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Thursday, July 28, 2016

Important New Law Requires Adoption of Local Expense Reimbursement Policy

We previously reported on a bill introduced this session that would establish certain obligations on local governments regarding reimbursement of local officials' expenses. That bill previously passed the Illinois Senate and House, and has now been signed by the Governor as P.A. 99-604

The Local Government Travel Expense Control Act applies to school districts, community college districts, and all units of local government except home rule units. Illinois defines "units of local government" to include counties, municipalities, townships, special districts (i.e., park districts, library districts, fire protection districts, etc), and various other units of local government. 

The new law places two new obligations on units of local government: (1) to adopt by ordinance or resolution a local policy on expense reimbursements and (2) to approve by roll call vote of the corporate authorities any expenses that exceed the maximum allowable reimbursement established by the local policy. The new law also prohibits any unit of local government from reimbursing entertainment expenses. The law is summarized below.

1.   Adoption of Local Expense Reimbursement Policy

The first requirement (section 10 of the new law) takes effect on January 1, 2017, so covered local governments should make sure that they have adopted a local expense reimbursement policy by the end of the year. That policy must include, at a minimum, the following:

1. The types of official business for which travel, meal, and lodging expenses are allowed.
2.  The maximum allowable reimbursement for travel, meal, and lodging expenses.
3.  A standardized form for submission of travel, meal and lodging expenses that includes spaces for the following information:

  • an estimate of the cost of travel, meals or lodging if the expense has not yet been incurred or receipts for those expenses if they have already been incurred;
  • the name and job title or position of the individual requesting reimbursement;
  • the dates and nature of the official business in which the expenses were or will be expended.
2.  Approval of Expenses

In addition to adopting a formal policy, section 15 of the new law requires covered units of local government to formally approve any expense that exceeds the maximum allowed under the local policy.  That approval must be by the corporate authorities and by roll call vote at an open meeting.  

3.  Prohibition on Entertainment Expenses

Section 25 of the new law prohibits a covered unit of local government from reimbursing any government official or employee for "any entertainment expense." These are defined to include the following:
  • shows
  • amusements
  • theaters
  • circuses
  • sporting events
  • any other place of public or private entertainment or amusement unless ancillary to the purpose of the program or event
So, covered units of local government will have to put together and approve a local reimbursement policy, and ensure that any expenses reimbursed by the government comply with that policy as well as the statutory ban on entertainment expenses. The law contains different (and seemingly inconsistent) time triggers for compliance with the mandates in this statute (180 days for section 10 and 60 days for section 15). A conservative approach would be to have a policy in place before January 1st of next year.

Post Authored by Julie Tappendorf


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