Sparta Consulting, Inc. Travel and Expense Policy
Table of Contents 1. TRAVEL AND EXPENSE POLICY... 4 1.1 Purpose... 4 1.2 Scope... 4 1.3 Policy... 4 1.3.1 Principles... 4 1.3.2 Travel Expense Tax Implications... 4 1.3.3 Accountabilities... 5 1.3.4 Compliance... 5 1.3.5 Privacy... 5 2. GENERAL TRAVEL... 6 3. AIR TRAVEL... 7 3.1. Airline Class of Service... 7 3.2. Lowest Airfare Definition... 7 3.3. Frequent Flyer Programs and Upgrades... 7 3.4. Denied Boarding Compensation... 7 3.5. Unused / Voided Airline Tickets... 7 3.6. Lost or Excess Baggage... 7 3.7. Emergency/En Route Changes... 8 4. VEHICLES... 9 4.1. Car Rentals... 9 4.2. Vehicle Size... 9 4.3. Vehicle Use Policy for all drivers of Sparta Consulting, Inc.... 9 4.4. Rental Car Accident Process... 10 4.5. Rental Club Memberships... 10 4.6. Personal Car Usage... 10 4.7. Cell Phone/Hand Held Device Use Policy... 10 5. OTHER TRAVEL... 13 5.1. Ground Transportation... 13 5.2. Transportation Other... 13 6. LODGING... 14 6.1. Hotel Accommodation... 14 2
6.2. Corporate Housing... 14 6.3. Hotel Frequent Guest Programs... 14 7. MEALS... 15 8. OTHER EXPENSES... 16 8.1. Reimbursable Incidental Travel Expenses... 16 8.2. Non reimbursable Incidental Travel Expenses... 16 8.3. Immigration Expenses... 16 8.4. Relocation See Separate Policy... 17 8.5. Miscellaneous Expenses... 17 9. EXPENSE PROCESSING GUIDELINES... 18 9.1. How to complete... 18 Appendix A... 19 Appendix B... 20 3
1. TRAVEL AND EXPENSE POLICY 1.1 Purpose To provide the company policy, standards and procedures for reimbursing employees for legitimate business expenses. Policies, procedures and standards are necessary for cost control, effective reporting of financial results and to meet government taxation requirements. 1.2 Scope This policy applies to all employees and subcontractors of the company who have incurred expenses on behalf of Sparta Consulting (Sparta). 1.3 Policy This document describes the expense guidelines that have been implemented at Sparta Consulting. Employees will be reimbursed for ordinary and necessary expenses incurred on behalf of Sparta Consulting in accordance with this policy and procedures. 1.3.1 Principles The following principles will apply to all expense claims: All expenses must have relevance to Sparta business activity. All expenses must be approved by a designated approving manager. The approving manager may be a Project Manager if you are on a project, or its equivalent if you are on a staffing assignment without an assigned Sparta Project Manager. Copies of receipts and approvals will be maintained. Sparta Consulting preferred suppliers will be used to maximize the company s ability to negotiate discounted rates and reduce travel expenses. 1.3.2 Travel Expense Tax Implications When a traveler s work assignment away from home is expected to last for more than one year, the assignment is treated as indefinite. Indefinite travel reimbursable business travel expenses related to this assignment must be treated as taxable income to the traveler. This income is subject to gross up for applicable federal, state, and local taxes that must be withheld from the reimbursement and included on their Annual Wage and Tax Statement (Form W-2). Travel expenses must meet certain criteria to be considered deductible by Sparta. Sparta reimburses only reasonable and necessary business travel expenses incurred in the pursuit of business while: The traveler is in transit, excluding normal commuting, to or from the employee s bona fide residence (tax home). The traveler is in transit between business locations. 4
To determine if your assignment and related expense apply to the above tax implications, contact the appropriate accounts receivable designee or Project Planner. 1.3.3 Accountabilities Employees are responsible for ensuring familiarity with, and application of this policy and procedures. Approving Managers are accountable for ensuring that approved expense claims meet the requirements of this policy and procedures. This includes responsibility for accurate and diligent review of expense claims for compliance. 1.3.4 Compliance Employees, who do not comply with this policy, may be subject to delay or withholding of reimbursement. The company assumes no obligation to reimburse employees for expenses that are not in compliance with this policy. No employee is authorized to approve or agree to pay for expenses that are personal in nature. Other than approved per diem expenses, no employee is authorized to approve flat amounts of expense allowances that would be construed as taxable income. Reimbursements that are personal in nature are considered compensation to the employee and should not be included on expense reports as they will not be paid. 1.3.5 Privacy To protect their privacy, employees are entitled to black out any personal information on documentation supporting these expense reports such as personal credit card numbers or other details in invoices for purchases or services that reflect personal information of any kind. These expense reports are not normally treated as files including personal information and may not necessarily be protected by Sparta Consulting privacy management practices. 5
2. GENERAL TRAVEL Travel arrangements must be made through the preferred travel supplier. All travelers are required to complete a travel profile and ensure that updates and changes are communicated to the designated travel coordinator. All travel expenses must be paid with a personal credit card. Submitted travel expenses must be the expenses of the submitter, and not claimed on behalf of another Sparta Consulting employee. All expense travel claims must be supported by a physical boarding pass. In situations where an employee is asked to pre-book travel well ahead of the departure date in order to obtain a lower fare there may be a requirement for the expense to be reimbursed prior to the departure date to avoid credit card interest charges. These situations must be pre-approved as an exception to this policy. 6
3. AIR TRAVEL Travelers should make air travel reservations as far in advance as possible to obtain the lowest fares. Please refer to Section 2 for information on reimbursement of reservations that must be paid prior to departure date. 3.1. Airline Class of Service Sparta Consulting will only reimburse for Economy class of travel. 3.2. Lowest Airfare Definition In all cases, Sparta Consulting authorized travel agency will offer the lowest available fare at the time of booking. It is the obligation of every employee to choose the least expensive flight from all alternatives offered by the authorized travel agency. 3.3. Frequent Flyer Programs and Upgrades The company will not reimburse for upgrades. The selection of airlines, and their respective routes, is based on the requirements of the company. Therefore, selection of airlines, routes, and airfares due to memberships and upgrades, should not result in higher cost to the company or non-use of preferred vendors. The company will not reimburse airline club membership costs. 3.4. Denied Boarding Compensation Airlines occasionally offer free tickets or cash allowances to compensate for delays and inconveniences due to overbooking, flight cancellations, etc. Travelers may volunteer for denied boarding compensation only if the delay in their trip will not result in any interruption to or loss of business for the company (e.g. end of work week). Travelers who are voluntarily, or involuntarily, denied boarding may keep the free travel vouchers for personal use. The company will not reimburse employees for the use of these vouchers on Sparta Consulting business. 3.5. Unused / Voided Airline Tickets Unused airline tickets or flight coupons must never be discarded or destroyed as these documents may have a cash value. To expedite refunds, unused or partially used airline tickets must be applied to the next trip taken by the traveler. Travelers should NOT include unused tickets with their expense reports. The travel agency (or person who arranged the travel) must immediately be contacted for further instructions on how to expedite electronic or paper ticket refunds in order to ensure the employee credit card is credited where applicable. Due to frequent changes in non-refundable ticket rules, the agency should be notified as soon as the trip is cancelled to preserve any ticket value. Unused, or partially used, paper airline tickets may need to be returned to the travel agency for credit card refunds. Air Travel expense claims must be supported by a physical boarding pass and the airline ticket or the electronic invoice. 3.6. Lost or Excess Baggage Ultimate responsibility for retrieving and compensating lost baggage lies with the airlines. The company will not reimburse travelers for personal items that are lost while traveling on business. Measures that can be taken to minimize baggage losses include the following: Laptops must be kept on the person and kept in sight at all times. 7
Always carry important and/or confidential documents on board the aircraft. Employees will be reimbursed for excess baggage charges only in the following circumstances: When traveling with heavy or bulky materials or equipment necessary for business. The excess baggage consists of company records or property. 3.7. Emergency/En Route Changes Travelers may use the designated agencies 24-hour emergency phone numbers for changes / bookings while in transit or after normal business hours. Any cost associated with changes made due to personal preference or non-business related need will not be reimbursed. 8
4. VEHICLES 4.1. Car Rentals Rental car must be justified as an economical need and will only be issued to licensed drivers. All rentals must be at the lowest possible corporate rate per day as offered by the designated travel agency. The designated travel agency should be used at all times for car rental arrangements Sparta Consulting expects its employees to obey all road and driving regulations and will not pay for any traffic violation charges. In order to keep fuel costs to a minimum, please exercise best judgment on the most cost effective option to insure vehicle s fuel tank is full upon end of rental. Often times, rental car agencies will not always offer the most cost effective rate to automatically refuel the car. 4.2. Vehicle Size Compact size cars should be used when traveling on business. The difference of rates for a premium vehicle rental will be at the employee s own expense. 4.3. Vehicle Use Policy for all drivers of Sparta Consulting, Inc. This policy applies to: Vehicles owned, leased or rented to Sparta Consulting, Inc. Personally owned vehicles driven by employees on behalf of Sparta Consulting, Inc. The following policy has been established to encourage safe operation of vehicles, and clarify insurance issues relating to drivers and Sparta Consulting, Inc. All drivers must adhere to safety policies included vehicle use and cell phone/hand held device use policy. All drivers must have a valid driver s license. Motor Vehicle Records will be checked periodically. Driving privileges may be suspended or terminated if your record indicates an unacceptable number of accidents or violations. Should your record fall into our insurance carriers guidelines of an, unacceptable driver, your employment may be terminated. Your supervisor must be notified of any change in your license status or driving record. See Appendix A for Evidence of Automobile Coverage for Employees Renting Vehicles on Company Business. When operating your own vehicle for Sparta Consulting, Inc. business: Your Personal Auto Liability insurance is the primary payer. Sparta Consulting, Inc. s insurance is in excess of your coverage. You should carry at least $300,000 per occurrence liability coverage. Evidence of insurance coverage is to be provided to Sparta Consulting, Inc. each year, by either a copy of your policy s Declaration page or a Certificate of Insurance. Sparta Consulting, Inc. is not responsible for the Physical Damage to your vehicle. You must carry your own Collision and Comprehensive coverage. Report mileage for expense reimbursement. 9
If in an accident: Take necessary steps to protect the lives of yourself and others. Comply with Police instructions. Do not assume or admit fault. Others will determine liability and negligence after thorough investigation. Report the accident to Sparta Consulting, Inc. as soon as possible. 4.4. Rental Car Accident Process Should a car rental accident occur, travelers should immediately contact: 1. Local authorities as required (keep a copy of the accident report and number). 2. The car rental company in order to complete the appropriate forms. 3. Sparta Consulting s HR Department. 4.5. Rental Club Memberships Travelers may participate in rental car club membership programs that are free of charge or at their own expense. The company will not absorb rental car club membership costs. 4.6. Personal Car Usage The company expects employees to transport themselves to and from their normal place of work (Sparta Consulting office or client site) and to pay for any associated expenses (e.g. fuel, transit fares, parking, etc.). Given the nature of our business, it is recognized that employees may have to leave their normal place of work and travel to other client sites. In this event, the company will reimburse the employee at a rate of $0.41 per mile for using his/her personal automobile, plus any parking fees. Employees are only permitted to claim the lower of the distance from the Sparta office to their destination or from their home to their destination. The mileage rate covers all operating costs including gas, oil, personal property and liability insurance. It is the responsibility of each employee to keep their personal insurer informed of the proper use of their vehicle (personal vs. business use). On expense reports, daily computation should include the date of travel, departure and arrival locations and the total round trip mileages. As indicated above, the company expects employees to transport themselves to and from home and work (Sparta Consulting office or client site) and to pay for any associated expenses (e.g. fuel, transit fares, parking, etc.). Employees are responsible for their own cost of daily parking at their normal place of business. 4.7. Cell Phone/Hand Held Device Use Policy Our Company recognizes that the employees are our most valuable asset, and the most important contributors to our continued growth and success. Our Company is firmly committed to the safety of our employees. Sparta Consulting, Inc. will do everything possible to prevent workplace accidents and is committed to providing a safe working environment for all employees. 10
To further this goal, Sparta Consulting, Inc. has developed a Cell Phone/Hand Held Device Use Policy. Purpose: Driver inattention is a factor in a majority of motor vehicle accidents. We are not only concerned about your welfare as a Sparta Consulting, Inc. employee, but also the welfare of others who could be put in harm s way by inattentive driving. Mobile phone and other hand held device use while driving is a common, often harmful, distraction. Many countries and localities have prohibited mobile phone/hand held device use while driving. Researchers at the University of Toronto found the risk of having a traffic accident while using a cell phone or similar device to be the same as driving drunk. For these reasons, drivers may not use hand held devices to place work-related calls or while operating a vehicle while on company business. As a driver, your first responsibility is to pay attention to the road. When driving on Sparta Consulting, Inc. business, or driving while conducting business on behalf of the company in any other manner, the following applies: Procedures: Definition - Mobile Hand Held Units: Hand held devices may include cell phones, pagers, palm pilots, faxes and other communication devices. Allow voicemail to handle your calls and return them when safe. If you need to place or receive a call, pull off the road to a safe location and stop the vehicle before using your phone. Ask a passenger to make or take the call. Inform regular callers of the best time to reach you based upon your driving schedule. The only exception to this policy is for calls placed to 9-1-1. If placing or accepting an emergency call, keep the call short and use hands-free options, if available. When receiving an emergency call, ask the caller to hold briefly until you can safely pull your vehicle off the road. Obey the Law: Sparta Consulting, Inc. is not responsible for any moving traffic violations, parking tickets or any other city ordinances or state/federal laws regarding your driving habits and operation/care of your personal motor vehicle. Any tickets issued are the employee s responsibility, even if the ticket is issued while conducting business for our company. Other Safe Driving Precautions: Use better judgment when road conditions are poor. Limit or avoid driving when rain, snow, or other severe weather conditions threaten your safety. 11
Make an effort to avoid distractions such as eating, applying makeup, paying too much attention to your radio/cd player, or other distracting behavior. Do not drive if your ability to drive safety is impaired by the influence of medications. Laptop computers should never be used at any time while driving. If using a vehicle not your own (rental or otherwise), be sure to properly adjust the mirrors and familiarize yourself with the vehicle s controls before operating. Be concerned for your coworkers safety. Ask them to call you back at a safer time if they call you while driving. Be aware of and practice defensive driving techniques and maneuvers. 12
5. OTHER TRAVEL 5.1. Ground Transportation 5.2. Transportation Other The most economical mode of transportation should be used to and from airports, bus and rail terminals when the employee is not accompanying a client. The following modes of transportation should always be considered: buses, subways, hotel, and airport shuttle services. Employees traveling to the same location should share ground transportation to and from the airport whenever possible. In all cases, ground transportation will be paid directly by the employee and submitted to the company for reimbursement. 13
6. LODGING 6.1. Hotel Accommodation Travelers are expected to use negotiated, preferred, or lowest economical rates whenever possible. All hotel bookings should be made through the designated travel agency. If an employee travels regularly to a new location Travel Management should be notified so that a rate can be negotiated. The Sparta Consulting, or lowest possible rate, should be confirmed at check in. Employees are responsible for cancelling their hotel reservations. Cancellation costs may not be reimbursed if the employee fails to give due notice of cancellation to the hotel, as indicated on the itinerary. Travelers will be reimbursed for actual and reasonable hotel room costs. Upgrades to a rate higher than the negotiated preferred room rate for that hotel are not permitted. Unless otherwise instructed, all rooms will be guaranteed for late arrival with the traveler s personal credit card. The cost of the room, meals and telephones must be reported separately on the expense report for corporate tax purposes. A zero balance receipt from the hotel is the only acceptable receipt (Hotel folio) for hotel expenses. Movie rentals will not be reimbursed as they are considered a personal expense. 6.2. Corporate Housing If accommodation is required for periods of more than 30 days, HR can be contacted for assistance in negotiating preferred rates and to ensure the lease / rental agreements meet the Sparta Consulting Guidelines. 6.3. Hotel Frequent Guest Programs Travelers may participate in hotel frequent guest programs. However, participation in these programs must not influence hotel selection that would result in incremental costs beyond the company s specially negotiated rate. Any membership fees associated with joining these programs are not reimbursable. 14
7. MEALS The company expects employees to exercise sound business judgment regarding meal and entertainment expenses. Personal meals are defined as meal expenses incurred by the traveler when dining alone on an out-of-town business trip. Employees will be reimbursed for personal meal expenses incurred supported by a detailed receipt up to a max of $30 a day. The cost of out-of-town meals should be itemized on the expense report on a per day basis. Employees will be reimbursed for business meals with clients, prospects or associates and during which a specific business discussion takes place, providing such expenses are reasonable, appropriate and supported by a detailed receipt, credit card receipts and statements will not be accepted. In the event that two (2) or more employees of the same department have a business meal together, the most senior employee must pay the bill. In those instances, the individual who paid for the meal should claim the total cost of the meal on their expense report, provide the appropriate receipts, and indicate the name(s) of the employee(s) they dined with. In the case of a prolonged stay or extended travel to/from a location too far away from the employee s ordinary residence to commute daily, Sparta Consulting will provide a monthly allowance or approved per diem rate to cover the cost of meals and incidentals. Once this monthly allowance or per diem rate has been established, if actual expenses exceed the allowance, they cannot be submitted for reimbursement. 15
8. OTHER EXPENSES 8.1. Reimbursable Incidental Travel Expenses The following are examples of reimbursable incidental travel expenses (must be supported by receipts where reasonable): Business office expenses such as fax or copy services offered by the hotel or other agencies; Laundry and cleaning services if incurred by individuals traveling for more than two weeks; Highway, bridge, other tolls and parking charges; and Excess baggage fees when transporting business related equipment. 8.2. Non-reimbursable Incidental Travel Expenses The following are examples of non-reimbursable travel expenses: Airline, car rental and hotel frequent user memberships Cable TV Car washes Charities and/or non-profit organizations Class of service upgrades Clothing or toiletries Fitness equipment Gardening services Hair dressers Health club fees In-flight telephone charges Internet charges from Airports or Hotels Kennel charges for pets Maid service Medicine and/or medical expenses Membership rewards program for the corporate credit card Massages and other spa treatments Movies or shows Personal credit card annual fees Personal reading material Personal travel Suitcases and briefcases Traffic/parking violation fines or damage to employee s car Traveling to/from work at the local office 8.3. Immigration Expenses The following immigration related costs are reimbursable expenses: All government filing and legal fees for full time employees during the Nonimmigrant and Permanent Residence processes. All government filing and legal fees for dependent nonimmigrant H4 processing. Consular Visa Stamping fees for nonimmigrant petitions. 16
The following immigration related costs are not reimbursable expenses: Employees will be responsible for all government filing and legal fees for all their dependents during the Permanent Residence process. Sparta Consulting will not pay for Premium Processing of an H1B petition. The employee may pay the $1,000.00 fee by making a check out to the USCIS, and forward the check to the HR Department. This fee cannot be deducted from the employee s paycheck. 8.4. Relocation See Separate Policy 8.5. Miscellaneous Expenses All other miscellaneous expenses including client entertainment must be pre approved by a senior officer of the company. 17
9. EXPENSE PROCESSING GUIDELINES 9.1. How to complete Complete Expense Form can be requested from accountspayable@spartaconsulting.com Attach original receipts to an 8 ½ by 11 sheet of paper Send to Accounts Payable, 111 Woodmere Road, Suite 200, Folsom, CA 95630 Each expense report should clearly state the purpose of the business need. Example- Client site and project, or Sales presentation and prospect See Appendix B for an expense report example. Prior to sending to Accounts Payable, the expense report should be approved by your manager. Considering the varying location of employees and managers an email approval is acceptable as long as the approver has received a copy of the report and the total dollar amount is specified in the body of the email. Expenses should be submitted on a weekly basis. Expenses submitted past 60 will not be reimbursed. Check reimbursement will be issued twice a month, approximately the 15 th and end of the month. All approved expense reports received four days prior to a check run will be processed on the following check run. If an employee is in doubt about whether or not an expense is reimbursable, he/she should contact Sparta Consulting Accounts Payable or HR. 18
Appendix A Evidence of Automobile Coverage for Employees Renting Vehicles on Company Business Typically an automobile policy affords coverage for employees renting vehicles on company business. If this is the case, it is a best practice that employees reject the insurance coverage offered by the car rental agency in the United States and Canada in order to reduce company expenses. Frequently, employees may need evidence of commercial automobile insurance in order to reject the insurance coverage provided by the car rental agency. The identification cards below can be cut out by employees who travel and use a rental vehicle. The card will serve as a reminder to reject the insurance coverage when renting vehicles on behalf of the company in the United States and Canada. Evidence of Automobile Coverage Evidence of Automobile Coverage Sparta Consulting, Inc. Policy No: 57SBAIC0221 Policy 11/28/2007 to 11/28/2008 Period: Carrier: Hartford Casualty Insurance Co. This identification card serves as evidence that coverage is afforded for any vehicle rented on behalf of Sparta Consulting, Inc. as noted below: Sparta Consulting, Inc. Policy No: 57SBAIC0221 Policy 11/28/2007 to 11/28/2008 Period: Carrier: Hartford Casualty Insurance Co. This identification card serves as evidence that coverage is afforded for any vehicle rented on behalf of Sparta Consulting, Inc. as noted below: Provided by: Jenkins Athens Ins. Services Tel: 800 234 6364 Provided by: Jenkins Athens Ins. Services Tel: 800 234 6364 19
Sample Expense Report Appendix B 20