When municipal employees travel on business, such as to attend conferences and training classes, generally you may only reimburse them for authorized expenses that they actually incur and are deemed necessary. By requiring travelers to document their expenses and follow set guidelines for reimbursement, you can cut costs and mitigate the risk of fraud.
Understand the Risks
Your governing board should provide guidance for managing travel and conference expenses to avoid any problems arising, such as:
- Failing to get required approvals for conferences
- Purchasing alcoholic beverages with taxpayer dollars
- Paying for travel for non-employees, such as spouses
- Extending trips after the end of conferences at taxpayer expense for personal reasons
- Missing or insufficient documentation of expenses incurred
- Failing to adequately audit travel reimbursement claims.
Maintain a Travel Policy
Your governing board should officially adopt a clear and thorough travel policy that applies to all employees and officers. The policy should:
- Describe the pre-approval process
- List expenses that typically are and are not reimbursable
- List maximum reimbursement rates
- Explain the reimbursement process, including requirements for submitting receipts and other supporting documentation
- Detail the claims auditing process
- Explain the rules if an employee extends business travel beyond the time required for a conference
- Explain the rules related to travelling with a spouse or other non-employee
(In some instances, reimbursements for conference and other travel expenses may be governed by collective bargaining agreements. In these cases, you should follow your travel policy unless there are differences stated in the collective bargaining agreement).
Follow Reimbursement Guidelines
Consider adopting federal lodging, meal, and mileage guidelines as your maximum rates for travel reimbursement. You can find these guidelines on the General Services Administration website.
Lodging rates and reimbursement
Tell employees to ask for the government rate when making reservations. Allow exceptions to maximum rates for special circumstances, but require the exceptions to be approved in advance. Examples of exceptions include when lodging is unavailable at or below the maximum rate, or if a specific traveler has requirements related to health concerns or handicapped access.
The governing board may either:
- Reimburse for actual and necessary expenses based on receipts provided by the employee; or
- Provide a fixed per diem allowance (not to exceed the standard meal allowance for business related travel prescribed for federal income tax purposes) payable regardless of what the employee spent on meals (see General Municipal Law §77-c).
If authorized by the governing board, employees who use their personal vehicles for business travel may receive a mileage reimbursement in lieu of actual and necessary vehicle expenses. The local government may link its mileage rate to IRS reimbursement rates for miles traveled. See the IRS website to find the rates.
Sales tax exemptions
Local government and school district employees who travel for official business purposes are exempt from New York State sales tax on hotel occupancy and should provide an exemption certificate, known as Form ST-129, at registration. This form is available on the New York State Department of Taxation and Finance website.
Cash advances for conference travel may be authorized by resolution of the governing board. If actual expenditures are less than the amount advanced, the employee should return the surplus upon submitting a travel voucher.
Standardize Claim Forms
Create standardized reimbursement forms, manual or electronic, that are easy to follow. Required information should include:
- The purpose and dates of travel
- Lodging and meal charges
- Mileage and other transportation costs such as tolls, parking and rental car costs
- A certification statement signed by the employee to attest to the accuracy of the information presented.
Use our sample form as a general guide and adapt it to your specific needs.
Employees should submit an itemized claim in a timely manner after returning from official business travel. Required documentation generally includes:
- An original, signed copy of your standardized travel form
- A copy of the approval form for travel or conference attendance
- Original receipts for all actual and necessary expenses
- A certificate of attendance or completion if travel was for a conference or training.
Auditing claims is required by law and is an essential internal control for ensuring that all employees follow travel policy requirements. The auditing body, usually the governing board, or an official (such as the town comptroller or county auditor) is responsible for auditing claims, including claims for reimbursement of travel expenses, prior to payment (except when a cash advance is authorized).
- Local Government Management Guide Travel and Conference Expense Management [pdf]
- Local Government Management Guide Improving the Effectiveness of Your Claims Auditing Process [pdf]