Inquiry: We have some employees that may incur indirect travel costs. Depending on who those employees are (corporate level or non-corporate level) those indirect travel charges are going against our G&A pool or our Overhead pool. My question is what should we do with indirect travel costs that exceed JTR? Granted it is indirect travel so if the company permits JTR to be exceeded that is fine. But for the amount that exceeds JTR limits, is it better to allocate those costs to unallowable or is it still acceptable to allow them to be charged against G&A or Overhead?
As always, thanks for your help and advice.
Response: Those costs that exceed what is considered reasonable are unallowable. Reasonableness depends on the situation, however, generally, the limitations set forth for travel under the JTR, FTR, or the SR, Section 925 for Foreign Areas can be used as a guide. FAR 31.205-45 should be your guide. In special circumstances, actual costs that exceed the above referenced maximum per diem rates are allowable.
What would I do? I would segregate costs that exceeded the allowable amounts in an unallowable travel account. Also, the unallowable travel should be further identified as unallowable overhead travel, or unallowable G&A travel.
Remember, you can still incur the costs and reimburse employees accordingly. And the cost may be allowable for Tax purposes. Just can't charge the government.
When calculating any indirect rates or prices for commercial purposes you can just include that costs that is excluded from the pool when calculating the indirect rates for the government