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Employee Expense report refresher. Top Ten Expense Reports Gaffes David Salchow, MDVA Internal Auditor 651-757-1548 david.salchow@state.mn.us. Resources for Expense Report preparation. MDVA Agency Resources: http://intranet.mdva.state.mn.us/forms/index.htm.

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employee expense report refresher

Employee Expense report refresher

Top Ten Expense Reports Gaffes

David Salchow, MDVA Internal Auditor

651-757-1548 david.salchow@state.mn.us

resources for expense report preparation
Resources for Expense Report preparation

MDVA Agency Resources: http://intranet.mdva.state.mn.us/forms/index.htm

resources for expense report preparation continued
Resources for Expense Report preparation continued..

Minnesota Department of Management and Budget: Employee Business Travel Expense Policies and Procedures: http://www.sema4.state.mn.us/htmldoc/eng/webhelp/hrpayrol.htm

resources for expense report preparation continued1
Resources for Expense Report preparation continued..

Labor Contacts and Compensation Plans:http://www.mmb.state.mn.us/compensation


And Now….

The Top Ten

Expense Report


10 direct billed expenses
#10 – Direct Billed Expenses
  • Usually hotels with a valid purchase order or contract with the State OR Enterprise Rental Car.
  • Please send invoices to Central Office (CO) Accounts Payable separately from your expense report. CO will pay the bill immediately.
    • Individual bills matched up against master billing in the Central Office
    • Please send as soon as available to ensure the bills are paid on time.
10 direct billed expenses continued
#10 – Direct Billed Expenses continued..
  • However, continue to indicate “DB” for hotel expenses, rental-car usage, and/or any other travel or lodging arrangements.
  • Continue to input mileage travelled, but not mileage reimbursement if using State car:
    • Substantiates the mileage travelled to justify overnight travel, meal entitlement or other travel expenses
    • Avoids confusion when processing reports – Clarifies why no mileage expense is claimed.
9 deadlines
#9 - Deadlines
  • For your expenses to be paid on your next paycheck, signed expense reports are due Noon the day after “Timesheet Tuesday.”
9 deadlines continued
#9 - Deadlines continued…
  • The $ total of expense reports processed 60 days after travel was completed are automatically added to your paycheck as a taxable, unpaid item. Meaning, you pay taxes on the amount as if it were income!
    • IRS Publication 15 (Circular E) of the Employer’s Tax Guide – NOT a State or MDVA requirement.
    • The Internal Revenue Service (IRS) requires employee business expenses to be submitted for reimbursement within 60 days after the expense is incurred. If not submitted within 60 days, the reimbursement becomes taxable for federal, state, FICA and Medicare; and withholding tax must be taken. The agency must match the FICA and Medicare tax paid by employees.
  • Date calculation automatically occurs in SEMA4 during expense report entry.
8 meal reimbursement claim when meals are provided by an event
#8 - Meal reimbursement claim when meals are provided by an event
  • Employees are only reimbursed for expenses actually incurred.
    • If a meal is included with the conference registration fee and the State pays the fee, then employee is not entitled to meal reimbursement.
    • No recent MDVA examples, but a County Veterans Service Officer recently reimbursed 104 meals from a conference funded by a State grant, and now the County has to repay over $1,500!
7 not signed by a supervisor
#7 Not Signed by a Supervisor
  • Expense reports must by signed by both the Employee and the Supervisor
6 exact locations needed
#6 Exact Locations needed
  • Whenever possible precise locations should be included to substantiate mileage reimbursement, meal and overnight stay entitlement.
6 exact locations needed continued
#6 Exact Locations needed continued..

Include full addresses on the expense report:

6 exact locations needed continued1
#6 Exact Locations needed continued..

Mapping and Driving Directions websites are excellent for documenting mileage and locations driven.

Any of these sites are perfectly acceptable:






6 exact locations needed continued2
#6 Exact Locations needed continued..
  • My personal preference is Google Maps:
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#6 Exact Locations needed continued..

Example from Google Maps continued..

6 exact locations needed continued4
#6 Exact Locations needed continued..
  • Print-out from Google Maps gives all the information needed!
6 exact locations needed continued5
#6 Exact Locations needed continued..
  • Google Street views are interesting to look at, but serve no real business purpose!
6 exact locations needed continued6
#6 Exact Locations needed continued..

Even private residences viewable!

David’s Residence: Harry’s Residence:

5 meal entitlements
#5 Meal Entitlements
  • Lunch: Must be traveling greater than 35 miles from your Permanent Work Location and traveling over your normal lunch hour.
    • Actual costs up to $9.
  • Breakfast: In addition to being the most important meal of the day, travel requires leaving your residence before 6:00 AM.
    • Actual cost up to $7.
  • Dinner: If travel requires you to arrive back at your residence after 7:00 PM.
    • Actual cost up to $15. (AFSCME $14)
  • Continuous travel status when overnight travel is required.
    • Meal costs may be combined not to exceed an amount equal to the total of all meal periods travelled. ($31 daily; $30 AFSCME)
    • Also, meal costs go into a different column on the expense report so the cost of the meals are not taxed as income.
4 receipts required
#4 Receipts Required

Original receipts are required in the following circumstances:

4 receipts required continued
#4 Receipts Required continued..
  • May file an Affidavit of Lost Receipts, if needed (but should not be a customary practice.)
    • Must be notarized – several MDVA notaries available
  • http://intranet.mdva.state.mn.us/forms/Receipt_Affidavit.pdf
3 special expenses
#3 Special Expenses
  • All employees are Special, but not all expenses are.
  • Special expenses are things not normally reimbursable to the employee.
  • Advanced approval is required. A statement of explanation must accompany emergency expenses, when advanced approval is impossible.
  • Examples of Special expenses:
3 special expenses continued
#3 Special Expenses continued..
  • You must follow Administrative Procedure 4.4 to have Special Expenses approved. http://www.sema4.state.mn.us/htmldoc/eng/webhelp/hrpayrol.htm
  • You must use a Special Expense approval form PE-00668: http://intranet.mdva.state.mn.us/forms/Special_Expense.pdf
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#3 Special Expenses continued..
  • Prohibited Expense Items:
2 combining business and personal travel
#2 Combining Business and Personal Travel
  • Only the Business portion of the expense can be reimbursed.
  • Using personal vehicle instead of flying is allowable, however, employee will be reimbursed the lesser of
    • The mileage amount, or
    • Airfare + ground transportation expense
2 combining business and personal travel continued
#2 Combining Business and Personal Travel continued..
  • Employee should “estimate” business portion and personal portion of the expense in advance and submit to Payroll for approval.
    • Under no circumstance should the total cost reimbursement exceed the estimated costof the business only amount/portion of the travel.
  • Example:
    • Reggie travels to Washington D.C. for Monday AM – Wednesday PM conference and wants to bring the family along to sight see
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#2 Combining Business and Personal Travel continued..
  • Personal use of State vehicle (Enterprise rental) is allowable under limited circumstances:
    • Employee is “on call.”
    • Employee is permanently assigned vehicle
    • More cost effective than leaving vehicle at permanent work location.
    • An authorized rideshare program has been established
  • The benefits obtained from personal use of a State vehicle IS considered taxable income and must be reported to payroll.
  • The “Commuter Rule” can be applied - $3 taxable income round trip.
    • Much more information at: SEMA4 Policy PAY0019: http://www.sema4.state.mn.us/htmldoc/eng/webhelp/hrpayrol.htm
1 the bermuda triangle
#1 The Bermuda Triangle

When an employee does not report to his/her permanent work location during the day or makes business calls before or after reporting to his/her permanent work location, the allowable mileage shall be:

  • the lesser of the mileage from the employee's residence to the first stop or from his/her permanent work location to the first stop;
  • all mileage between points visited on State business during the day;
  • the lesser of the mileage from the last stop to the employee's residence or from the last stop to his/her permanent work location.
1 the bermuda triangle continued
#1 The Bermuda Triangle continued…
  • NEW mileage rate beginning 1/1/2011: 51¢ per mile
  • Please use the “Veterans Homes Mileage Chart” in the Intranet when travelling between Homes.


David’s Travels around the State:

  • Google Maps can be used to conquer the Triangle!
1 the bermuda triangle continued1
#1 The Bermuda Triangle continued…
  • Also note 9 miles is the “Mileage chart distance” between MVH-M and CO!
1 the bermuda triangle continued2
#1 The Bermuda Triangle continued…
  • Note: The Veterans Home mileage chart shows 23 miles from CO to MVH-H, BUT David is only entitled to the lesser amount of 18 miles from his castle!
1 the bermuda triangle continued3
#1 The Bermuda Triangle continued…
  • Multiple stops during a business day.
    • Home to Mora
    • Mora to Federal Building
    • Federal Building to Home
  • The “lesser of” rule only applies to the first and last lag of the journey. All middle lags are actual miles travelled.