Traveling on the Government’s Dime: What You Need to Know About Federal Grant Travel Expenses

Have you been awarded a federal grant with travel expenses included within the approved budget? I have, and even if it’s the smallest part of your overall grant budget, it can cause the biggest heartache if not given proper care and attention. Ask me how I know…

The federal government has strict guidelines outlined in 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) that must be followed when using grant funds for travel-related costs. Failure to follow these regulations can lead to serious consequences, including having to return misspent funds or being disbarred from receiving future federal funds.

None of us want that to happen. Kimberly and I break down the ins and outs of traveling with federal funds on the latest episode of the Fundraising HayDay Podcast HERE.

The Basics of 2 CFR Part 200 Travel Regulations

Under 2 CFR Part 200, travel costs (found in Section 200.475) are allowable as either direct or indirect expenses on federal grants. However, these costs must meet specific criteria:

• Expenses must be reasonable and necessary for the performance of the grant.
• Travel must be allocated consistently across all activities of the organization. In other words, grant funded travel is not “special.” You should follow your organization’s typical travel policy, even when grant funds are involved. Heck, I’d say ESPECIALLY because grant funds are involved.
• Commercial air travel must be at the lowest reasonable and least restrictive commercial airfare. Sure, there are some exceptions, but as a general rule you are flying coach, not first class. We delve into this specific topic on the podcast.
• Lodging and meal costs must follow your organization’s established travel policy rates. If none exists, you must use federal per diem rates. Don’t know what those are? Check out the General Services Administration website HERE and enter the city you will be visiting for daily rates. And trust me, you’re probably enjoying chicken at the Holiday Inn rather than steak and lobster at the Four Seasons.

Additionally, 2 CFR Part 200 requires organizations to maintain detailed documentation for all travel expenses charged to a federal award, including receipts, purpose of travel, dates, and approval signatures.

Pitfalls to Avoid When Expensing Travel on Federal Grants

Failing to follow the regulations in 2 CFR Part 200 can have serious ramifications for your organization. Here are some common pitfalls to avoid:

1. Inadequate documentation: Not maintaining proper receipts, travel authorizations, and justifications for travel costs is a surefire way to raise red flags during an audit. Detailed record-keeping is essential. If the three elements of successful real estate sales are location, location, location; then the three golden rules of grant management are DOCUMENTATION, DOCUMENTATION, DOCUMENTATION.
2. Luxury or excessive travel expenses: While the regulations allow for reasonable travel costs, splurging on luxury hotels, first-class flights, or excessive meal expenses is strictly prohibited when using federal funds. These receipts will not go unnoticed by a funder.
3. Improper cost allocation: Travel expenses must be allocated consistently across all of your organization’s activities, including non-federal projects.
4. Unnecessary or unjustified travel: All travel charged to a federal grant must be reasonable, necessary, and directly related to the grant’s scope of work. Personal travel, side trips, or unnecessary expenses will not be reimbursed.
5. Noncompliance with organizational policies: In addition to federal regulations, your organization’s own travel policies must be followed when expensing travel to a federal grant. If the federal agency will fund an item of travel, but your organization’s policy does not allow it, then you have to follow your policy. For example, 2 CFR Part 200 regulations state that if travel is for six months or more, you can use federal funding to pay for your dependent’s travel. If your organization’s travel policy does not include the same clause, then the federal funds will not cover that expense.

The Importance of Training and Oversight

To avoid these pitfalls and not end up on an episode of Fundraising HayDay’s “Ripped from the Headlines,” it’s crucial to provide comprehensive training to staff on travel expense policies and regulations. Additionally, implementing robust internal controls and oversight processes can help ensure compliance and catch potential issues before they become larger problems.

Failing to follow federal travel regulations when using grant funds can have severe consequences, including having to return misspent funds, paying penalties or fines, and potentially losing the ability to apply for grant awards in the future. By understanding and adhering to the guidelines outlined in 2 CFR Part 200, your organization can confidently use grant funds for necessary travel while remaining fully compliant with federal requirements.

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Amanda Day

Amanda Day, GPC, is a national trainer and speaker. With 20 years of grant prospect research, writing, and management experience, she has the knowledge, know-how, and stories to keep every workshop participant and conference attendee engaged and better prepared to succeed in the grant profession. She is well versed in federal and private grant funding, as well as educating up and using your professional network to best build career path. Her passion lies in preparing grant professionals to successfully fund their organizational and community needs, along with meeting their personal career and leadership goals.

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