1.0 Policy Purpose
This policy states the requirements for Brown University faculty, staff, and students to be reimbursed for business-related expenses purchased with personal funds. These expenses can include, but are not limited to: travel, hospitality, and business-related purchases.
2.0 To Whom the Policy Applies
This policy applies to all Brown University faculty, staff, and students.
3.0 Policy Statement
Brown University’s expense reimbursement plan follows the requirements of the Internal Revenue Service (IRS) Code Section 62 on Accountable Plans. An Accountable Plan is a method of reimbursing individuals such that the reimbursement does not count as taxable income, provided the following three requirements are met:
- Business Purpose: Expenses incurred are necessary, reasonable, and appropriate for University business (see Section 4.0). This type of expense satisfies the IRS Business Connection criteria.
- Substantiation: Sufficient supporting documentation is submitted to the University to enable the nature of each expense to be identified and deemed a legitimate business expense within 60 days of its incurrence. (See Section 7.4 for additional information.)
- Return of excess amounts: Reimbursement funds or allowances given that exceed the substantiated expenses are returned within a reasonable time frame. This time frame is defined as within two (2) weeks when an advance has been given or within 60 days for expense reimbursement. Unsubstantiated amounts not returned within a reasonable time frame, as defined above, are considered gross income subject to withholding and must be reported on Form W-2.
Requests for reimbursement of purchases that do not comply with Brown’s Accountable Plan rules may, with Senior Officer Approval, be processed as a taxable payroll adjustment. The payment may be grossed-up if department funds are available for the additional payment.
The University is a tax-exempt organization, and as such, every effort must be made to avoid paying sales tax. Whenever possible, business purchases should be made using one of the acceptable methods of purchasing that avoids paying sales tax and supports the University’s strategic sourcing initiatives.
Expense reports must be created and submitted in Workday either for oneself or for another individual, if the initiator has an added security role.
3.1 Unallowable Expenses
Certain transactions are not reimbursable, including, but not limited to, the following:
- Transactions determined to be of personal use or benefit and/or for personal reasons other than illness, hospitalization, or bereavement;
- Payment of independent contractor services (including guest speaker);
- Payment of travel expenses for individuals not employed or enrolled at Brown;
- Restricted purchases, as defined on the Strategic Purchasing, Contracts and Insurance website.
Expense reimbursements are not intended for the routine purchase of office supplies or other business-related expenses.
3.2 Documentation Needed for Reimbursement
For expenses other than travel or hospitality (e.g., books, classroom materials, copyright fees, food and provisions, etc.), dated receipts and proof of payment are needed. A Missing Receipt Affidavit can be submitted in the event that a receipt for a purchase greater than $75 is lost or never obtained.
Examples of proof of payment include:
- For credit/debit card – last 4 digits of the card on the receipt
- Check – check number & image/copy of the cancelled check
- Other payment methods (e.g., PayPal, Apple Pay, etc.) – receipt of transfer from payment method
- Cash –make sure it is clearly noted on receipt
For travel expenses, please refer to the travel policies listed in Section 7.1. For business meals and hospitality, please refer to the Business Meals and Hospitality Policy. Please note: Since alcohol must be listed separately on a reimbursement, it is recommended that itemized meal receipts are provided.
3.3 Expenses Older than 60 Days
The IRS states that expense reimbursement requests must be substantiated within a reasonable time frame, i.e., within 60 days from the date of the expenditure. At Brown, the date an expense report is started in Workday is the date used to determine timely substantiation. An expense not substantiated within 60 days is considered gross income subject to tax withholding and will be processed through payroll and reported on a W-2 form. See Journal Entries for Expense Reimbursements Over 60 Days SOP.
For the purpose of this policy, the term below has the following definition:
- Business Purpose:
A required statement that adequately describes the expense as a necessary, reasonable, and appropriate business expense for the University. All expenses must support or advance the goals, objectives and mission of the University.
All individuals to whom this policy applies are responsible for becoming familiar with and following this policy. University supervisors and employees with student oversight duties are responsible for promoting the understanding of this policy and for taking appropriate steps to help ensure and enforce compliance with it.
Individuals Seeking Reimbursement: Responsible for maintaining required receipts/supporting documentation, providing a complete Business Purpose for each purchase/reimbursement, and submitting expenses for reimbursement within 60 days of the expense. (See Section 7.4 for additional information.)
Manager: Responsible for reviewing and approving expense reimbursements, which includes approving both the purchase itself and the Business Purpose of the transaction.
Cost Center Manager: Responsible for reviewing and approving the worktags used on expense reports; and ensuring the Business Purpose complies with the requirements of the Business Purpose definition (see Section 4.0) and that applicable documentation supporting the transaction is attached.
Accounts Payable: Responsible for reviewing all transactions to ensure compliance with Brown University’s Accountable Plan.
6.0 Consequences for Violating this Policy
Failure to comply with this and related policies is subject to disciplinary action, up to and including suspension without pay, or termination of employment or association with the University, in accordance with applicable (e.g., staff, faculty, student) disciplinary procedures.
7.0 Related Information
Brown University is a community in which employees are encouraged to share workplace concerns with University leadership. Additionally, Brown’s Anonymous Reporting Hotline allows anonymous and confidential reporting on matters of concern online or by phone, 877-318-9184.
The following information complements and supplements this document. The information is intended to help explain this policy and is not an all-inclusive list of policies, procedures, laws and requirements.
7.1 Related Policies
7.2 Related Procedures
- Journal Entries for Expense Reimbursements Over 60 Days SOP
- Create Expense Report for Self or Other Worker Job Aid
- Creating Expense Report via Mobile App Job Aid
- Expense Report Business Purpose Job Aid
7.3 Related Forms
7.4 Frequently Asked Questions (FAQs)
7.5 Other Related Information
Policy Owner and Contact(s)
Policy Owner: Vice President for Finance and Chief Financial Officer
Policy Approved by: Vice President for Finance and Chief Financial Officer
Policy Issue Date:
Policy Effective Date:
Policy Update/Review Summary:
Previous policy version(s) superseded by this policy:
- Expense Reimbursement Policy, November 8, 2019
Website Updated May 18, 2023