New Law Requires Specific Board Policy Regulating Travel Expenses

By James Petrungaro and Anthony Scariano, III

July 28, 2016

             Recently, Governor Rauner signed into law a new piece of legislation that regulates travel expenses for school districts and other units of local government. The Local Government Travel Expense Control Act requires that school boards enact a policy no later than July 1, 2017, regulating the reimbursement of all travel, meal, and lodging expenses of board members and employees, including at least the following:

The types of business for which travel, meal and lodging expenses are allowed;

  • The maximum expense amount for travel, meal and lodging expenses;

  • A standardized form for the submission of travel, meal and lodging expenses that requires documentation of the expense (e.g., a receipt, invoices, etc.).The minimum documentation to be provided to the Board before an expense or reimbursement may be authorized is as follows:

    • A description of the actual amount of meal, travel and lodging expenses if already incurred, or an estimate if they have not yet been incurred;

    • The name and title of the individual incurring the expenses;

    • The date of the travel and the nature of the business being conducted.

             The Act also allows, but does not mandate, that the Board policy may permit expense/reimbursement approval beyond the maximum amount because of extraordinary circumstances or emergency. If a policy as outlined above is not approved by the Board by July 1, 2017, no travel, meal or lodging expenses of any kind – whether within the maximum limit or not – may be paid or authorized by the Board until such a policy is authorized.

             Furthermore, entertainment expenses that are not “ancillary” to the program or event may not be paid for by the Board under any circumstances.

             Additionally, the Act requires that by March 2, 2017, any (1) employee expenses or reimbursements that exceed the Board’s maximum amount as set forth by policy, or (2) Board member expenses/reimbursements (whether exceeding the maximum amount or not), must be authorized by a roll call vote of the board during public session. Based on the spirit of the law, we conservatively interpret that to mean that the action should be a separate, stand-alone action with each member of the board casting a vote.

            The conflicting timelines in the Act present an inconsistency in the legislation. On the one hand, the Act states that a new policy must be in place no later than July 1, 2017, otherwise no expenses or reimbursements may be authorized by the Board. On the other hand, the Act separately provides the earlier March 2, 2017 deadline for the policy as it pertains to establishing a maximum expense amount, which if exceeded by an employee, requires a roll call vote of the board. Accordingly, we recommend that the Board’s new expense policy be adopted no later than the end of February 2017.

             It is expected that PRESS and other similar policy subscription services will promulgate a model policy for boards to adopt. If your District does not use a policy subscription service or would otherwise like our assistance in preparing or reviewing a compliant policy, we stand ready to assist.

 Tags:    Board Governance

               Policies

               Operations

               Finance