dean/Director is responsible for compliance within their unit. b. If a unit has UA Travel Regulation violations in more than 10 percent of their audited expense reports in a given month, they will be placed on a watch list. b.i. If a unit on the watch list has UA Travel Regulation violations in more than 10 percent of their audited expense reports for two consecutive months, they will prepare a performance plan to identify how they will ensure compliance in future audits. This performance plan will be discussed with the Associate Vice Chancellor for Financial Services and the Travel Administrator. b.ii. If the performance plan fails to improve compliance after an additional monthly audits, the unit will reorganize their travel processing (such as by partnering with a unit that has a successful record or by joining a successful shared service center). b.iii. If a unit is placed on the watch list three times, they will reorganize their processing. b.iv. When a unit consistently demonstrates a high degree of compliance with UA travel regulations (less than 10 percent of expense reports have errors) for three consecutive audit periods, they will be designated a Tier One unit and move to a quarterly audit schedule.

of 8 4. If, in the course of an audit, it is discovered that a traveler was reimbursed for more than the allowable costs, the following will apply: a. For over-reimbursements less than $50, the unit has discretion on whether to collect the difference from the traveler. Over-reimbursements cannot be expensed to a restricted fund; those must be collected or Jv’d to a fund one. b. For over-reimbursements greater than $50, the unit will collect the difference from the traveler. c. For under-reimbursements discovered during an audit, the unit may elect to submit a new expense report to claim the expense(s) not originally reported. 5. Units will have 5 business days to respond and submit additional information for audit findings. Responsibilities Traveler: The traveler is responsible for accurately reporting their allowable expenses in accordance with UA Travel Regulations, identifying the purpose of travel, identifying any personal travel taken in conjunction with business travel, and providing business justifications and documentation in accordance with UA Travel Regulations. The traveler is also responsible for signing up for direct deposit via the Finance tab of UA Online (note: this is currently a separate process from direct deposit of paychecks). Travel Coordinator: The travel coordinator is responsible for assisting the traveler in completing travel authorizations and expense reports (or, in some units, completing the reports on the traveler’s behalf), for ensuring the accuracy and compliance with UA travel regulations of those authorizations and expense reports, for providing information to the travelers regarding UA Travel Regulation and best practices, serving as a point of contact between the unit and Financial Services, and in assisting the traveler in procuring travel. Travel Administrator: The travel administrator is responsible for conducting the duties of their position as outlined by the UA Travel Regulations, and in conjunction with the travel auditor, preparing audit reports. The Travel Administrator is also responsible for developing and delivering training to travel coordinators. Travel Auditor: The travel auditor is responsible for conducting travel audits as outlined in the above procedures, and in conjunction with the travel administrator, preparing audit reports. Dean/Director: The dean or director is responsible for ensuring compliance within their unit with UA Travel Regulation.

of 8 Attachment 1. Travel Authorization Documentation and Approvals

When the following information and approvals are secured at the Travel Authorization stage, expense reports, once proposed regulation is approved, within 10 percent or $100 (whichever is greater) of the authorized amount may be reimbursed without re-approval by the supervisor or individual with authority to expend funds. 1. Business-only estimate: Authorizations will include an estimate for the business-only cost, including as applicable:

o air itinerary based on business days, showing class of service, and amount

o business nights in hotel and hotel rate (if rate is greater than 150 percent of published per diem rate, noting why higher rate is needed- e.g. “conference hotel”),

o per diem rate for business days, at business destination rate,

o vehicle rental for business days (showing standard size, or noting why larger is required)

o conference program or meeting agenda

o registration fees

2. Clearly defined business purpose: A single sentence is sufficient, a single word is not. For example, instead of “conference,” note “Annual AGU meeting,” or instead of “field work” note “conducting interviews with whaling captains in Point Hope.”

3. Any personal travel taken in conjunction with business travel is clearly identified

4. Approvals in accordance with UA Travel Regulations before any university resources are committed (additional approvals may be required to comply with UA travel restrictions).

of 8 Attachment 2. Travel Reimbursement Keying Checklist

The following errors on an expense report prevent the reimbursement from being keyed for payment:

 A mismatch on the traveler (the traveler’s name does not match the ID, the travel authorization (TA), the travel expense report (TER), or the encumbrance)  For check payments, a missing address  A missing date of birth and/or address, needed when ID is not listed on TA or TER  Missing or closed encumbrance  If there is a mismatch between an advance listed on the expense report and in Banner  Missing attached backup (TEM)

of 8 Attachment 3. Audit Checklist

Categ Audit Questions Documentati Potential UA ory on Needed Audit Finding Travel Reg. Reference Appro Was the TA -Approved -Approvals A.3.a vals approved before university TA missing or not A.13.a resources were committed? -For out of obtained prior to A.14.a Were the needed state or international commitment of approvals obtained for the travel, approved by university resources type of travel? individual designated (Reg. Violation) by Chancellor

Perso Is the traveler’s - -Best - nal name, UA ID, and address practice Information correct? Accou Are account codes - -Best - nt codes correct? practice Dates Do the dates on the -Airfare - A.1.b. itinerary (airfare/car rental) itinerary/receipt Reimbursement for (7) match the business -Car rental business purposes; A.3.c. purpose? agreement/receipt direct route (Reg. (2) Is personal travel -Conference Violation) A.4.d. time identified? program A.5.a -Hotel folio/receipt Destin Does the - ation destination match the Reimbursement for business purpose? business purposes (Reg. violation) Purpo Is the purpose -One - A.13.b. se clearly stated? sentence noting Reimbursement for business purpose business purposes (e.g. “Attending AGU (Reg. violation) meeting/conference, ” not, “conference” Perso Is personal travel -Business - A.5.a nal Travel clearly identified? only comparison Reimbursement for Was reimbursement business purposes for business travel only? (Reg. violation) Unaut Are there any -Business - horized unauthorized expenses (e.g. justification if Unauthorized expenses expenses for family claiming expenses (Reg. members accompanying reimbursement violation) traveler)? Non- Are all expenses -Receipts for -(Reg. A.2.a reimbursable allowable per UA Travel expenses greater violation) A.2.

of 8 and Regulation? than $25 (currently) reimbursable Are non- expenses reimbursable expenses identified? Are reimbursable expenses appropriately allocated to the traveler? Airfar Does the schedule -Airfare -Direct A.3.b e match the business need? itinerary/receipt route A.4.a Is the class of -If non- -Business A.5. seating allowable? coach, ADA dates Is the airfare accommodation note -Class of compliant with FlyAmerica, -When seating if applicable? airfare credits or “my -FlyAmerica Are all expenses wallet” funds are (Reg. allowable? used, include original violations) purchased itinerary or mileage activity

Rental Is the rental car for -Rentals Rental car A.4.b Car a UA employee? larger than size and allowability A.5. Is the size of car in “standard” require (Reg. Violation) accordance with justification, e.g. regulations? multiple travelers, transport of supplies, etc. Milea Does the -Either (Reg. A.4.c ge reimbursement match the odometer readings Violation) business destination? or supporting Is the mileage rate documentation such equal to or less than the as a screenshot from approved rate? Google Maps or Mapquest Other A.4.f. transportation Lodgi Is the lodging rate -Hotel Allowable A.3.c. ng either within the approved folio/receipt lodging rates (Reg. limits or supported by a -Reason for Violation) justification and approval? exceeding 150% If non-commercial noted (e.g. lodging is expensed, is it “conference hotel”) within approved limit? Per Does per diem rate -Hotel Per diem A.6. Diem match the destination folio/receipt (Reg. Violation) A.7. (based on lodging)? -Conference Are provided meals program, if deducted? applicable

of 8 Do periods claimed -Itinerary match time in travel status? (e.g. airfare receipt) Travel If travel advances Advances A.12. advances were provided, were they (Reg. Violation) noted on the expense report? Group Is backup included - Signed A.6.g. travel for alternative meal/lodging statement from arrangements? group members for amounts or meals received. List of names and amounts signed by each group member when cash is handed out Intern Is any international -Rate Currency A.14.a. ational currency converted calculation based on conversion (Reg. (5) currency correctly? the date an expense Violation) was incurred Recei Are receipts legible? -Receipts Receipts A.14.b pts Are receipts with notations as (Reg. Violation) A.14.a. provided for expenses needed (if faint, (5) greater than $25? write in amount, if in Do foreign receipts foreign language, have an annotation in write in brief English (e.g. “taxi” written explanation of cost) in)? Do receipts match reported expenses?