Audit Alert on Allowability of Lodging, Meals and Incidental Expenses under FAR 31.205-46, Travel Costs

Added Notes by Paul Gunn: Understand that when an audit alert or similar notice is issued as an “Emphasis” on existing guidance, AND it is being issued directly to auditors, this typically means that the guidance IS NOT being followed as intended and that the Contractor (especially the small contractor) is being unfairly treated on the issue.

So, remember, be courteous and kind, but Know Your Rights and the Policy Guidance!!!  How?  Simply review the guidance for yourself and discuss it with those you trust.  And don’t assume that the auditor is always right.

AUDIT ALERT:  This audit alert emphasizes existing Agency guidance related to the determination of allowable lodging, meals and incidental expenses.  FAR 31.205-46(a)(2) provides that allowable lodging, meals and incidental expenses are limited on a daily basis to the “maximum per diem” rates set forth in Government travel regulations (e.g., Federal Travel Regulations, Joint Travel Regulations, and Department of State Standardized Regulations).

The Government travel regulations provide for two ceiling amounts: one for lodging and one for meals and incidental expenses. However, as provided in CAM 7-1002.3c(2), contractors are subject to only one ceiling, a total of lodging plus meals and incidental expenses. This CAM guidance is consistent with the regulatory intent that the “maximum per diem” rates represent a single combined ceiling.


Keep in a better position to deal with these situations, regularly visit your online contractor community and read, review, re-read, and contemplate the information/guidance designed for contractors like you.