10. EXPENSES ARRANGEMENTS IN OTHER
ORGANISATIONS
PURPOSE
1. This note is an interim report on expenses
arrangements in other organisations. It is provided as background
information to support, or in some cases refute, generalised comments
that "in the private sector they ..." or "in the
public sector they ...". The note is based on interviews
and documentation and focuses on travel and subsistence (ie payments
to meet daily or overnight costs away from the main place of work).
Some people and organisations wanted to remain anonymous and this
request has been respected in this note. We are continuing to
explore arrangements in other organisations to provide a wider
picture.
SUMMARY
2. The following provides a summary of the
main points, for the public and private sectors. More detailed
notes are provided in the annex.
Public sector
— There is no single arrangement in
the civil service; this disappeared when pay and grading was devolved
in the 1980s. In some cases (eg Foreign and Commonwealth Office
and Ministry of Defence), payment is only made on the basis of
actuals within upper limits, with receipts expected in all cases.
In others (eg Department of Health) staff can claim a flat rate
without receipts, the amount varying depending on the length of
time out of the office. In only one case so far (again, Department
of Health), staff above grade 7 can self-authorise but mostly
this is not permitted. In other cases claims are checked by a
line manager or other authorising officer. Examples of arrangements
are included in the annex.
— The information provided for an NHS
Foundation Trust, County Council and Police Authority shows that
receipts are required for all claims, including for executive
and non-executive directors, and that self-authorisation is not
allowed. There are minor differences between organisations in
what can be claimed, some allowing taxis and alcohol with meals,
for example, others not.
— All those explored so far use the
HMRC rates for mileage, as currently used by the House of Commons.
Private sector
— Information provided by a membership
organisation representing businesses indicates that, although
there may be minor variations in what can be claimed within their
member organisations, the process is pretty standard: receipts
are required, which are checked and approved by someone else,
including at director level.
— The arrangements for the representative
body itself, which is run by members for members, and is funded
out of membership subscriptions, are that salaried staff can claim
reimbursement for reasonable expenses incurred, receipts are always
required and self-authorisation is not allowed, even at senior
levels.
— The business members who act as volunteers
to help run the organisation can claim an attendance allowance
for meetings actually attended (£80 per day) and expenses
for travel and subsistence. Receipts are required and are checked
and authorised by the finance department.
CONCLUSION3. In
general, organisations have been wary of providing evidence, especially
those in the private sector. It is not possible to draw firm conclusions
from the material researched so far, although it does begins to
suggest that it is now pretty standard to require receipts for
all travel and subsistence claims in the private sector, with
flat rates now certainly no longer being standard in the public
sector. The number of organisations reviewed is small so far and
others will continue to be researched with a further report compiled.
4. Other sorts of expenses exist in the
private sector, such as entertaining clients. We have not found
it easy to explore this area and arguably it is not relevant.
But oversight exists even at senior levels and a reasonableness
test applies.
Annex A
INFORMATION ON
EXPENSES ARRANGEMENTS
IN OTHER
ORGANISATIONS
1. For the three types of organisation within
the individual's experience, discussions were held about:
— Whether checks were carried out.
County Council
2. For many years Councillors had claimed
an hourly rate for attending meetings and travelling time and
had also claimed for mileage at rates which were set nationally.
About 12-15 years ago, legislation was introduced which allowed
Councils to pay Councillors a Basic Allowance (eg £5,000
per annum) which covered attendance at meetings, time for reading
Council papers and attending to constituency work. The allowance
also covered the cost of telephone calls and sending letters on
Council business. In addition Special Responsibility Allowances
could be paid to leading members (eg the Leader and Committee
Chairmen) to cover their additional responsibilities. Councillors
had a Common Room where they could meet and have coffee and some
limited secretarial support was available, mainly for the senior
members.
3. Councillors and directors could claim
for mileage, train fares, parking and hotel accommodation. Claims
by councillors were checked by the committee secretariat, who
knew which meetings had been attended. Claims by directors were
checked by the Chief Executive, and claims by the Chief Executive
were checked by another director. There was no self-authorisation.
In all cases claims were checked to see whether the type of expense
and amount claimed were reasonable and appropriate and that the
necessary evidence had been provided.
4. Other than for mileage (for which the
rate was the standard HMRC rate), claims were made on the basis
of actual costs incurred and receipts were required for all items.
There was no specified limit, for example for hotels, but it was
understood that costs should be modest and levels could be challenged.
For overnight stays, claim could only be made for accommodation
and meals, but not for items bought from the minibar, video charges,
or wine with the meal.
5. Class of travel was changed from first
class to standard class. An exception could be made if a group
was travelling together and needed to work/discuss.
6. Disputed claims were brought to the attention
of the Chief Executive, who would decide whether or not to approve
them.
7. As a result of one routine audit check,
a Member was found to have claimed, on a number of occasions,
for lunch and travel twice for the same day (he had been attending
meetings of one Council in the morning and meetings of a different
Council in the afternoon in the same town). He was interviewed
by the Chief Executive, which resulted in his resignation.
POLICE AUTHORITY
8. Similar rules applied to Police Authority
members, which included local authority members, independent members
and magistrates. In addition to claiming expenses for travel and
meals (based on actuals), members were paid an allowance, as for
Councils, to cover time spent reading papers, attending meetings
etc. In one case, a magistrate member had been given paid time
off to attend meetings and so to avoid him being paid twice (ie
once by his employer and once through the Authority's allowances),
agreement was reached with his employer about him taking some
unpaid time for his Authority duties and then being able to claim
the Authority's allowance.
9. Members could claim the cost of overnight
stays, if required, on the basis of actuals within an upper limit.
10. County Councillors and members of the
Police Authority were loaned computers and given consumables for
printing committee papers. Computers remained the property of
the authority and had to be returned on departure.
11. In both organisations, taxis were only
used exceptionally; members were expected to use public transport.
HOSPITAL NHS FOUNDATION
TRUST
12. Non-executive directors receive a fee,
or annual allowance, for carrying out the role. For some Trusts
this is set nationally but for Foundation Trusts they can set
their own figure through an independent Board of Governors representing
the community (which includes representatives of the local authority,
primary care trust, local residents), but based on guidance on
what is paid elsewhere.. This might be in the region of £40,000
for the Chairman and £12,000 for others. It is in effect
an attendance allowance although no check is made on actual attendance.
13. In addition to the allowances, non-executives
can claim travel from home to the hospital (train or mileage),
and for attending meetings or conferences away from the Hospital.
Free parking is provided at the Hospital but meals are paid for
( at the discounted staff rate). Mileage had formerly been 44p
but is now based on the HMRC rate of 40p. If overnight stays are
required for meetings or training courses, these are generally
booked and paid for the by hospital. If for any reason flights
are necessary, these are also booked by the hospital.
14. Claims are checked by the Trust Board
secretary, who knows which meetings have been attended. Claims
by employed executives are checked by the Chief Executive and
the Chief Executive's claims are checked by the Chairman.
15. Reality and the rules are closely aligned.
Any exceptions are sorted out individually, and are agreed on
a once-off basis.
Note of a meeting with a senior employee of a
business association March 2008
1. The discussion covered:
— Whether checks were carried out.
2. The association represents over 200,000
companies and entrepreneurs. It is run by a combination of paid
staff and volunteers from the business members. The latter receive
an attendance allowance for meetings attended (£90
per day). They can claim expenses for travel and subsistence
as follows:
3. Travel: HMRC rates for mileage;
train based on cheapest fare (first class allowed if demonstrably
cheaper than standard fare at time of booking); air travel—standard
class; no family travel; can claim station and airport parking;
congestion charge generally excluded although there are some exceptions.
Receipts are required for all journeys other than by car, for
which the claimant must provide details of journey against which
to verify mileage claimed. Taxis are allowed although overuse
is discouraged and may be challenged. Airmiles can be retained
for personal use.
4. Accommodation: London, Brussels
and similar overseas cities, up to £100; elsewhere up to
£75. Receipts required.
5. Subsistence: maximum rates apply:
£5-£15 for 5-10 hours away from home/office; £10-£30
for over 10 hours away from home/office. Receipts are required
(credit/debit card receipt not acceptable), but where these are
difficult to obtain, a maximum of £5 for any one meal can
be claimed without a receipt for 5-10 hours away and £10
for over 10 hours away
6. Authorisation: self-authorisation
is not allowed. Claims received later than 3 months of the expense
being incurred may not paid. Claims are returned if the forms
are not completed correctly and if the relevant evidence is either
not attached or does not tally.
7. The same rules for travel and subsistence
apply to the organisation's paid employees, with travel being
booked by an agency rather than personally, to achieve best price.
8. The organisation has offices around the
country. Payment of office equipment is handled centrally, and
details held on an asset register. A bar-coded asset label is
sent to the regional office for attaching to the item. Random
audits are conducted to check that equipment is in the office
for which it was purchased.
9. In terms of sanction, this can ultimately
be dismissal at both the paid staff and volunteer level
10. The organisation confirmed that these
basic rules applied across their member businesses, with minor
variations only in what can be claimed rather than the process.
Receipts were required and self-authorisation was rare. Petty
cash was often an area of close attention, with all expenditure
requiring receipts. It was often managed at senior levels to send
the message that the organisation took the whole issue of expenditure
at whatever level seriously.
CIVIL SERVICE
Department of Health
Day subsistence: £5 for 5 hours out of
the office, flat rate.
Night subsistence: hotels are booked centrally
so can rarely be claimed for. £20.50 overnight subsistence
rate for meals.
Grade 7 and above self-certify claims.
Foreign Commonwealth Office
Subsistence and rates of night subsistence in
the UK (for all staff)
Bed and Breakfast ceiling (receipts required):
inner London £120, elsewhere £ 80
Residual Subsistence (London & Elsewhere):
| Lunch | Actuals up to £5
|
| Dinner | Actuals up to £20
|
| Personal expenditure | £3
|
| Travel | Actuals |
UK Rates of Day Subsistence (all staff from 1 April 2001):
| |
| More than 5 hours | Actuals up to £ 5
|
| More than 10 hours | Actuals up to £10
|
| |
Ministry of Defence
Subsistence rates: do not pay Day Subsistence Allowance or
an overnight allowance for meals. Instead pay actual receipted
costs of necessary additional expenditure for subsistence incurred
during the day, or for evening meals, where appropriate.
Incidental expenses allowance: £5 in the UK is still
payable where employees have to stay overnight.
Crown Prosecution Service
UK Rates of Day Subsistence
5-10 hours absence—up to £4.50 subject to the
provision of receipts
10-12 hours absence—up to £9.75 subject to the
provision of receipts
Over 12 hours absence—up to £13.55 subject to
the provision of receipts
Subsistence and rates for overnight absences:
Hotel—actuals within a specified ceiling depending
on which town/city, for bed and breakfast.
24hr meal allowance (ie dinner and lunch): Flat rate—£21
plus the appropriate amount of day subsistence must be deducted
if a meal is provided by the host during the 24 hour period.
Personal Expenses Allowance: Personal incidental allowance
£5
Department of Works and Pensions
Day Subsistence allowances:
(i) More than 5 hours all grades £ 4.75 at least
one meal purchased
(ii) More than 10 hours all grades £ 9.30 at least
two meals purchased
Overnight stays:
The actual cost of bed and breakfast will be reimbursed.
In addition an allowance will be paid to cover meals: all
locations £21.00
Personal or incidental expenses allowance: £5 per night
| 
