Principals of good financial management call for having a valid
accountable plan for employee expense reimbursements for all
businesses or organizations, whether for-profit or not-for-profit.
The IRS lists three rules for a reimbursement or allowance
arrangement which all must be met in order for the plan to qualify
as an accountable plan. They can be summarized as follows:
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Expenses must have a business connection;
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Expenses must be adequately accounted for within a reasonable
period of time; and
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Any excess reimbursement or allowance must be returned within a
reasonable period of time.
These rules make sense and should be applied in any case to
assure that employee expense reimbursements are for verifiable,
legitimate business purposes. The challenges of running a
not-for-profit organization make them even more necessary. Without
clear policies and procedures in place, your organization could
come under scrutiny from the board of directors,
