Clearer Rules, Smarter Compliance
Procurement Services has rolled out a comprehensive update to the Reimbursable Business Expenses policy, effective August 4, 2026. This update replaces the previous 2024 version to provide clearer definitions, align with IRS guidelines, and streamline how university staff, faculty, students, and non-employees handle out-of-pocket expenses.
Reimbursement remains an exception-based procurement path rather than a standard method for purchasing non-travel items. Understanding these updates ensures your expenses are processed smoothly and avoid unnecessary compliance delays.
Here is a breakdown of the key changes and why they matter for your department.
Clearer Distinction Between Travel and Non-Travel Rules
The updated policy explicitly separates regulations for travel status and non-travel business purchases.
- Non-Travel Purchases: Out-of-pocket expenses for goods remain an exception and are intended strictly for unusual, unexpected, or emergency situations where a P-Card or Purchase Order could not be used.
- Travel Purchases: The policy introduces a mandate requiring the use of the Agency Travel Card (ATC) when purchasing air or rail fares for university business.
A Clearer Understanding of the $2,000 Limit
Under the 2024 policy, the $2,000 limit was applied generally “per reimbursement”. The updated policy clarifies that personal fund expenditures are capped at $2,000 per transaction, rather than per expense report. This applies to both standard non-travel expenses and non-travel purchases made while in travel status.
Mandatory Pre-Approvals for Specific Expenses
To improve fiscal oversight, the university now requires formal expense pre-approvals in the system before certain costs are incurred. You must submit a pre-approval for:
- Any travel or non-travel expense that is expected to exceed $500.00.
- Airfare and rail purchases at any dollar amount.
- Travel booked through our mandated travel management company.
- Fully remote employees traveling to a VCU campus, regardless of the dollar amount.
Strict Timelines Under the IRS Accountable Plan
To comply with IRS Code § 62(c) and prevent reimbursements from being classified as taxable income, VCU operates under an official Accountable Plan. The new policy clarifies and re-enforces strict, time-bound submission milestones:
- 30 Days: Expense reports should be submitted within 30 days after the expense was incurred or the last date of travel.
- 60 Days: Reimbursements submitted after 60 days require additional justification, further approval, and could be treated as taxable income to the expense owner.
- 180 Days: Any expense submitted more than 180 days after it occurred is completely ineligible for reimbursement.
Expanded Definitions and Roles
The policy now clearly defines critical roles in the financial workflow, helping departments understand who holds purchasing and approval responsibilities. Key additions include formal definitions for the Expense Owner (the person who incurred the expense), Delegates (those authorized to create reports on behalf of others), and Fiscal Approvers (the administrators managing the specific index funding). It also reiterates that payments for services—such as honoraria, independent contractors, or skilled labor—remain strictly prohibited from personal reimbursement and must be routed through standard procurement channels.
Why These Changes Matter
These adjustments protect the university’s tax-exempt status, ensure standard state procurement laws are followed, and shield employees from unexpected tax liabilities on their personal returns. By structuring the rules clearly around transaction limits and pre-approval thresholds, departments can better plan their outlays and avoid administrative denials.
Please review the updated Reimbursable Business Expenses policy on the University Policies library. Please direct any specific policy or system routing questions to [email protected].
