Table of Contents:
- Consistent Application
- Required Standards for Compliance
- Charging Travel and Related Business Expenses Directly to the University
- Commuting and Places of Work
- Point of Origin and Final Return for Travel
- Long Term Travel
- Continual Travel
- Sponsored Funds Travel
- Travel Compensated by a Third Party
- Frequent Traveler Programs and Travel Clubs
- Further Information
Business travel creates unique issues relative to other aspects of the workplace. Those who travel on behalf of the University hold a position of trust and responsibility. They work independently, represent the University to the outside community, and are authorized to spend University funds for travel. In contrast to this independence is the need to be accountable for spending University and public monies, which requires that the traveler:
- demonstrate integrity in making travel plans, especially in clearly separating costs for travel related to outside business interests or personal travel;
- accept responsibility to assure that travel costs are reasonable in the eyes of the University's various stakeholders, and to charge expenses to University accounts accordingly;
- expect that all travel expenses will be scrutinized and possibly disallowed if unreasonable or unallowable.
Clearly, the traveler must avoid extravagance. The budget and financial approvers will find that the traveler's latitude in making decisions is to be respected provided that the expenses incurred are allowable under policy and/or compliant with regulations applicable to the funds to which the expenditure is being charged. However, if upon review, expenses incurred by a traveler are deemed unreasonable (even if not specifically outlined in policy) or unallowable, the traveler may not be reimbursed or may need to make restitution to the University for those costs deemed to be unreasonable or unallowable.
The personal safety of the traveler, the wise use of the traveler's time, and the practical aspects of the itinerary are all to be considered in the determination of travel plans. Travel must be planned to ensure University funds are spent prudently, and travelers must exercise care to avoid impropriety.
Travel expenses are to be reimbursed uniformly throughout the University. This policy applies to all University employees, students, guests, and visitors whose travel is paid by the University. Adaptations needed to meet unique situations will be permitted if consistent with the prevailing principles that no unnecessary cost is to be charged to a University budget, that no personal costs are to be paid by a University budget, and that the adaptation does not contradict any provision within this policy.
The University assumes no obligation to reimburse employees, students, and nonemployees for expenses that do not comply with the principles of this policy. Expenditures that do not comply with the University travel policy will be the obligation of the traveler. Additionally, travelers who continually misuse or circumvent the principles of the policy will be subject to additional requirements for documentation and restricted use of any Penn State Purchasing Card privileges.
This travel policy complies with the requirements of the many entities served by Penn State. The standards to be met include those of the Internal Revenue Service (IRS) and of federal, state, and nongovernmental sponsors. Excerpts from several of the governing regulations are referenced throughout the policy.
IRS Accountable Plan
For travel reimbursement to be excluded from a traveler's taxable income, the traveler must comply with the requirements of the Employee Reimbursement System (ERS).
- Reimbursement for meal expenses when no overnight travel is involved requires that the meal reimbursement be reported to the IRS as taxable income to the employee unless sufficient University business is conducted during the meal to satisfy the requirements for a business group meal or meeting. A business group meal or meeting must have a clearly defined University business purpose and be reported on a business group meal form.
- The IRS requires that any advance outstanding for more than 60 calendar days after completion of a trip is taxable as income to the traveler.
Office of Management and Uniform Guidance 2 CFR 200
2 CFR Part 200 - UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS, also referred to as the Uniform Guidance establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. All federal agencies that sponsor research and development, training, and other work at educational institutions shall apply the provisions of the Uniform Guidance in determining the costs incurred for such work. The Uniform Guidance 2 CFR 200.474 addresses travel expenses specifically and this policy is designed to comply with the required standards. An individual's travel can only be paid on a federally-sponsored award if the participation of the individual is necessary for the award and the costs are a direct results of the individual's travel for the federally sponsored award. Documentation should be maintained clarifying why the particular person is traveling, why the travel is necessary and how it benefited the project.
It is possible that the specific terms and conditions of an agreement will be more restrictive than the Uniform Guidance 2 CFR 200 cost principles. It is important for the traveler to review the terms and conditions of each agreement before a trip. If there is a question concerning the allowability of the trip, the traveler must contact the Financial Officer or Research Administrator for guidance.
All University employees must comply with U.S. laws and regulations when traveling internationally on University business, including all U.S. laws and regulations governing the export of controlled materials, software, technology, data and services. It is recommended, therefore, that an export review be obtained prior to commencement of any international travel. For international travel in support or furtherance of a sponsored research effort, whether or not such travel is reimbursed directly under a sponsored research restricted account, an export review may be obtained by contacting the Office of Sponsored Programs (Export-OSP@psu.edu). For all other international travel, an export review may be requested from the University Office of Export Compliance (Export@psu.edu). No export review is required for employees traveling internationally on personal vacation or attending conferences or other events solely at their own personal expense. However a review is required if the University or any third party contributes to funding any costs associated with the travel, including, but not limited to, salary reimbursement, travel expenses or incidental expenses. Failure to comply with any applicable U.S. Export Laws and Regulations may result in personal civil and/or criminal liabilities for the traveler, up to, and including, debarment, fines and/or imprisonment.
Fly America Act
U.S. law, 49 U.S.C. 40118, known as the Fly America Act, requires travelers whose air travel is being financed by the U.S. government to use U.S. flag air carrier service for all international air travel when available. The Federal Travel Regulations Sections 301-10.131 through 301-10.143 define U.S. flag air carrier service and provide exception criteria for the use of non-U.S. flag air carrier service. See the "Foreign Travel" section of this policy for further details.
Immigration and Visa Regulations
International visitors require special processing of permits in order to comply with federal immigration and IRS requirements. All visitors must complete a Non-Employee Information Form PRIOR to travel. The University is not permitted to reimburse noncitizens that cannot document compliance with federal immigration and IRS Visa requirements. See "Non-U.S. Citizen Payment Guidelines" for more information.
Assistance with these issues is available from the Office of Human Resources, the Office of Global Programs, Accounting Operations, and the University Tax Manager.
Entertainment expenditures are prohibited except in the most unusual circumstances. To qualify for reimbursement, entertainment expenditures must be clearly identified by the designated Budget Executive to be in the best interest of the University and may only be charged to unrestricted miscellaneous funds.
Under no circumstances is it permitted to entertain U.S. government employees, as such is prohibited by federal law.
No one is authorized to have travel and related business expenses directly billed to the University other than Travel Services, Procurement Services, and Purchasing Card users. Only a duly authorized University official may sign travel-related agreements or contracts.
Commuting to work from one's home is not classified as business travel, and is not normally eligible for reimbursement. If an employee is assigned to two customary places of work in one day, the transportation to go directly from the first place to the second may be reimbursable at the budget administrator's discretion. Requests for reimbursement for permitted local travel should be managed through a log detailing local trips and should only be submitted when total reimbursement is $25 or more, or when mileage incurred during a fiscal year must be settled for year-end closing processing. Budget administrators have the authority to limit local mileage reimbursement.
The IRS provides standards that define the beginning and end of business travel. These standards are useful in determining whether mileage from one's home or office is to be used when reporting mileage for reimbursement.
- The traveler's home or customary workplace, whichever is last visited before commencing the trip, shall be used as the point of origin when computing transportation costs while on travel status.
- The traveler's home or customary workplace, whichever is first visited after completing the trip, shall be used as the point of final return when computing transportation costs while on travel status.
NOTE: Travel status assumes that the employee has an overnight stay. If an employee travels from home to another location, and then continues on to their primary work location during the day, only the additional mileage incurred beyond the normal commute is reimbursable.
In cases of an extended travel stay in one location, it may become financially advantageous to the University for the traveler to procure alternative living arrangements to hotels and restaurant meals. In this case, actual expenses may be used instead of CONUS meal per diems and OCONUS meals and lodging per diems. With the approval of a traveler's Budget Administrator and Financial Officer, it is permissible for a traveler to procure long-term living arrangements based on actual expenses that would not exceed the per diem allocation.
Employees who need to travel on a continuous basis (such as Agricultural Extension Educators) or on extended travel may settle their expense accounts every 30 calendar days. The traveler must work with the Financial Officer to justify the need, arrange for funds to be provided, and handle any special arrangements that may be required for reimbursement.
All travel costs charged to grants and contracts must be reasonable and comply with policies established by Penn State, the sponsoring agency, and the Uniform Guidance. Travel policies of federal and nonfederal sponsors vary. The specific terms and conditions of an award must be consulted before making any travel arrangements. In the event there is a conflict between a sponsor's rule and Penn State's rule, the more restrictive rule applies. When in doubt, the traveler should consult the Financial Officer or Research Administrator.
The Uniform Guidance 2 CFR 200.474 addresses travel expenses specifically and this policy is designed to comply with the required standards. An individual's travel can only be paid on a federally-sponsored award if the participation of the individual is necessary for the award and the costs are a direct results of the individual's travel for the federally sponsored award. Documentation should be maintained clarifying why the particular person is traveling, why the travel is necessary and how it benefited the project.
In the event that the trip is completed in the last month of a sponsored agreement, expenses must be submitted within 30 calendar days of trip completion to allow for submission of the final financial report.
When Penn State travel is combined with non-Penn State travel, the employee is responsible for documentation to show that Penn State did not incur any costs greater than what would have been incurred if only the Penn State portion of the travel had occurred. If a third-party offers to pay for shared travel costs, such as airfare, the employee should accept such reimbursement on behalf of the University, even if no additional cost was incurred. The goal of the employee should always be to minimize the cost to the University, especially when combined with non-Penn State business travel.
In addition, if the trip includes both Penn State and non-Penn State business travel, costs need to be appropriately allocated for the non-Penn State business portion of the trip. Penn State will not pay or reimburse for travel costs incurred for non-Penn State business travel, including private consulting, which produce incremental costs beyond those required for the Penn State portion of the trip. The employee must provide documentation showing how the total trip breaks down between Penn State vs. non-Penn State business (for example, by days) to assure appropriate allocation. Financial Officers have the authority to request additional detail as needed to assure that Penn State does not incur any incremental costs over and above those that would have been paid for the Penn State business trip alone.
Any travel reimbursements received from a third party for a trip which is also being fully or partially reimbursed by Penn State must be reported in ERS with adjustments, as appropriate, to the per diem and other travel expenses claimed. If an employee receives payment from a third party, it is the responsibility of the employee to get clear documentation from the third party regarding what the payment covers. If honorarium is received for conducting a program, and the University is paying for any of the associated travel costs, the amount of honorarium must be disclosed to the budget administrator, who has the authority to limit travel reimbursement paid by the University based on purpose of travel and compensation received.
Travel awards from airlines, hotels, car rental agencies and other providers earned while on University business may be retained by the traveler for future University travel or for personal travel. Travelers will not be reimbursed for their use of travel awards nor will they be reimbursed for memberships in travel clubs or special programs to obtain travel rewards. The selection of an airline, hotel, rental car, or other provider shall not be based solely on the traveler's ability to earn rewards from that provider. Any cost passed on by the vendor to the traveler for earning those rewards will not be reimbursed.
The TSA Registered Travel Service, and any related services to expedite airport security, will only be paid if there is a strong business justification which has been approved by the budget executive. These expenses are not permitted on general funds or federal funds and may only be paid from unrestricted miscellaneous funds.
For questions, additional detail, or to request changes to this policy, please contact the Office of the Corporate Controller.
Effective Date: July 1, 2015
Date Approved: July 1, 2015
Date Published: July 1, 2015
Most Recent Changes:
- July 1, 2015 - Updated to reflect travel changes per the implementation of the OMB Uniform Guidance, air travel upgrades, etc . Edits include:
- Revision to Office of Management and Uniform Guidance 2 CFR 200;
- Addition of an Export Control section
- Clarifications to Immigration and Visa Regulations
- Clarifications to Commuting and Places of Work
- Clarifications to Sponsored Funds Travel
Revision History (and effective dates):
- October 24, 2013 - Editorial changes. Addition of policy steward information, in the event that there are questions or requests for changes to the policy.
- July 30, 2012 - removal of references to the DBAF, as effective July 1, 2012, the DBAF is no longer a payment option for travel. Clarification of reimbursement of noncitizens verbiage in "Immigration and Visa Regulations."
- January 1, 2010 - Policy migrated back from the Travel Services website to the Policy section of GURU, with revisions per ONR.
- January 1, 2007 - New policy (published on Travel Services website, not on GURU)