Expense Management & Reimbursement Financial Unit Liaison Meeting D ECEMBER 17, 2008

Agenda Key Principles High Level Current and Future Processes Project Progress Next Steps 2

Key Principles The University of Michigan reimburses faculty, staff and others for reasonable and necessary expenses incurred in connection with approved travel or business hosting on behalf of the University – Current processes do not adequately document business purpose or approval paths 3

Key Principles, continued A reasonable and necessary expense is one for which there exists a compelling business purpose that substantiates the expense and is within University expense policy limitations – Current processes to enforce policy are manual and often reviewed after the expense is incurred 4

Key Principles, continued The travel and hosting policy applies to all individuals incurring travel and hosting expenses for the University – and applies regardless of the source of University funds – Current process relies on individual to forward appropriate expenses for approval to Sponsored Programs 5

Key Principles, continued The University’s travel reimbursement policies must meet the IRS requirements for an “accountable plan” and supporting documentation must include amount, date, use and business purpose of expenses – Current processes do not promote a standard mode of expense reporting or documentation 6

Key Principles, continued Reimbursement requests must be approved by requestor’s immediate supervisor or higher administrative authority, and are subject to random audits by Accounts Payable and University Audits – Current processes are lengthy paper and manual processes 7

High Level Current and Future Processes Arrange Travel Retain all out of pocket receipts greater than $75 Retain hotel bill Retain airline bill Incur Expenses Provide receipts to reconciler Reconciler determine which receipts need to be sent to AP. Reconciler work in Mpathways to reconcile PCard expenses Reconciler create ATM form for out of pocket expenses Reconciler print pcard statement Reconciler tape receipts to paper Reconciler route paper pcard statement for approval Reconcile/Print P-Card Statement Once approved by Department Reconciler Mail Pcard statement to AP Accepted by AP Reimbursement typically 4-6 weeks Reimbursement Current Process Problems 4-6 Weeks is too long for reimbursement Searching multiple websites lengthens time to arrange travel Need to re-key trip information when reconciling Use of large number of vendors creates lost opportunity for negotiated contract pricing Internal Controls limited with manual processes Once pcard statement/ ATM Form submitted to AP; 4-6 weeks for reimbursement 8

High Level Current and Future Processes Arrange Travel Retain all out of pocket receipts greater than $75 Retain hotel bill Retain airline bill Incur Expenses Provide receipts to reconciler Reconciler determine which receipts need to be sent to AP. Reconciler work in Mpathways to reconcile PCard expenses Reconciler create ATM form for out of pocket expenses Reconciler print pcard statement Reconciler tape receipts to paper Reconciler route paper pcard statement for approval Reconcile/Print P-Card Statement Once approved by Department Reconciler Mail Pcard statement to AP Accepted by AP Reimbursement typically 4-6 weeks Reimbursement Current Process Future Process Arrange Travel Retain all out of pocket receipts greater than $75 only Incur Expenses Automatically created from booking and Pcard transactions Add out of pocket expenses Fax/image receipts and add into report Route to approvers Create Expense Report Once approved, auto submitted for reimbursement/reconciliation Reimbursement goal is less than 1 week Reimbursement Once pcard statement/ ATM Form submitted to AP; 4-6 weeks for reimbursementFlows assume University Pcard used for payment 9

Project Progress December 2007 conducted Focus Groups across campus regarding needs and challenges with the current travel and expense reimbursement policy and procedures January 2008 conducted an RFP and detailed evaluation of two vendors – PeopleSoft and Concur – Invited over 30 end users to vendor demonstrations and solicited feedback from them during the evaluation process May 2008 Selected Concur as our Expense Management and Reimbursement application 10

Project Progress, continued May - August 2008 Documented issues and opportunities associated with the current Travel and Hosting SPG – Most issues surrounded the prevalence of the use of exception memo’s to “go around” virtually any established guideline or policy October- November 2008 Presented potential policy changes to Faculty groups and Deans – Recommended implementing application and later considering policy changes 11

Project Progress, continued December 2008 Steering Committee assembled with Reps from: – Dental School – Finance – LS&A – MAIS – Medical School – School of Information – School of Public Health – University Audits 12

Next Steps Steering Committee to provide working group members Kick-off working group Finalize fulfillment provider negotiations Configure expense application and develop interfaces Initiate configuration of travel booking tool Develop application test plan and validate business processes Develop detailed change management / communication plan Tentative rollout schedule: – Phase 1 (pilot units) – Spring 2009 – Phase 2 (University wide) – Summer 2009 (contingent on phase 1 stabilization) 13

Questions? 14