drsh99

I often work on international projects that are under federal contracts. My company requires that we submit reimbursement for actual Meals and Incidentals expenses, but only need receipts for expenses that are $75 and over. The hours I spend after a 1-2 week trip completing the expense spreadsheet and the hours spent by our admin team checking that I've correctly input the exchange rate for the days I withdrew cash and all the back and forth gets charged to the government. I've calculated the costs and this idiotic policy costs the government more than if we could just take the daily per diem.

Often1

Which is even more silly. While I don't know which agency your contract falls under, most of the federal government went to per diems back in the early 90's, if not before.

Not only does it cost less to process on both ends, but it is essentially fair and the majority of people are happy enough with it.

GlobeTrttr83

Bouncer

I'll simply add the following, as I'm currently on travel and on "per diem".

The USG, some years back, used to simply establish a per diem rate for a city and that was it. You were allowed to claim the per diem rate for food, hotels, and incidentals. Go over, and it was on you (unless you could sincerely justify the over-cost). Go under, and you keep the difference. You're an adult, go make it work and be reasonably honest.

Then some genius decided that "Oh noes! People are taking home a few extra thousand a year by claiming the per diem rate, and then renting a camp site and camping out! And pocketing the difference! Sweet Holy Moly the Fraaaaaaaaaaaaaaaud!"

And it was the best thing that happened to Hilton, Sheraton, Marriott etc. Ever. The USG, in panic about *potential* for small scale fraud, started demanding receipts for everything, and created a whole lot of bureaucracy to process, analyze, audit these receipts. Tens of millions of dollars spent to process, analyze and audit annually, probably north of 100,000,000 dollars a year.

And the people who had been pocketing the difference of a (relative) few dollars extra a day in their pocket said: "Okay, as opposed to claiming 140 and pocketing 40 by staying at the Motel 8 for 100, I'm going to claim 140, pay 140 and stay at the Hilton/Sheraton/Marriott and get the points instead. Because A) not stupid and B) Not staying at a Motel 8 if there's nothing in it for me!

So...

Net savings to the government by this change: $0.00.
Net additional cost to the gov't: Tens of millions of dollars, every year.

You would be financially more responsible to accept the minor graft (such as it is) from people who are willing to go away from home and family for some period of time for you, than to create the ridiculous accounting requirements (and therefore additional overhead) in order to ensure no "graft" occurs by people claiming a few dollars more than they actually spent.

A fiscal conservative would see the financial cost reduction in eliminating the thousands of auditor positions in the various agencies as well as the unnecessary record keeping of receipts (for YEARS, and no one knows why!) as a fair trade off. At the end of it, the deployment/travel costs are still the same, only the back end paperwork is 90% reduced as is the necessary staffing to support it. But we live with political puritanicals, and they will never acknowledge this.

Better to spend extra of your tax dollars in a fruitless effort to catch "fraud" then to simply accept that if the hotel per diem rate in a city is 140/day, then that will be the claim. Receipts required or no receipts required. 140/day will be the claim submitted.

Regards,
-Bouncer-

ROKNA

I've done up to 100 days a year on the road.

The per diem is the per diem, its always been the case its your cash, its approved by the local tax authorities (we got less than government employees), no legal requirement to keep records or return unused. Company policy was no questions asked, hotel is paid (again a lot less than government rates) and you are on the road and this is the deal. Its not easy being on the road, but having the cash on hand to ensure a good meal, 3 squares a day was great.

After a year on the road you wise quickly to a few things. I started with hotels where everyone got breakfast for free, but then moved up as loyalty pays, free breakfast in 4 star European hotels. Upgrades, free snacks, discounts at the hotel bar/restaurant. Lounge access at the airport, snacks and drinks, never great food but saves a Starbucks trip. Sometimes the per diem doesn't go far, Nordic countries being one.

The more our of water you were the more per diem was spent, Moscow and Tokyo you would over spend. You get savvy with the local environment, where to go, where to eat well at a good price. Sure I've eaten in Michelin star restaurants but had great food in small places on side streets. There were guys on my team eating out of food trucks in countries where hygiene standards were far from good.

I had to travel economy regardless of distance, played games with flights and timings to get upgrades but sometimes used the per diem saved over previous trips to pay for upgrades.

It adds up, but you are not sleeping in your own bed for weeks on end. I took part of it as compensation for the disruption and hassle and the fact you never get back the hours from getting up at 4am, or flights arriving after midnight.

638,264km, 1021 hours over 7 years

sbm12

The company I worked for from 1999-2008 paid a $75 flat per diem per day for meals and other incidental expenses. I set up a separate bank account and expense checks only ever went into that account and the only withdrawals were to pay the one CC I used for those expenses. The year I got married (2006) I cleared out the savings to pay for our honeymoon. RTW J tix booked with CO points, a handful of hotel nights in various places also covered with points and $5000+ saved up the year prior to covers pretty much everything else we did along the way.

Plato90s

This is the same theory that companies employ when they went to automated software-approval of expense reports.

They concluded (correctly, IMO) that it wasn't worth the man-hours to require expense reports in detail, paying staff to manually review/approve expense reports, and generally make employees upset at having to fight with finance to get your money back. As long as total spend and pattern analysis doesn't trigger an audit, just approve and move on.

Per-diem properly aligns both the employer's objectives and the employee's motives.

84fiero

Does it save the gov't money? It depends. If it's a fixed-price contract, the government doesn't review or approve the actual costs incurred and the contractor only gets the fixed price regardless of its actual costs. So inefficiencies just hurt the company's bottom line.

If it's a cost reimbursable type of contract, then for contractor travel, the company can use either actual costs, a per diem approach, or a combination, so long as the costs are reasonable (in comparison to Federal travel regulation cost parameters) and subject to other Federal acquisition cost accounting regulations. It seems pretty clear that your company's approach is much more costly though.

txirish

According to a article in the Harvard Business Review, U.S. businesses waste $3 trillion a year in "organizational drag." Bad processes, stupid rules, unnecessary meetings, etc. Making high-priced employees collect tiny pieces of paper, scan them, fill out detailed expense forms, etc. and then paying other people to check all that stuff is a great example. A reasonable per diem for meals is one way to get rid of all that waste. Instead of trying to adhere to rules about meal costs, each traveler can make choices. Want to eat ramen in your hotel room and bank a few bucks? Want to skip a meal or two and then splurge on a Michelin star restaurant? Or, just make convenient meal choices? All are fine with a per diem.

I've been an entrepreneur for decades, but as part of the sale of a business I joined a big company for a few years. IRS guidelines don't require receipts for lower cost meals, but this company wouldn't reimburse even the smallest expense without a receipt. This created lots of time-consuming paperwork (and occasional lost money if I forgot to get a receipt or mislaid it later). This annoying policy also altered my eating habits. When traveling, my meals don't always fit the "breakfast-lunch-dinner" boxes on expense reports. I may gulp a protein bar from my travel kit for lunch, but then have a nice dinner with a cocktail and a glass of wine. That would leave me with an "over limit" dinner receipt and no lunch reimbursement. The receipt policy told me two things about the company:Companies wonder why there's an employee engagement crisis...

A simple per diem policy with reasonable limits dramatically cuts wasted time in the expense reporting process and eliminates the distrust factor (since the company doesn't care if you spend less and bank it or spend more from your own pocket). It might be healthier, too, since it rewards employees who forego lavish meals.

thegoderic

UK Tax laws (I think), mean that the only time I've worked on a Per Diem is when working abroad, and by and large, I found them quite lucrative.

I did a project in Germany when the lounge buffet at the Marriott was a meal in itself and eating that 3 nights out of the 4 per week I was there allowed a splurge on the Thursday and a healthy profit at the end of the week.

On one project in the US, we were given a Per Diem to cover food and accommodation, which was generous and funded a number of colleagues' holidays.

However, to me, the biggest benefit is the simplicity of the expenses submission. No more asking the waiting staff to split the bill so many ways and no need to search the deepest recesses of your briefcase each month for the odd lost receipt.

drsh99

Nearly all are T & M (time and materials) aka cost reimbursable. As I said, this policy is idiotic. Also, fwiw, when I had young kids at home and worked for a fed contractor that used the government-established per diem (OCONUS for our international work), the savings went straight to cover the extra cost of babysitting during my travel. Hardly a luxury! I'm working on getting this policy changed, since it makes us more expensive and thus less competitive.

KDS777

We did a Walmart run for low sodium and low carb frozen food.

Breakfast in our HIX, and coffee for lunch.

Often1

Government per diems are yours to keep. Those here who say that the agency administering their contract is requiring more or is not permitting per diem travel are likely dealing with some small sub unit administered by a no nothing.

Given that the evidence of value in per diems has been around forever and that GSA adopted its rules in the early 1990's, any agency putting you through this wringer is clearly engaging in waste & abuse. Report it to the agency's Inspector General (can be done anonymously if you wish) and move on. Maybe it will get fixed and you will have your expense prep time back in your life.

84fiero

Great idea to try and get them to change - it's certainly in the company's best interest! It can be tough battling the idiocy sometimes.

A few years back we had a travel approving official in my Federal agency that tried to take it upon himself to impose extra burdens on travelers when filing their vouchers. We had multiple approving officials so I managed to avoid him for awhile. Some co-workers just caved in to avoid the hassle, but the first time he called me after I submitted my voucher (electronically - it's normally a fairly quick and easy process), going through his list of demands, I pushed back and cited the regs. He finally admitted the regs don't require what he wanted but said "it would help him out if there was ever a problem"(?). I said no, and asked if he was going to approve my voucher or if I needed to elevate the matter to management. It was promptly approved.

Often1

Polite but firm pushback generally works. Once upon a time, approving officials were important people who held your financial well-being in their hands. Now, it's designed to be a low-level job which is slated for replacement as machine learning takes over. Some of the pilot programs which do not even audit routine submissions, but scan for patterns which do require human review, are showing good savings. Most travelers are honest, most issues are penny-ante, and the few scammers eventually get caught. But, that puts some mid-level nobody on a track to nowhere in the government on a track to nowhere elsewhere.