STAFF NOTICE Electronic Expenses Management System and T/S Claim Changes

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1 : 3 MAY Human Resources Silvan House STAFF NOTICE Electronic Expenses Management System and T/S Claim Changes STAFF NOTICE 19 AIMED AT ALL FC EMPLOYEES DATED 8 JULY 2005 CONTACT Fiona Wright and Martin Finlayson, HR Policy Team, Silvan House Technical/System Issues: Alan Brown, Finance Systems, Silvan House FILE REF PP5/9/3 Purpose 1. This notice provides information about a Business Improvement Programme initiative, which is the introduction of an electronic Employee Expenses Management (EEM) system. This is replacing the manual C180 Travel & Subsistence claims process. Finance Systems and HR and have worked in partnership to deliver this business improvement to: Reduce the costs of processing the manual C180; Provide employees with a standard electronic system for making T&S claims via efinancials; For the majority of people who currently have their claims approved by their manager, introduce a general policy of self-approval of claims up to a maximum of 300; Provide managers with better information on T/S costs and improved reporting facilities. Implementation of the New EEM System 2. Implementation plans will be agreed with each business area and will take into consideration the available resources, other commitments and the number of claimants involved. Implementation is being staged during Finance Systems have produced an EEM User Guide (click here to view). This gives guidance on how to use the system. 4. Until you have access to the EEM system for live claims, the current C180 claim, line manager authorisation and processing procedures will continue to apply. Summary of Changes 5. The introduction of the system involves a number of major changes to the processes for making a claim. These are summarised below, with details provided in the notice. If you have access to a PC you will make your claim for T&S expenses (or other valid expenses covered by the system) on-line using EEM. If you do not have access to a PC you can continue to complete a C180 form and will pass it to a proxy user, who will be authorised to input the claim. July

2 You will be able to input individual claims up to a value of 300 without requiring approval by your manager (one claim is the sum of all items of expenditure relating to one business trip, as at present). Some exceptions to self-approval will apply and are detailed in the Notice in section 5. Claims over 300 will require approval from your line manager or someone else in an approval group, which will be set up by Finance Systems. The approval is carried out within the system. The Executive Board has decided that there should be no 100% secondary checking of claims. Unit managers will receive a monthly report detailing all claims processed and will have responsibility for arranging a local audit process involving a minimum 10% check. Claims will not have to be keyed into efinancials, but will automatically be processed and paid by the BACS payment method. Some parts of the FC can reclaim VAT and the system is configured to calculate VAT if you have a VAT receipt. Once a whole unit s claims are made via EEM, there will be no requirement to manually record claims on E171. Action 6. Staff Notices are sent out by and copies are placed on the HR econnect site. Managers should make arrangements to ensure that people who do not have access to receive a personal copy of this notice. For further information about this notice please refer to the contact box above. Kim P Lardge Director of Human Resources 8 July 2005 July

3 July Human Resources Silvan House STAFF NOTICE 19 Employee Expenses Management and T/S Claim Changes 1. What are the Changes being made to the T/S Claim Process? The Employee Expenses Management System is using new technology to improve an administrative process for the business. Finance Systems and HR Policy have developed an electronic expenses payment and management system to replace manual C180s. The system will enable you to make your claim on line. All the FC fixed rates and expense types are built into the system and none of the rates are changing as part of the introduction of EEM. (Refer to Staff Notice 16 and SH Chapter 14 for information on these). You will not be asked for more information than you provide on the C180. You will have to collect receipts as at present. EEM will pay non-taxable expense types only. Taxable items, such as Excess Fares and Additional Housing Cost Allowance, will be routed to HR Services in order that these can be paid through your salary. The other main change is that claims up to a fixed value will be input and paid without your manager s approval, although they will be available for checking at any time. 2. How does EEM Work? The EEM system is a web-based application that will be accessed via your PC using the Online Applications menu available on econnect. You will be given a user name and password. The system is built around the existing expense types and rates. Current T/S rates and allowances will be held as standing data and will be used by the system to build up your claim. For example, if you pick Short Day Subsistence, the system will automatically insert The system will allow for both Actuals, such as accommodation charges, as well as fixed rates, such as mileage. The system will include default VAT rates for each expense type, which the claimant will confirm when making the claim. Any VAT recorded will need to be backed up with a valid VAT receipt. 3. How Can I Make a Claim if I Don t Have a PC? In some circumstances, you may not have ready access to, or be proficient in using a PC. If this is the case, you will continue to complete and sign off a paper C180 claim form and pass it to a proxy user who will input your claim into the system for you. Proxy users will be the exception and must only be used where there are clear, practical reasons why an individual cannot input their own claims. Proxy user access will be authorised by Country/National/FR/Divisional Finance Managers. Regardless of whether you or a proxy user inputs your claim, you, as the claimant, are responsible for the claim content and the sums claimed. 4. Your Responsibilities as a Claimant As a public servant you are expected to observe the highest standards of financial propriety. You have a personal responsibility for acquainting yourself with the T/S rates/guidance and

4 seeking advice if you are unsure of what you can claim. You are responsible for the accuracy and validity of your claim. If you are in any doubt about T/S rates, please seek advice from your line manager, HR Silvan House and, for Forest Research people, FR Central Finance. As at present, you should clear business trips with your line manager or Cost Centre Manager in advance (including any intention to use a hotel or B/B that is more expensive than the FC s booking limits). You are required to arrange your journeys/accommodation in the most economical way. For every claim, you will be required to agree an online declaration similar to the one currently included in the C180. Fraudulent claims (a false claim made with intent) are treated as gross misconduct and, if proven after investigation, will result in your summary dismissal. The fraud may also be subject to a criminal charge. Your acceptance of a payment to which you know you are not entitled is also fraud. 5. How will my claims be approved? a. Self Approval up to 300 Some people currently have the ability to self approve claims. We are extending this to the majority of employees for claims with a value up to 300. This means that you will not have to get your manager to sign off such claims before they are paid, once you are using EEM for live claims. The exceptions to self approval are: All new recruits will have all their claims approved during their probationary period whilst they become acquainted with the T/S system. New claimants (without recent experience of claiming for T/S) may also have their claims approved for a similar period; People employed on short-term temporary appointments (i.e. of less than 1 year) will have their claims approved; Anyone under investigation for fraud or involving any type of dishonesty will have his/her ability to self-approve removed pending the outcome of the disciplinary case. The disciplining authority will decide if and when this is reinstated; All transfer expenses, which will be routed to HR Services. During the implementation phase, business area Finance Managers may decide to set lower limits on a temporary basis, while users become familiar with the system. For T/S, all expense items relating to one business trip must be input as one claim, as was the approach with the C180. The 300 limit therefore applies to the claim total: the sum of all expenses for the trip. If you travel every week and have single trip claims that usually exceed 300, you may apply for an increased threshold limit from your Cost Centre/Unit Manager. This is discretionary and you will have no right to retain this, for example, if you move job or your travel decreases. You should not apply for an increased limit simply because you are accustomed to bunching several claims from a few months travel together. (See section 11). July

5 When you submit a claim for under 300, the system will automatically include it in the next payment run in e-financials. There will be no need to input the claim to e-financials. A remittance advice will be sent to you. b. Approval of Claims over 300 Claims over 300 will be automatically routed for approval by the system to your line manager or another manager in your unit s approval group. These approvers will be agreed with each business area as part of the implementation process and will be made known to you. The approver will receive an letting him/her know that a claim is waiting for approval. Those with responsibility for approving claims must be satisfied that: the expenses were necessarily incurred on official business or are costs that can be properly charged to the FC; T&S expenses comply with the FC rules in Staff Notice 16, including cost effectiveness requirements. Before passing a claim, the approver will be asked to confirm this in the system. A claim flowchart showing the process is provided at Annex What Can I Claim in EEM? The system has been set up to process the following type of expenses and charges: All travel claims including overseas travel (see section 7); Transfer expenses. You will not be able to self approve these expenses because of the taxation requirements for some items. You can input the claim online for non-taxable items and the claim will automatically route to HR Services in Silvan House for payment. You will be advised by HR Services how to claim for taxable items and what these are. Other valid charges and expenses. We want to encourage more use of GPC for other valid expenses and costs, such as professional membership fees, conferences, supplies and study/course materials. However, the EEM system will enable you to make claims for these initially although it is planned to develop more appropriate payment methods in the future. The current advance approval requirements will continue to apply to such expenses. For example, you will have to get your manager to approve a course of study or a training course and the level of support the FC will give to you before you can make a claims for course fees etc. We will keep the type of non-taxable expenses that can be claimed through EEM under review. 7. Overseas Travel Claims We have set up expense types for overseas travel, though these will have to be entered in sterling. Conversion rates and the detail of the overseas T/S rates cannot currently be incorporated in the system. You will obtain the exchange rates that were applicable at the time you made your journey and calculate the sterling equivalent. A currency converter is available on the HR site on econnect (Travel folder) or you can use another reputable source, such as the Financial Times web-site. Evidence of exchange rates applied should be retained for audits/ management checks. July

6 8. Temporary Advances Temporary Advances can be claimed via EEM. However, these are only appropriate in exceptional circumstances and you should agree with your manager your need for an advance before putting a claim into the system. 9. Will my manager be able to see my self approved claims? Managers will be able to obtain claim information via standard reports. Your claims may also be scrutinised as part of sample checks and more formal audits. 10. Will Duplicate Claims be rejected in EEM? A number of validations will be included in the system to identify duplicate or erroneous claims. It will not, however, be possible to identify all such entries due to the large number of possible combinations and the additional burden that would be placed on the system performance by excessive validation. However, a range of standard and exception reports will be available to aid the FC s fraud risk management and to help us continually improve the system. It will be your responsibility to ensure that you do not put the same claim in twice and the system user guidance explains how you can view your claim history if you need to check this. 11. When Should I Claim? You can input expenses to EEM as they are incurred and should submit your claims at least monthly. This will ensure they are included in the appropriate accounting period and will assist in budget monitoring and management reporting. Late claims are difficult to validate and lead to problems in financial control and VAT reclamation. Claims that are submitted unreasonably late can be rejected. (See SH 14171). 12. GPC Payments The EEM system has been developed for the reimbursement of expenses. There is a facility to record Government Procurement Card (GPC) payments in EEM but you will not need to do this just now. An interface between EEM and GPC systems is planned for the future. You should continue to use your or the unit s GPC and record such payments in the normal way. 13. Payment Method All payments are made through the BACS payment method. In the absence of a bank account being provided for this system, the bank account for your salary will be used. 14. What Checks will be carried out? The EB has decided that there should be no 100% checking of claims for accuracy and no 100% secondary approval process by office staff once EEM is used. Cost Centre Managers will receive a monthly report detailing all claims processed for their unit and will be responsible for arranging sample checks of the claims paid. Cost Centres must carry out checks on a minimum sample amounting to 10% of claims. Guidance on what should be covered by cost centre sample checks will be set out in guidance that will be available on the Finance and Accounting Services Intranet site shortly. July

7 Accounting Inspections and checks by external bodies, such as Customs and Excise, will also be carried out. 15. What Records and Receipts Do I keep? Receipts, VAT and Claim Records You must obtain and retain receipts to support your claim for actual costs, for example, accommodation, taxis, bus fares etc. These may be requested for finance inspection purposes and may also be required by Customs and Excise or the Inland Revenue where there is VAT involved. If you have receipts for any expense, print a copy of the claim using the Print option on EEM (each claim will a unique number) and attach the receipts. Printed claims and receipts must be forwarded and held at the administrative unit for each cost centre. These are required for inspection and should not be held by the claimant. Where no receipts are needed to support any claim item, for example where only a flat rate is claimed, there is no need to print a copy of the expense claim. To enable the Commission to reclaim the full amount of VAT paid on expenses we need to have an accurate record of VAT charges via a VAT receipt (this is a receipt that has the value of VAT or the company s VAT registration number shown). The EEM system will ask you whether VAT has been paid, will default a VAT value that you will be asked to confirm and you will have to note in the system that a receipt has been obtained. You cannot input a VAT claim unless you have a VAT receipt. The FC cannot reclaim VAT unless the receipt is obtained. If you will be using a proxy user to input your claim to the system, you should pass your completed C180 and receipts to him/her. 16. Storage of Claims Receipts/claims must be retained for a period of 3 years after the end of the last tax year, unless the costs have been incurred for a partnership-funded project that requires a longer retention period. If you need further guidance on this, contact your own Finance Manager or Ian Rae, Head of Financial Services, Silvan House. Country/National/FR Finance Managers will be responsible for advising on how claims are to be stored at administrative unit level. Claims must be produced for inspection by any authorised person e.g. your line manager, unit manager, FC Accounting Inspectors, Internal/External Auditor or Inland Revenue/Customs and Excise Inspectors. 17. Reports You will be able to use the EEM system to track your claims within the system and view earlier claims. Cost Centre Managers and/or the cost centre s finance administrator will receive monthly reports on claims processed within their unit and Finance and HR Managers will have access to detailed reports on expenditure. Guidance on the reports available from EEM will be available in the EEM User Guide. From the date on which units start to use EEM for all their people s claims, the E171 recording system can cease. HR Policy and Finance Systems, July 2005 July

8 ANNEX 1 EEM CLAIM FLOWCHART PC USERS NON-PC USERS (Proxy Input) Input expenses into EEM as they are incurred. Submit your claim at least monthly. Complete and sign a C180 Travel Claim and pass it to your unit s proxy user along with all receipts. Proxy inputs expenses into EEM and submits claim. UP TO 300 OVER 300 Claim self approved and routed for payment. Claim passed by system to approver. Claimant (or Proxy) gets an to confirm that the claim has been passed for payment. Approver checks claim, approves for payment or queries with claimant. If the claim includes receipts, print off a copy of the claim and attach the receipts. If no receipts are included no further action is required. Receipts/claims must be retained for a period of 3 years after the end of the tax year to which they apply. Monthly report of all claims is sent to unit managers to arrange completion of a detailed check of at least 10% of claims. Highlight the claims checked on the report and note any errors or concerns. Any errors should be notified to the claimant to arrange correction on the next claim. July