“Because third-party travel has become material to APFC’s travel budget and is part of the regular duties to carry out the purpose of some of our asset classes, we are requesting additional budget authority to be transparent in our accounting of these trips,” the fund presentation this month said.
The cost of each trip would be offset by reimbursements from the organizations providing the travel. General partners in APFC investments would be among those reimbursing the state.
“The reimbursements or receipts for direct pay will be recorded as revenue and the corresponding expenses will be charged against it,” the fund said. The $250,000 target would not be a state expense, but an estimate of the value of third-party travel that might take place over a year.
The fund said the new proposal “is in alignment with the Alaska Administrative Manual for third-party reimbursements.”
That manual says: “Payments by a third party for state agency travel expenses must be recorded appropriately in the state financial system. If the travel is material to the agency’s travel budget and is part of the agency’s regular duties or is connected with carrying out the purpose of the agency, the costs must be recorded as an expenditure with an offset recorded as a revenue. If the state incurs the expenditure and is reimbursed by the third party, the reimbursement is to be recorded as revenue.”
“The third party should be instructed to reimburse the state directly for the travel expenses to reduce potential tax consequences to the traveler. When this is not possible, any third party reimbursement made directly to the traveler for travel expenses, per diem, and/or meal allowances shall be turned over to the traveler’s state agency for deposit into the state treasury.”
The state rules also say that reimbursement should be limited to travel expenses, per diem or other allowances permitted by state policies. Honorariums are not allowed.
“Any time a third party is paying for a traveler’s travel expenses, the state agency must avoid the appearance of or the fact of any conflict of interest. The agency should also ensure the transaction does not violate the code of ethics and if there is any question, the Department of Law should be consulted on the matter,” the manual says.
Increased disclosure of APFC travel is a good thing and will be endorsed by the Legislature. Meanwhile, the Legislature will ask more pointed questions about increasing the budget for other travel.
“There is also a $166,000 request to increase staff travel, primarily investment staff for asset visits, due diligence, and attend industry-standard conferences and trainings. There is also a request for increase travel costs for the Board as well as a small increase related to non-employee travel and/or relocation.”
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