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Procedures for expense reimbursement

by The NonProfit Times - July 8, 2012

As with all members of organizations, the directors of boards have the right to reimbursement for expenses that have been incurred on behalf of the organization. Reimbursed expenses can include travel, lodging, telephone and postage.

Recouping out-of-pocket expenses can be a smooth transaction if handled in the proper manner, according to Calvin K. Clemons, author of the book The Perfect Board.

The board should have a published statement explaining its reimbursement policy. The policy should be specific and detail exactly what expenses are covered. For example, airfare may be restricted to coach fare with advance purchase or there may be a set rate for mileage reimbursement. Some organizations replicate the rate set by the Internal Revenue Service while others set their own rate.

Directors should sign a statement acknowledging that they have reviewed and understand the policy.

The policy should provide instructions on how and when reimbursements are distributed. Receipts should be required for all expenses. Copies of vouchers, bills and statements should be avoided.

Depending on the size of the organization, it is good to obtain an approval from some other person that is not on the board. It can include an assistant treasurer, staff accountant or controller.

Have a standard organizational form that is easy to complete. Forms are available at most office supply stores and numerous Internet sources.

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