Expense reports and standard documentation of receipts

by | Nov 20, 2018 | Blog

corporate travel

Audits of travel costs (see FAR 31.205-46) will include examination of the contractor’s travel policies and procedures as well as the selective review of individual trips made by contractor personnel. Contractor’s should ensure that travel authorization procedures provide for documented justification and approval of the necessity of each trip, its duration, and the number of travelers involved.

The contractor’s procedures should provide for advance planning of travel to assure that:

  1. wherever feasible and economically practical, required visits to locations in the same geographical area are combined into a single trip,
  2. maximum use is made of the lowest customary standard, coach, or equivalent airfare accommodations available during normal business hours, and
  3. Individual trips should be reviewed to determine if
    •  the contractor is complying with its travel policies and procedures,
    • the trip is for an allowable purpose, and
    • the incurred travel costs are documented and allowable in accordance with FAR 31.205-46. In addition, an auditor would review the contractor’s accounting procedures to determine whether or not they provide adequate controls for segregating unallowable travel costs.

Necessary Documentation:  FAR 31.205-46(a)(7) states that costs are allowable only if the contractor maintains specific documentation to support claimed travel costs.  For claimed costs to be allowable, the following information must be documented:

  • (a) date and place (city, town, or other similar designation) of the expenses,
  • (b) purpose of the trip; and
  • (c) name of person on trip and that person’s title or relationship to the contractor.

Allowability of Per Diem Costs (Lodging and M&IE)

FAR 31.205-46(a) states that costs for lodging, meals, and incidental expenses may be based on (i) per diem, (ii) actual expenses, or (iii) a combination thereof, so long as the method chosen represents a reasonable charge. However, except for special or unusual situations, allowable costs are limited on a daily basis to the “maximum per diem” rates in effect at the time of travel set forth in the Government travel regulations as follows:

(1) Federal Travel Regulations, for travel in the conterminous 48 United States. These rates are available on the GSA web site www.gsa.gov under Policy.

(2) Joint Travel Regulations, for travel in Alaska, Hawaii, the Commonwealth of Puerto Rico, and territories and possessions of the United States.

(3) Department of State Standardized Regulations, Section 925, Maximum Travel Per Diem Allowances for Foreign Areas, for travel to foreign countries.

The Federal Travel Regulations, Joint Travel Regulations and Department of State Standardized Regulations treat certain costs related to the maximum per diem rates differently. The maximum per diem rate consists of lodging and M&IE (meals and incidental expense) rates. Keep in mind that the first and last day of travel for M&IE is only allowable at 75% of the maximum daily rate.

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