Payment and Reimbursement Policy Template1: Purpose

Many organizations include a general purpose statement for the policy. Some policies indicate a purpose to control costs, establish procedures, comply with applicable state and federal law, and/or reimburse reasonable and necessary expenses actually incurred.

Section 2: Reimbursable Items

Many organizations list expenses that are reimbursable. This list may be very general and may only indicate “ordinary and necessary” expenditures or may be exhaustive. Both approaches are common and decisions on descriptiveness of reimbursable expenditures should depend on an organization’s needs.

A catch-all or general statement of reimbursable expense may include, “Any payable item directly related to or caused by operational activities of Organization. Expenses must be directly or indirectly related to the mission of Organization.” (Adapted from Texas Master Naturalist, Gideon Lincecum Chapter).

An itemized list of reimbursable expenditures may include:

Local business mileage

Overnight travel (lodging and meals)

Books and subscriptions

Continuing education

Vestments and vestment cleaning

Professional dues

Long distance telephone calls

Supplies

Airfare and travel expenses

Parking

Printing

Some organizations list what is not reimbursable and may include:

Travel insurance

First class tickets or upgrades

Limousine travel

Movies, liquor or bar costs

Membership dues at any country club, private club, athletic club, golf club, tennis club, etc

Clothing purchases

Valet services

Section 3: Reimbursement Procedure

The procedure is integral to the policy. Although policies vary in how reimbursement and payment procedures are outlined, they all contain the three basic elements.

1. Business reason for expense. There must be a legitimate reason related to or for the purpose of the organization. This requirement is generally satisfied with a statement of allowable reimbursements as outlined in Section 2.

2. Employee adequately accounts for the expense within a reasonable time. Adequate accounting generally entails that an expense is substantiated for a business purpose. This may generally be accomplished by requiring that an employee complete a reimbursement form that requests information about the expense and requires attachment of an itemized receipt to substantiate the information provided. Some organizations list out specific timelines or cut-off dates to submit for reimbursements. Others indicate that submission is required within a reasonable time period.

3. Employee returns any amount of excess reimbursement within a reasonable time. A statement that indicates that any excess payment, which may be for multiple reasons, is returned to the organization within a specific period of time. This statement clarifies that specific amount payments are made for expenses actually incurred.