Expense Report Guidance

Introduction and Background

Objectives To ensure Cobham Employees, understand the proper way to complete an expense report, capturing the proper detail, and categorizing the costs properly. Background BUs who sell to the US Government (USG) must exclude certain costs, that the USG will not reimburse.

For costs to reimbursable, they must be a necessary and reasonable expense, properly documented, and not expressly unallowable.
What types of cost are not reimbursed by the USG

Unsupported Unallowable Costs

Unsupported Costs

What are “Unsupported Costs” ? Unsupported costs are costs which do not have enough documentation, or the required documentation to determine: Allowability Reasonableness Allocability FAR prescribes what documents are necessary to support certain types of costs. For instance, Professional and Consultant Service Costs require: Details of all agreements Invoices or billings (in sufficient detail as to time expended) Work Products

Unallowable Costs

What are “Unallowable Costs” ? Costs which are “unreasonable.” A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person in the conduct of competitive business. Costs which are in excess of “certain” limits. Examples are:

Lodging in excess of Per Diem Limitations

Meals in excess of Per Diem Limitations Airfare in excess of lowest available airfare (coach), with certain exceptions Costs which are expressely unallowable, such as: Alcohol Entertainment Charitable Contributions Political Action Committee (PAC)

Employee Responsibility

All employees have a responsibility to ensure their expense reports are compiled properly, categorizing allowable and unallowable costs. Employees need to: Document that their airfare is lowest available (Orbitz automatically does this), or if not the lowest airfare, why? Otherwise, charge the amount over lowest available to “Travel Unallowable” Document that any lodging does not exceed the allowable limit (Federal Travel Regulations (FTR) or Joint Travel Regulations (JTR)) or that exceeding the limit is justified. Document that meals are within the allowable limits (JTR or FTR) Properly categorize all charges and understand whether the charge is allowable or unallowable. If a charge is unallowable, indirect associated costs such as tax and tip on alcohol also need to be removed. Alcohol is always an unallowable charge. Understand that an otherwise allowable cost may become unallowable depending or the purpose of a trip. For instance, M & A activity to perform due diligence is unallowable, therefore all these costs, are unallowable.

Employees Need to Properly Support all Cost Receipts Have proof of Expense (receipts) Itemized receipts are required when an expense may contain unallowable costs. For example, meals always should contain an itemized receipt, breaking out the different parts of a meal, beverages, taxes, and tip.

Receipts are required for taxis, fuel for rental car, and all travel costs

Explanations

All Expense reports should contain an overall reason or purpose for the expense.   If an expense report is for a business meal, business meal alone is not enough to support the costs.  The expense report should contain, why the business meal was necessary, who attended, and any other information that would substantiate the cost as being fair, reasonable, and necessary.

Employees Need to Properly Support all Cost Receipts Have proof of Expense (receipts) Itemized receipts are required when an expense may contain unallowable costs. For example, meals always should contain an itemized receipt, breaking out the different parts of a meal, beverages, taxes, and tip.

Receipts are required for taxis, fuel for rental car, and all travel costs

Explanations

All Expense reports should contain an overall reason or purpose for the expense.   If an expense report is for a business meal, business meal alone is not enough to support the costs.  The expense report should contain, why the business meal was necessary, who attended, and any other information that would substantiate the cost as being fair, reasonable, and necessary.

Employees Need to Properly Support all Cost Receipts Have proof of Expense (receipts) Itemized receipts are required when an expense may contain unallowable costs. For example, meals always should contain an itemized receipt, breaking out the different parts of a meal, beverages, taxes, and tip.

Receipts are required for taxis, fuel for rental car, and all travel costs

Explanations