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5.4.2 Business and Travel Expenses

laboratory equipment
Last updated on:
11/20/2020
Formerly Known As Policy Number: 
36.7

The university pays directly or reimburses individuals for expenses that are necessary and appropriate to conduct University business. This policy outlines the guiding principles, reimbursement and travel policies and examples of business-related expenses at Stanford University. This policy applies to all fund types and business expenses, including travel undertaken for university business and purchases of items to be owned by Stanford. It should be used in conjunction with resources and procedural information on the Gateway to Financial Activities (Fingate) website.

Authority: 

Approved by the Senior Associate Vice President for Finance.

Applicability: 

This policy is applicable to direct payments and reimbursements of:

  • Business meals and entertainment expenses,
  • Travel expenses (expenses incurred while travelling on University business)
  • Purchases of items to be owned by Stanford (including purchases made by visitors and students)

Additional information on purchasing methods can be found in AGM 5.3: Purchasing Goods and Services.

1. Guiding Principles

a. Supporting University Travelers

In order for Stanford to be able to provide support to its faculty, staff, postdoctoral scholars and students when they are traveling on university-sponsored business, the university requires the use of a centralized booking program as described in the Travel Policy below. This method connects travel reservations automatically to the university’s Travel Registry, enabling Stanford to locate its employees and students in an emergency and/or provide assistance as needed.   
 
In most cases, use of the university’s centralized booking program results in reduced travel-related costs. However, as travel pricing is dynamic, there are times when a fare or rate may not reflect the least expensive price. In these cases, the ability for the university to support its travelers supersedes the need to purchase the cheapest travel fare or rate. The university continually evaluates its relationships with travel booking partners to ensure that services are provided at reasonable cost and are generally consistent with those offered by other commercial booking sources.
 
In addition, at a holistic level, the university can more efficiently steward its resources through the centralized booking program by reducing the administrative burden related to payment and reimbursement processes and tools, time searching for cost comparisons, and effort tracking the needed documentation. 
 
More information is detailed in the Travel Policy section in this administrative guide memo.
 
b. Stewardship of Resources
 
As stated in the University Code of Conduct (AGM 1.1.1), members of the Stanford University Community are expected to employ sound business practices and exercise prudent financial management in their stewardship of University resources. As such, individuals using University resources for business, travel expenses, and/or to purchase items to be owned by Stanford share the responsibility of ensuring that these resources are used appropriately, support the University mission, and comply with University policies, applicable laws and regulations, and sponsor and donor restrictions.
 
Specifically, expenses incurred in the course of University-related business must be reasonable and necessary. 
 
  • Reasonable means that the nature and amount of the expense does not exceed that which a prudent person would incur under the same circumstances. While these amounts may vary, a good test is whether the individual could defend the expense if it came under public scrutiny. 
  • A necessary expense is one that supports and furthers the University mission and its ongoing operation.
The university has established limits on maximum university reimbursement for specific types of business and travel expenses, including meals, air and ground transportation, and hotel lodging. The limits, details and associated processes for these reimbursements are available on the Fingate website. It is the responsibility of the individual incurring expenses, as well as those who assist others with incurring expenses and those involved in the preparation and approval of reimbursement requests or financial transactions, to exercise good stewardship of university funds and to adhere to the reimbursement policies. For more information on these various roles and responsibilities, see AGM 3.2.1: Responsibility for University Funds.
 
Travel and business expenses that do not reflect good stewardship of University resources, are found to benefit the individual at the expense of the University, and/or are deemed excessive or fraudulent will be subject to further review by the appropriate office (e.g. Office of Chief Risk Officer or School/Unit Office) as outlined in AGM 3.5.1: Financial Irregularities. Consequences of substantiated financial irregularities include denial of reimbursement, future business expense or travel restrictions and appropriate disciplinary action up to and including termination of employment or other relationships with the University.
 
 

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2. Travel Policy

Stanford is committed to supporting domestic and international research, business and educational travel that advances the university’s mission, except when circumstances pose a significant risk to health or safety. Exigent circumstances may necessitate additional restrictions or guidance with regard to travel on behalf of the university.

To ensure the safety of the Stanford community, faculty, staff, postdoctoral scholars and students must engage in thoughtful planning of their travels well in advance and fully utilize the university resources that are available to them. Before purchasing or booking travel, faculty, staff, postdoctoral scholars and students must ensure compliance with university, local, state and federal guidelines, as well as with all relevant regulations in their travel destination. 
 

Definition of University-Sponsored Travel

University-sponsored travel is defined as when the university pays directly or reimburses individuals for travel expenses that are necessary and appropriate to conduct university business. This includes the use of any funding source for which the university has financial responsibility and accountability, including operating budgets, donor gifts, federally-sponsored grants and awards, and any other restricted or unrestricted fund. Student and postdoctoral scholar travel that is directly related to their individual course of study is considered university-sponsored travel, even if the travel is funded via their base financial support.

University-sponsored travel may occur within or outside of the local area. Travel is considered outside of the local area when the destination is 50 miles or more one way from the traveler’s home or Stanford’s historic campus, whichever is greater. This definition is applicable to some travel expense policies, for example, hotel lodging reimbursement, where the university will only pay for hotel lodging expenses when the trip is outside of the local area.
 
University-Sponsored Travel Booking Policy: Airfare, Hotel Lodging and Car Rental
Stanford utilizes a centralized travel booking program (Stanford Travel) that automatically registers travel reservations in the university’s Travel Registry, which connects to Stanford’s provider of medical, personal, travel and security assistance. Therefore, in order to enable the university to locate and support its travelers in the event of an emergency, faculty, staff, postdoctoral scholars and students traveling on behalf of the university must utilize the centralized travel booking program to book air travel, hotel lodging and car rental reservations. 
 
If a purchase or expense is identified as non-compliant, Stanford will not pay for or reimburse the expense. In these instances, the individual incurring the expense is responsible for payment or reimbursement to Stanford.
 
Purchasing airfare, hotel lodging and/or car rentals outside of the centralized booking program requires an advance exception from the Dean's or VP Office (or designee) that is then attached to the transaction when originated. Without the pre-approval, it will be returned to the preparer and would require an approval from the Dean, Vice Provost, or Vice President of the school/unit and PTA award owner to be processed. 
 
Exclusions to the Booking Policy
There are some circumstances where faculty, staff, postdoctoral scholars and students are not required to book airfare, hotel lodging and rental car through Stanford Travel booking channels, such as: 
  1. Conference hotels (which may be booked directly at the conference rate),
  2. Airline ticket reissues or exchanges, and
  3. Travel purchases booked outside of the U.S. for employees of Stanford’s affiliated global subsidiaries and branches. Non-employees affiliated with activities managed through these subsidiaries and branches (for example, coaches or volunteers) are also excluded from this booking policy. 
In the above circumstances, the traveler must manually enter and update the itinerary in the university’s Travel Registry. For a complete list of specific guidance by travel type, see Stanford’s Gateway to Financial Activities (Fingate) website.
 
Travel for visitors, guests, Stanford Healthcare, Lucile Packard Children’s Hospital and SLAC National Accelerator Laboratory employees is not included in this booking policy and should follow the policies of their respective organization.
 
Paying for Travel
Generally, the Stanford Travel Card (TCard) is the preferred payment method for travel costs. Alternatively, personal funds may be used and a request for reimbursement can be submitted after the trip. 
 
Personal Travel
When a personal component of travel is added to a business trip, the university will only pay for or reimburse the costs of the business component. The charge that would have been incurred without that personal component must be documented at the time of booking in order to appropriately process the reimbursement.
 
The Travel Card may be used to pay for trips that include a component of personal travel that may not be easily separated from the booking, but it may not be used to purchase trips that are exclusively personal. In cases where the Travel Card is used to purchase trips with a personal component, the individual is responsible for reimbursing the university for the extra cost.
 
For more information about paying for travel, refer to Stanford’s Gateway to Financial Activities (Fingate) website.
 
Prohibited Travel
University funds or resources may not be used where Stanford prohibits travel. See, for instance, the Stanford International Travel Policy as it relates to undergraduate students.  
 
Travel Restrictions
Stanford University may strongly recommend against or restrict travel to or within countries where the U.S. Department of State has issued certain official Travel Advisory levels, where there is other reliable information of significant health or safety risks, and/or where exigent circumstances apply. Detailed guidance can be found in the Stanford International Travel Policy. When planning travel, faculty, staff, postdoctoral scholars and students should first review traveler health and safety guidelines as well as information about any travel restrictions on the Office of International Affairs and Environmental Health & Safety websites.

 

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3. Reimbursement Policy: IRS Accountable Plan and Regulations Compliance

The University reimburses individuals under the IRS Accountable Plan when the IRS regulations are met. Under this plan, the reimbursement is not taxable as income to the employee if the expense has a business connection and is also submitted in a timely manner (see sections below). In addition to expenses being reasonable and necessary, the requirements for reimbursement under the IRS Accountable Plan include the following:

a. Business Connection and Substantiation of Expense 

Expenses incurred must have a business connection; that is, they must have been paid or incurred while performing Stanford business. The business connection must be adequately explained and documented in the University’s records. Documentation must include:

  1. The Business Purpose, which should clearly and without need for interpretation:
    1. Explain how the business expense is connected to the University and supports its mission; and
    2. Include sufficient documentation to support the business purpose and alignment to the purpose of the funds, such as agendas or travel itinerary.
  2. Documentation demonstrating that the amounts incurred are reasonable based on the facts and circumstances, and specific explanation when they have deviated from University guidelines.

b. Timeliness of Transaction

Expenses should be submitted immediately and no later than 60 days after being incurred (e.g., return date from trip), or a reasonable explanation must be provided for an exception to be granted. Reimbursable expenses that are submitted after 60 days will be reported as taxable income to the IRS.

c. Non-employee Travel:  Students and Visitors

In addition, if the individual incurring the expense is not an employee of the university, additional requirements apply:

  1. An undergraduate, graduate or post-doctoral student incurring the travel expense must be certified as traveling on University business by the appropriate signatory. Review Student Travel policy on Fingate.
  2. Expenses incurred by foreign visitors may only be reimbursed if the visitor enters the United States on an appropriate visa (see Guide Memo 2.4.1: Visas for and Employment of Foreign Nationals).

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4. Examples: Appropriate and Inappropriate Business Expenses

a. Examples of Appropriate Business Expenses

  1. Business-related airfare, hotel lodging, travel meals, transportation, and conference registration fees;
  2. Business meals at a restaurant or catered by an approved supplier, attended by those necessary to achieve a business outcome;
  3. Occasional employee morale activities, local retreat and team-building events.
     

b. Examples of Inappropriate Expenses

  1. Spousal travel, unless approved in advance by the Provost;
  2. Business class airfare for domestic travel, unless an approved and current medical exemption is on file;
  3. First class airfare, unless business class would be allowed under policy but is not available;
  4. Frequent traveler programs or memberships, including the purchase of or redemption of miles/points;
  5. Gifts to individuals celebrating personal events, for example for: birthdays, baby showers, bridal showers, weddings, graduations;
  6. Personal membership and club fees, such as airline clubs and individual Stanford Faculty Club dues;
  7. Travel or domestic car rental insurance, unless in Hawaii or Alaska;
  8. Commuting expenses and parking fees or permits on historical campus and Stanford Redwood City campus for employees or students;
  9. Traffic citation for either personal or university vehicles;
  10. Interest charges for late payment of bills;
  11. Personal items included in a purchase of items to be owned by Stanford.
     

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5. Resources

  1. Please visit the Business and Travel Expense Policies page on Fingate for specific information on expense guidance and limits for travel and travel-related procedures.
  2. SLAC travelers should contact the SLAC Travel Office for more information.

 

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