PowerPoint Presentation

Internal Audit

Travel & Entertainment

Expense/PCard Learning Session

October 2016

DRAFT – for discussion purposes only

General Note

This following references to the CWRU Business Policies are not intended to

replace the Business Policies on the CWRU website*:

http://www.case.edu/bizpolicies/ but to serve as a guide to common

observations we find during our review process.

DRAFT – for discussion purposes only

*Note – the references to the University Business policies in the subsequent pages are as of October 2016. As such, we

recommend visiting the University’s Business Policies website on a periodic basis to check for updates to the applicable policies.

FY16 T&E Material

DRAFT – for discussion purposes only

University Travel Policy – Two Necessary Starting Points

1. Policy requires that all travelers must be familiar with all relevant CWRU

policies prior to their trip to ensure full reimbursement of expenses. Lack of

awareness is not a valid rationale for out-of-policy spend.

2. Policy mandates that all travel is pre-approved by the traveler’s supervisor.

This should be done prior to advance booking, except under exceptional

circumstances. Internal procedures can be developed by an administrative

unit to support this as a matter of budgetary control. It is strongly

recommended that an email trail of pre-approval, at a minimum, be used

so there is no confusion about the trip and/or its budget after the fact.

DRAFT – for discussion purposes only

AMEX Travel and Expense Card

• As a preferred alternative to personal credit cards, CWRU offers travelers the

use of an American Express Travel and Expense Card. Among a number of

features, card expenses are paid directly to American Express and credited to

cardholder accounts once the card’s expense reports are approved in

PeopleSoft Financials. Cardholders have no adverse impact on their credit

(FICO) score for the card application or the card’s policy-supported use.

• Payments are sent via electronic funds transfer (EFT) each business day to

American Express. Over 99% of all card payments are successfully posted by

AMEX within three business days of AP approval.

• Cards must be limited to policy-supported business (no personal use)

• Payments must be made through the PeopleSoft Travel And Expense Module

DRAFT – for discussion purposes only

AMEX Travel and Expense Card - continued

• Payments for American Express T&E Card accounts in the PeopleSoft

Travel and Expense Module must have “Payment Type” designated as

“T&E Card (CWRU)” for payments to flow toAmerican Express for the

crediting of their account. Personal reimbursements and AMEX payments

can be included on the same report, as long as personal expense

reimbursements are designated with the “Personal Out-of-Pocket” payment

type.

DRAFT – for discussion purposes only

References to CWRU Business

Policies on Common T&E Problems

DRAFT – for discussion purposes only

Common Observation: Lack of Sufficient Documentation

Travel Policy

Per the University Travel Policy, reimbursements must include an explanation of the

business purpose for the expense and the receipt must detail the date, location, and

amount of the expense. Asufficient form of supporting documentation would be an

itemized receipt (e.g., hotel receipt detailing the date, location, number of nights, and the

cost per night plus tax).

DRAFT – for discussion purposes only

Common Observation: Spousal Meal/Travel Reimbursement

Travel & Meal and Entertainment Policy

Per the Meal & Entertainment Policy, generally, entertainment expenses for spouses or

spousal equivalents of University employees are not reimbursable. However, such

expenses may be reimbursable if the inclusion of the University spouse or equivalent

serves a bona fide business purpose (e.g., fundraising or recruiting).

Per the Travel Policy, no travel-related expenses for spouses, dependents, or other

persons accompanying employees on University travel will be reimbursed unless such

travel provides a clear and direct benefit to the University. The provost or chief financial

officer should approve the individual’s presence on the trip in advance.

DRAFT – for discussion purposes only

Common Observation: Lack of Business Purpose for a Meal /

Alcohol

Meal and Entertainment Policy

The Meals & Entertainment Policy requires meal reimbursements to include detailed,

original receipts as well as the following information:

• Date;

• List of items ordered (including alcohol) and gratuity paid;

• List of names, titles and affiliations of the individuals in attendance ― for groups of

more than 10 people, a general description of the group is sufficient; and

• The educational, business, or research purpose of the meal

Any alcohol expense incurred as part of the business meal must be charged to account

code 599020.

DRAFT – for discussion purposes only

Example of Leading Practice

Meals and Entertainment Policy requires meal reimbursements to include detailed, original

receipts as well as the following information:

The educational,

business, or research

purpose of the meal

The date

DRAFT – for discussion purposes only

Name of individual(s)

in attendance

List of items (including

alcohol) and gratuity

paid

Alcohol must be charged

separately to account

code 599020

Common Observation: Birthdays & Other Social Occasions

Meal and Entertainment Policy

The Meals & Entertainment Policy states that University funds cannot be used to sponsor

a gathering or function for employees in recognition of birthdays or other similar social,

non-business occasions. Expenses for entertainment must be related directly to or

associated with the active conduct of University business.

DRAFT – for discussion purposes only

FY16 PCard Material

DRAFT – for discussion purposes only

References to CWRU Business

Policies on Common PCard Problems

DRAFT – for discussion purposes only

Common Observation: Keeping Your PCard Confidential

PCard Policy

Per PCard Policy, cardholders are responsible for securing PCards in the same manner

that cash and checks are handled. Cardholders may not share or lend their PCard to

others and must keep the PCard number confidential.

DRAFT – for discussion purposes only

Common Observation: Lack of Monthly Reconciliations

PCard Policy

Per PCard Policy, monthly reconciliations are required. Leading practice is that

reconciliations be independently prepared and reviewed/approved in a timely manner. If

there is an error on the account, the cardholder must contact the supplier to resolve the

error or complete a “charge dispute form.”

DRAFT – for discussion purposes only

Common Observation: PCard Transactions Incurring Sales Tax

PCard Policy

Per PCard Policy, purchases made on PCards should not incur sales tax (in most states).

Cardholders are responsible for informing suppliers that the University is exempt from

sales tax or contacting the supplier to have the tax reversed after a purchase. Vendors or

suppliers who have not previously done business with the University may ask for a copy

of the University’s sales and use tax exemption form. Procurement Services maintains

these exemptions for a number of states, and can provide copies of the forms upon

request.

DRAFT – for discussion purposes only

Common Observation: PCard Used for Prohibited Purchases

PCard Policy

The PCard Policy restricts certain purchases on the PCard. The following includes

examples of commonly purchased items that are prohibited:

• Bulk office supplies

• Food and beverages (available on the DCard)

• Copier supplies

• Donations

• Furniture

Refer to Exhibit B in the PCard Policy for a complete list of prohibited categories.

DRAFT – for discussion purposes only

Common Observation: Splitting Transactions to Circumvent

Monthly/Single Transaction Dollar Limits

PCard Policy

The PCard Policy states that the relevant Finance Director and Procurement Department

will authorize a monthly credit limit as well as a single purchase dollar amount limit for all

PCards. Cardholders may not split a purchase into more than one transaction to

circumvent these dollar thresholds.

DRAFT – for discussion purposes only

Helpful Contacts

DRAFT – for discussion purposes only

Department / Topic Contact Phone

Compliance Lisa Palazzo 368-5791

Travel Services Michael Kurutz 368-6092

PCard Policy Mandy Carte 368-2595

PCard Administrator David Stout 368-4474

Procurement /

Accounts Payable

Mandy Carte

Judy Gilchrist

368-2595

368-0063