The Salvation Army

Travel and Expense Reimbursement Policy

Alexander A. Narvaez
7253134
December 3, 2015
ADM3360
Professor Giles LeVasseur

Executive Summary
Subject Matter
The following paper was commissioned to cover the policy for reimbursement of travel
and expenses of The Salvation Army, but more specifically the paper will focus primarily on the
clauses within the policy. This paper will explain the business polices and procedures that
employees of the organization must adhere to when dealing with matters in relation to travel
expenses and its reimbursements.

Key Findings
Legal principles related to this travel policy can vary from legal risks to potential
disputes among the company and its employees, which will also be covered. There are a range of
issues that can be found, as the policy does have some discrepancies that could lead to potential
issues between management and its employees and officers. After careful review of the policy,
one will learn the kind of leverage that can be found in the case of a potential issue. In regards to
a situation, there may be a time where the Salvation Army may find themselves accountable for
the expenses of their employees/officers; even if they refuse to or dont believe that they are
liable.

Recommendations

The corporate credit card should be removed completely from employee use
Make the travel reimbursement policy into a contract that must be signed and followed by

all employees whom travel on behalf of the organization

Employers should give exact dollar figures as to what is the maximum that could be
covered by the organization in all expenses

Personal items should always be covered by the employee and the company should have
no involvement in such matters

Introduction

The Salvation Army is a non-profit organization with the purpose of providing social
services to those in need in our Canadian Communities, and this help can range from anything
such as clothing to shelter. The organization provides assistance to over 400 communities
nationwide, and has been around for over a 130 years. The following piece will cover what and
how travel expenses in the organization are covered and reimbursed, the restrictions that may
apply, and the process and requirements to ensure the employee protects themselves to be
reimbursed appropriately. The Salvation Army is an organization privately owned, yet funded
and primarily ran by public donations, government funding, and other foundations, hence why
unnecessary or excessive expenditure can be a matter that affects the company greatly.

The objective of this paper is to find out if both employees of The Salvation Army and
The Salvation Army protect itself properly in the process of reimbursement in regards to travel
expenses for business purposes. After further analysis of the clauses, along with the legal
principles covered in class we can closely observe the use of the clauses and how they protect the
organization from unreasonable or non-legitimate expenses.

An issue any organization may find itself in especially when it comes to travel expenses,
is the abuse of power from part of the employees or officers of the company. Technically, since
they are handed a corporate credit card in the case of The Salvation Army, the employee is free to
do as they please with it and could take advantage of the companys funds. When handing that
type of power to the employee they could put themselves in a position of using that money to
their benefit, and in the end the company will find itself held liable. Hence why companies must
set these specific rules and clauses and protect themselves as much as possible. The policies

allow the employees to be thoroughly informed of what the company is willing to cover in terms
of traveling and what is the process or steps that must be taken to insure reimbursement, and they
allow the company to be protected from any legal risks that they may find themselves in.

In terms of company stakeholders, the organization must consider that anyone donates or
contributes to this organization can be considered a person with interest in the company. If
donors, foundations, the public were to know that an organization such as The Salvation Army
were misspending company funds, the affects it could have could be massive. If the public or the
government were to stop supporting The Salvation Army cause, so many people would be left
out on the streets and so many programs provided by The Salvation Army would not be funded
any longer.

We will take a look at the clauses themselves and closely explore the conditions, and
rules that must be followed, and how they can affect all parties involved in the organization.

Clauses

3. Accommodations
3.1 Reimbursement for accommodations at a hotel, motel, or bed and breakfast facility while
travelling on official business may be made up to a maximum of $130.00 per night plus
applicable taxes. Charges should be for accommodations and private bath in a business class
facility. If ones spouse is accompanying an individual on business travel at personal expense,
any additional room charges for the second person are a personal expense.
3.2 In choosing accommodations, judgment should be used when exceeding the cost of the
maximum accommodation rate will still result in savings due to the ability to avoid the expense
of a rental car, to reduce or eliminate cab fare, or because breakfast is included in the nightly
rate. Such rationale should be documented on reimbursement claims.
3.3. If an officer or employee stays with family or friends instead of incurring accommodations
expenses, reimbursement may be made for a token gift to the host of up to $50 per stay of up to
three days, and $100 per stay of more than three days.
3.4 In certain circumstances, it may not be possible to secure accommodations within the
maximum rate allowed, even after consideration of other issues, as explained in 3.2 above. In
such circumstances, the refund claim should include a statement explaining why the rate was
exceeded. The approving officer will determine the reasonability of such claims.
The clause above goes into detail of what are the costs that can be incurred in regards to
accommodations on a per night basis and for whom these costs coverage applies. As an
organization whose main purpose is to help the general population in need, they should and will
be as cost efficient as they can to ensure no more money then necessary is being spent on

business related expenses. In terms of the possibility of staying with friends and or family,
although not mentioned, the company should require some sort of receipt or form of proof that
there was a token gift, and not money potentially taken by the agent or employee of The
Salvation Army. In regards to the possibility of exceeding the maximum rate allowed, the
company should find an efficient way to show a list of potential places to stay, giving said agent
potential places to stay, while still remaining within the allowed rate per night. This is due to the
potential that the agent might have an excuse to exceed said allowed rate and the organization
truly has no way to prove whether his reasoning is accurate or not.
4. Automobiles
4.1 Officers and employees using vehicles leased by The Salvation Army:
a) Reimbursement will be made for the following costs which are charged to the leasing program
maintenance card):

Gasoline while on duty and within 50 kilometers from home while off duty. Gasoline used
for trips of more than 50 kilometers while off duty and all gasoline while on vacation is a
personal responsibility. No reimbursement shall be made for premium gasoline under any

circumstances.
Basic car washes, up to a maximum of once every two weeks. Depending on weather and
geography, less frequent washing may be reasonable at times. Efforts should be made to
wash vehicles by hand during the summer months whenever possible to minimize costs.

No reimbursement shall be made for detailing services.

Oil changes, lubrication, and other routine maintenance as recommended by the

manufacturer.
Winter tires, except in the following areas of the territory: Ontario (south of Barrie),

lower mainland of British Columbia, Vancouver Island (Note: DHQ officers who live in
these areas, but are required to drive to other areas in their division where winter tires

are desirable, may acquire winter tires if necessary to ensure safe driving).
Windshield washer fluid.
Major repairs and maintenance as authorized in advance in accordance with the
maintenance instructions provided to each driver.

b) The following expenses cannot be charged to the leasing program maintenance card, but may
be reimbursed upon presentation of valid receipts:

Reasonable expenses incurred for rubberized floor mats for winter driving.
c) The following expenses are not reimbursable:

Automobile detailing services.

Air fresheners.
Automobile accessories such as coolers, electrical voltage adapters, center consoles and

other storage units, etc.

Automobile cleaning products, such as car wash soap, brushes, buckets, etc.
Windshield tinting.

d) Every effort should be made to use the P.H.H. card for automobile expenses whenever
possible. Under extenuating circumstances, a corporate or personal credit card may be used,
provided that a reasonable explanation accompanies the request the reimbursement.

4.2 Officers who receive a monthly allowance for a personally owned vehicle
a) Reimbursement will be made for the following expenses upon presentation of valid receipts:

Gasoline (in accordance with the same terms set out above for leased vehicles).

Routine oil changes and lubrication.

Windshield washer fluid.
Insurance premiums (in accordance with Operating Policy 401)

b) No other costs related to a personally owned vehicle are reimbursable.

4.3 Officers and employees who use a personally owned vehicle for occasional business use and
do not receive a monthly allowance

Reimbursement will be made for business travel authorized in advance by the supervisor

and paid at a rate of $0.40 per kilometer.

A rental vehicle should be used whenever the total costs would be less than the
reimbursement for use of a personal vehicle.

4.4 All officers and employees No reimbursement can be made for traffic or parking fines and
offences, regardless of the circumstances. In every case, the driver is personally responsible for
all fines incurred whether driving a Salvation Army vehicle or not, and whether on business or
not.
This clause determines what expenses are covered in terms of the use of any personal
or company owned vehicles, and expenses that may come with the maintenance of a vehicle.
This clause truly breaks down in detail what is and isnt covered by the organization whether it
ranges from the use of gasoline, or washing the vehicle. Although a major discrepancy might be
found with the implied lack of need of winter tires for vehicles south of Barrie in Ontario.
Although it may be an additional cost, it should be covered by the company regardless, not only
for safety of the agent but also because vehicles with winter tires under Ontario government
receive a discount on their insurance policy, and according to clause 4.2 the company does cover

Insurance Premiums, thus would not only provide a discount on insurance but ensure that agents
travelling in vehicles are riding in a safer vehicle whether personal or company owned vehicle.
5. Cash Advances
Cash advances are normally not provided to individuals to meet out of pocket expenses. In all
cases, individuals who are travelling should use their corporate credit card or if a corporate
card is not available, use a personal card and claim reimbursement upon their return. If there
are exceptional circumstances warranting a cash advance, such as a trip to a country where use
of a credit card is not possible, a full accounting should be provided within five business days of
the conclusion of the event, or return from the trip for which the advance was provided.
This clause discloses the procedure necessary to obtain cash if needed and the company
protects itself from having to cover any expenses that may come through cash purchases if
procedure isnt followed as disclosed. With the use of a credit card the company, not only
ensures but controls and sees what and why purchases were made, unlike with cash, they dont
have the same kind of control, hence why they require full accounting.
6. ENTERTAINMENT
Personal leisure and entertainment expenses including, but not limited to, movies, exercise
facilities, sporting events and activities, theatre productions, tourist attractions, sightseeing trips
are not reimbursable from Salvation Army funds under any circumstances, whether incurred on
travel or at home, for personal enjoyment or while entertaining guests.
In this clause the company has released itself from any responsibility to cover any expenses that
may be done while traveling for the purposes of entertainment, and they will not reimburse the

employee even if said entertainment was done in the benefit of the business.

7. GIFTS TO OFFICERS AND EMPLOYEES

7.1 Gifts purchased for a farewell or retirement event, in accordance with Operating Policy
4904, are reimbursable.
7.2 Gifts purchased to acknowledge employee service milestones, in accordance with Section
17.05 of the Employee Relations Policies and Procedures Manual, are reimbursable.
7.3 A gift of a token amount (under $50.00) may be used to acknowledge other significant
milestones (e.g. conferring of a degree or professional designation, etc.).
7.4 Except as expressly provided for under the terms of Salvation Army policy, no other gifts may
be reimbursed.
This clause protects the company from having to cover any non-approved items or events
that may be given to coworkers or colleagues for any reason other then that of a major
accomplishment or retirement of some sort.
8. GRATUITIES
Reimbursement may be claimed for gratuities paid in the course of incurring business
expenditures, as follows:

Baggage handling porters or valets $2.00 per occurrence.

Taxicab drivers up to 15% of the fare.
Housekeeping staff in hotels/motels $5.00 for the first day, and $2.00 for each

additional day.
Restaurant wait staff up to 15% of the cost, excluding taxes, unless a higher amount is
automatically added to the bill by the restaurant

This clause ensures that not only the employees make sure they give gratuities when going on
business expenditures under The Salvation Army name, but also ensures there is a maximum
number of gratuity that can be given and covered. Anything more then that mentioned above,
must be assumed as a personal expense.
9. HOME OFFICE
9.1 When The Salvation Army requests that an officer or employee establish an office in his/her
home as their primary place of work, the following costs are reimbursable based on the
presentation of valid receipts for reasonable expenditures:

Telecommunications internet, telephone.

Office furnishings desk, chair, lamp, bookcase, credenza
Office equipment printer, scanner, fax, computer and accessories

9.2 Where costs of telecommunications are shared for both business and personal use, they shall
be prorated accordingly for reimbursement. In the absence of evidence to the contrary it shall be
assumed that personal use is 50% and business use is 50%.
9.3 In cases in which officers and employees periodically work in a home office, even though it is
not the primary place of business, the Army will generally not cover all costs of maintaining a
home office, such as internet, telephone, equipment and furnishings, but may make certain
equipment, such as a small printer or a laptop computer, available for this purpose and may
reimburse the officer or employee for the cost of supplies consumed (e.g. paper, printer ink, etc.).

The supervising officer/employee will make the determination as to which costs may reasonably
be refunded in these circumstances.
This clause allows employees who have stationed their offices in their homes, the
breakdown on what is and is not covered. To start off at all times for validation and record
keeping purposes the employee must always keep record of what and how money is being spent,
meaning a copy of the receipt is necessary to ensure reimbursement. The employee must also
keep in mind that all expenditures on the behalf of the business for said home offices must be for
reasonable purposes. If the company does find an expenditure unreasonable or excessive they are
in the right to refuse reimbursement, as they clearly state in clause 9.1 Costs are reimbursable
based on the presentation of valid receipts for reasonable expenditures. Also, in regards to the
telecommunications being used, unless proven otherwise, The Salvation Army has the right to
assume that these telecommunications are use for both personal and business use, thus allowing
them to only have to reimburse 50% of the cost for this. It must also be considered that even if
work is to be done periodically at home, not all expenditures can be expected to be covered,
especially if you also work in the office and home office.
10. INSURANCE
10.1 Flight cancellation insurance may be reimbursed for all business related travel.
10.2 Travel medical insurance may be reimbursed for all business related travel outside the
country, including Canadian personnel visiting Bermuda on business, and personnel in Bermuda
visiting Canada on business, as well as destinations outside the Canada and Bermuda territory.
This clause ensure that the agent is covered at all times for reimbursement if needed for

insurance. If and when the employee is travelling due to business reasons under The Salvation
Army, it will cover any flight cancelation insurance or medical insurance costs incurred.
11. LAUNDRY & DRY CLEANING
Normally, costs of laundry and dry cleaning are a personal expense; however, when a business
trip is planned for more than seven days or lasts longer than planned if less than seven days,
reasonable costs of laundry services and dry cleaning may be reimbursed.
This clause allows for employees whose trips last longer then seven days or longer than
planned to have their laundry and dry cleaning expenses covered as long as they are once again
at a reasonable cost. Although, the clause does in fact say may be reimbursed meaning it is
most likely at the discretion of the supervisor or whoever is making the decision.

12. LUGGAGE
The Salvation Army does not cover the costs of luggage, except for reasonable costs incurred to
purchase a carrying bag or briefcase for a Salvation Army owned laptop computer. Where
individuals are required to travel with supplies of paper, handouts, etc. for meetings or
presentations, a separate carrying bag or briefcase may be reimbursed for this purpose.
This clause insures the company does not have to pay for any kind of luggage other then that
of a bag for a company owned laptop or briefcase for anything needed to store company related
items such as paperwork or handouts. As other clauses mention, this may be reimbursed, and it
seems to be at the discretion of the company and within reasonable cost. If the company fails to

find it within reasonable cost, it will not be obliged to reimburse the cost.
13. MEALS
13.1 General
a) No alcoholic beverages may be reimbursed under any circumstances.
b) All claims for reimbursement should include documentation explaining the reason for the
meal expense.
c) The Salvation Army does not generally reimburse individuals for beverages and/or snacks
except to the extent to which they have been consumed in place of breakfast, lunch or dinner, and
subject to the meal and daily limits set out below. Expenses incurred to purchase coffee and
other beverages are generally a personal responsibility. Reasonable costs incurred for coffee
and other non-alcoholic beverages and snacks may, however, be claimed for meetings involving
staff and guests.
13.2 Travelling on official business
Meals will be reimbursed based on the presentation of original receipts up to the following
maximum amounts (excluding taxes and gratuities):Breakfast $11.00 plus taxes and maximum
15% gratuityLunch $16.50 plus taxes and maximum 15% gratuity
Dinner $27.50 plus taxes and maximum 15% gratuity
Maximum rates per individual meal may be exceeded provided the total cost for the day does not
exceed $55.00 plus taxes and maximum 15% gratuity.The 15% gratuity may be exceeded where
the restaurant automatically adds a gratuity to the bill.The maximum daily rate for meals may

only be exceeded in exceptional circumstances, with an explanation provided on the claim for
reimbursement. The approving officer will determine whether such claims are reasonable under
the circumstances.
13.3 Entertaining guests for meals
When it is necessary to incur a meal expense with a guest, meals will be reimbursed based on the
presentation of original receipts up to the maximum amounts outlined in section 13.2 above.
13.4 Entertaining other officers or employees for meals
Normally the cost of entertaining other officers or employees for meals is not reimbursable,
except in unusual circumstances. Such circumstances would include time limitations (extended
work day or need for a meeting when only the lunch hour is available), the nature and sensitivity
of matters to be discussed, employee promotion or job performance, etc. A full explanation of the
business purpose and names of all guests must be provided on the expense claim.
13.5 Counseling or pastoral care where identification of guest is not appropriate
Officers or employees in positions in which they must meet with someone for the purpose of
counseling may forego the need to identify the other person, provided they have been identified
to the person authorizing the expense refund, and he/she adds a note to the claim indicating that
the identity of the guest has been revealed to them, and they deem it appropriate that his/her
identity not be revealed on the receipt.
13.6 Meals during attendance at special events
When attending special events at which attendance is mandatory, meals may be reimbursed by

claiming either the published allowance rate for an internal event, or if no published rate has
been established, by claiming meals with official receipts up to the current maximum amounts
outlined in section 13.2 above.
Meal costs where meals have been included in another reimbursable item (e.g. conference fees,
transportation, accommodation) are not reimbursable.
13.7 Entertaining guests for meals at home
When it is necessary to entertain a guest at ones home, a claim for reimbursement of meal
expenses may as follows: breakfast $6.00; lunch $6.50; dinner $7.00 (see Operating Policy
4907.

This clause outlines the requirements and conditions under which meals are reimbursable.
It is very clear on what kind of meals are allowed to be reimbursed and what the limits are. In all
scenarios no alcohol is to be reimbursed, and there is a daily limit of 55$ plus taxes and 15%
gratuities one can spend on daily basis when traveling, anything above or different from this is to
be considered a personal expense. As well when at events it must be shown proof of some sort
that if a meal was had, there must be some sort of proof of verification

14. PASSPORTS AND VISAS

The Salvation Army will not reimburse any individual for the cost of a passport or other travel
documentation routinely required to travel outside the country, unless such costs are incurred

solely for business reasons. The Salvation Army will not reimburse the cost of the NEXUS border
clearing program.
The Salvation Army will reimburse the cost of a visa or other specific documentation that is
required to enter another country specifically for Salvation Army business.
This clause protects the organization from having to cover the cost of any passports
renewal or obtaining visas, unless it is needed for the purpose of business travels. Under no
circumstances is the Nexus covered by the company, meaning it does not matter if it was used for
business purposes, it will not be covered.

15. QUARTERS EXPENSES

15.1 The following expenses are reimbursable for officers quarters provided by The Salvation
Army:

Major furnishings and supplies, in accordance with Operating Policy 4301.

Weeding and/or fertilizing contracts, landscaping and specified gardening equipment, in
accordance with Operating Policy 4917.

The clause allows for the reimbursement of any modifications that need to be done to offices,
in terms of furnishing and supplies indoors. In terms of outdoors of building or offices it allows
for the reimbursement of fertilizing and landscaping, meaning changes that may benefit the
appearance of the business of The Salvation Army may in fact be reimbursed.

16. TELEPHONE
16.1 Officers and employees may be reimbursed for reasonable and occasional long distance
telephone costs incurred in the performance of their position responsibilities.
16.2 Individuals who are required to make long distance calls from their home or other location
outside their normal place of business will normally be provided with a cellular telephone
equipped with a long distance plan to minimize such expenses.
16.3 Officers and employees who travel on Salvation Army business may be reimbursed for the
costs of calling home during their absence. Except in extenuating circumstances, such calls
should be confined to evening and weekend hours when rates are less expensive, and limited to
calls of a maximum of 20 minutes per 24 hour period.
16.4 While use of a business cell phone for personal use is permitted, any charges for personal
use including long-distance calls, roaming charges, and text messages, other than as noted in
16.3 above, are to be considered a personal expense. When presenting the cell phone invoice for
payment, claimants must show evidence of review and provide a signed statement that there are
no personal charges or alternatively show evidence that personal charges have been refunded.
This clause ensures the organization is only covering calls made on business trips,
whether it be national or international calls it can only be made with the purpose of business.
Personal calls can be limited to 20 minutes a day on a 24 hour per basis on the business phone.
Anything other then the permitted amount for personal use will be considered a personal
expenses and the company is in no obligation to pay for it, and will be under the responsibility of
the user. When presenting the invoice, the user must disclose what was business and what

personal if any, and anything personal must be disclosed, and the user must provide a signed
statement disclosing all necessary information for appropriate reimbursement.
17. TRAVEL
17.1 Officers and employees who travel for business purposes must always consider the costs of
travel and avoid them when business can be conducted as effectively by teleconference or
videoconference, with due regard to the importance of face to face dialogue in some
circumstances (e.g. the regular visits of DHQ staff to ministry units). When travel is required, the
most economical means must be taken, with due consideration to the time involved.
17.2 Travel arrangements should be made at least 14 days in advance, unless travel is being
made on an emergency basis.
17.3 In all cases, travel must be approved in advance by the individuals department head, for
individuals at THQ, or divisional commander for individuals at DHQ, divisional secretary for
business administration or area commander for individuals at ministry units, cabinet secretary
for department heads at THQ, and chief secretary for cabinet secretaries and divisional
commanders
17.4 If an individual is travelling on Salvation Army business and wishes to add on vacation time
in the destination, travel costs may be fully reimbursed provided no additional costs have been
incurred for the personal portion of the trip.
17.5 All additional rental car, accommodations and meals charges related to the vacation time
are a personal expense. Where charges cover both the period of business and vacation time, they
should be prorated for the purposes of determining the personal portion.

17.6 Boarding passes must be submitted with claims for reimbursement for air and rail travel.
17.7 Options for travel are as follows:
a) Air travel in economy class at the least expensive rate obtainable. Fees for advance seat
selection and meal voucher may be claimed for all flights of two hours or greater in duration.
When return travel dates or times may be subject to change, individuals should consider the cost
of fare changes in determining which fare class to book.
b) Rail travel at the least expensive rate obtainable. Additional cost of Via1 or other business
class may be claimed when trip exceeds four hours if total cost is still less than flying, including
meals, transportation to airport, parking, etc.
c) Officers who drive a leased vehicle provided by The Salvation Army or receive monthly
allowances for a personal vehicle are expected to drive whenever possible, provided there are
significant savings in gasoline, meal and accommodation costs that more than justify the time
required to be away from the appointment.
d) Individuals who have a personal vehicle for which no allowances are provided by The
Salvation Army may claim refund of business kilometers at the standard rate of $0.40 per
kilometer, in accordance with Operating Policy 0401, provided that the total expected cost of the
trip is less than that which would be incurred in renting a car. Gasoline costs may not be
claimed.
e) The cost of rental cars may be reimbursed when no less expensive form of transportation is
available. Reimbursement will be made for a compact car for one traveler, a midsize car for two
to three travelers, and a large car or minivan for more than three travelers. All individuals

renting cars should obtain collision coverage.

This clause covers all points regarding the travel from point A to point B through
whichever method any agent uses. For starters, it is always suggested that all times if it can be
avoided not to travel, as it always is an additional expenses incurred by the company. Meaning
using methods such as videoconferencing or even telecommunications should be used primarily.
Otherwise, if using methods of transportation, the cheapest method should be used whether that
be through bus, train, airplane, or even company vehicle. Arrangements and costs for the trip
must first be approved by the head of department and at least 14 days in advance. In the scenario
where an individual wishes to extend their stay for personal reasons, those additional costs will
be the responsibility of the employee, and said employee must separate the business costs from
personal costs.
Principles
1. Agency
Notion of Agency is where an agent in the formation of legal obligations represents a
principle. In the case of travel expense policy, the employee whom is travelling receives the
role of agent while the company The Salvation Army is the principle. That being said, any
time the company sends out an employee on a business trip, that employee is doing his
business on behalf of The Salvation army, meaning anything he does or how he spends
company assets reflects on the organizations values.
Anytime an employee goes on a business trip, and they are going on behalf of the
organization, they must assume that anything they do reflects heavily not only on themselves

but the organization as a whole. They are responsible for everything that is done, but also on
everything they potentially plan on spending their money on as the agent to the principle.
Considering The Salvation Army is a company that is primarily and solely funded by
donations, if an external party were to be exposed to an employee whom carelessly spend on
a business trip it would reflect poorly, since it just seems the company does not maximize its
full potential on its assets, and lets its employees benefit from it, rather then those whom
need it.

2. Authority
The authority is the one who enacts the rules or obligations. In this case of The Salvation
Army, the organization is the authority upon the employees. The organization has created
certain policies within the clauses that must be followed by the employees when it comes to
its business expenditures.
These policies range from how the employees should travel (cheapest Methods at all
times), to what is the maximum price on a meal. These policies create a strict budget for
employees whom go on business travels, and forfeits both parties from being held liable for
unreasonable expenses whether it be as the authority or as the employee.
The Salvation Army provides the employee with the authority to spend freely and at their
discretion. They give the authority for them to make decisions that require them to spend
money which they will likely either be taking from the company when reimbursed or charged
to the company on the company credit card, with such responsibility its assumed the

employee will do their best not to spend the organizations money carelessly.

3. Risk
In business there is always risk, and when entrusting employees with company
funds you always run a risk. As mentioned before when entrusting in employees the
organization runs risk of the employees misspending The Salvation Army, or trying to get
money reimbursed for the wrong reasons.
There are four steps to to be taken to identifying legal risks, and these steps
involve the following:
Step one consists of identifying the risk involved which also consists of being
aware of the authority involved, the decision making powers and the business
relationship. In the case of The Salvation Army they have given the employees authority
to spend as needed and get expenses reimbursed on their travels on behalf of the business,
in terms of the decision making they allow the employees to make the decisions in terms
of what and how they spend on their business travels, and the ability to get it paid for by
the organization and/or reimbursed. They are risking possibility misusage of company
money to the benefits of the employee.
Step two consists of looking at the potential consequences involved should
anything go wrong and the events that may occur and how severe they are. There is
always the possibility that an employee maxes out a credit card from the company, and
just decides to bail on the company, and leave them with the expenses. As mentioned in
class, as per the professors friend whom when he found out that his wife was cheating
with his company partner he decided to max out all company credit cards, and leave them
to figure it out on their own. This could happen to any company, even The Salvation
Army could have an employee who just takes advantage of the authority provided to

them and play the system.

Step three involves managing the risk. The Salvation Army could potentially
discontinue to provide employees with company credit cards, and apply all strict rules of
reimbursement policies to each and every employee. This way the employee has to be
more careful on how and what they spend their funds on, solely based on the fact that
there is no guarantee that they will get reimbursed if they carelessly spend their money.
When they have nothing to lose theyll take more risk thus putting the organization more
at risk when spending, that being said with this method it would potentially be much
more efficient and safer.
Step four includes implementing a plan that can change the course of risk they can
find themselves in. Meaning any course or method they choose to take in terms of a plan,
they should take said course and run with it.
4. Disputes
Small or big, good or bad, an organization of any size or any field will most likely
find itself within disputes at some period of the company lifetime. Whether said dispute
might be consumer, employee-employer, vehicle, torts, private relationships and
contractual relationships with other parties are types of disputes that could occur. An
employee may have an issue with their employer which in this case is The Salvation
Army in terms of reimbursement, which is a type of dispute that could occur if there is an
issue or some type of discrepancy between the employee and the clauses that he or she
should have been aware.
5. Negligence
Negligence entails not meeting the standard of a reasonable person. In the case of
The Salvation Army this could occur if the employer is negligent to reimburse the
employee for expenses that are valid on a business trip. At this point the employee could

potentially take Negligence Action, and be compensated for any potential losses they
have for valid business expenditures that should have been reimbursed in the first place.
6. Fraud
The Salvation Army itself could not be held accountable of fraud but the
employee could potentially commit fraud towards the company. In many of the clauses it
discloses that employees must fully disclose what and why they had or have the
expenditures they do. A potential case, could be in the scenario of mobile communication
in clause 16, which suggests that if the employee is to use the cellphone for business, for
something other then business, they are only entitled to 20 minutes per 24-hour basis. If
the employee were to use the business phone for more then the allowed time for personal
calls, but report to the organization that he in fact only used it for business, he is
committing an act of fraud towards the company.
7. Ethical Obligations
Ethics within business is always a very tough matter to argue. In terms of ethics
within an organization such as The Salvation Army, it is fair to say that ethics within the
business and their expenditures is a major factor, due to the fact their sole income of
money is from donations, and their intentions are to help the community members and
people in need with this money. If the organization is to spend this money for the benefits
of employees and/or employers whether on travel or not would be completely unethical.
That being said the organization not only has ethical obligations within the organization
but also to the community and its contributors.
8. Contract
A contract is defined as a spoken or written agreement that is intended to be
enforceable by law. It must be mentioned and considered that business polices are just
guidelines and rather not contractual agreements that can be enforceable by law. There
are cases where you may make claims against the organization or the organization makes

claims against you in court in regards to reimbursement issues. If it were to ever reach
such extremes, and either party had the appropriate basis to make claims of a lack of
reimbursement or lack of proof for an reimbursement, they could use it in the court of
law. That being said, it must always be considered that the clauses are just a form of
guidelines for employees to take the appropriate measures when traveling, to avoid
situations where it may become a conflict with management and employees.
9. Accountability
The Salvation Army has a responsibility to their stakeholders, such as donors and funding
agencies that provide the resources, and to those who depend on their programs and
services to use them appropriately, including ensuring that minimal resources are used on
things such as rent, and overhead, and as many resources as possible are consumed in
programs and services that serve the community.
10. Vicarious Liability
The employer is liable for the torts of an employee that is done while performing
their job. Assuming an employee carelessly spends or steals money, the employer is held
liable in the eyes of donor and stakeholders in the organization. Employers have the
ability to control the work of employees and therefore should be responsible and liable
for employee conduct.
11. Termination of the Employment Relationship
Termination of employment can occur for several factors whether that be for
misconduct, incompetence, or even disobedience, the list of possibilities varies. Although
the policies are not a contract, they are guidelines that must be followed by all
employees. In the case where these polices, whether it be for travelling purposes or any
other polices in the organizations, a scenario where an employee is incompetent to their
travel expenditures or on how they handle company funds, may be a matter for
termination of employment.

12. Donations
Donations are a unilateral contract where it is a promise to provide a gift, but you
are not held responsible for doing so. If a donor were to say that they are going to fund all
company expenses, which in theory includes travel expenses, then later backs out, they
have no obligation to be held liable for those expenses. Since The Salvation Army is a
company whom runs solely off donations and contributions, this could be a potential
occurrence that could affect the company greatly, and it is a perfect example of issues that
a company whom survive off donations faces.
13. Transparency
Employees should be entitled to transparency in the sense that they are entitled to
know clearly the guidelines to the travel policies. There are several clauses that include
the statement Costs are reimbursable based on the presentation of valid receipts for
reasonable expenditures, and this is a very vague statement due to the fact that there
might be discrepancies in between what management may consider reasonable and what
an employee might think is reasonable.

14. Liability of the Agent to the Principal

If an employee were to use the company credit card and decide to use it for his
own personal needs, and use it to buy a car per say, the principal or management in this
scenario can take legal action against said agent due to him exceeding his authority, and
may request the funds inappropriately spent back from the employee.
15. Lawsuit
Under the scenario where either party, whether it be the employee or employer
were to sue the other for a lack of reimbursement, or even excessive spending of
unauthorized company funds, both parties could find themselves taking legal actions.

Under said circumstances, these both could deal with a lawsuit through a negotiation
process, arbitration, or even litigation where they may come to an agreement to settle the
monetary compensation matter.
16. Recovery of Pecuniary Damages
This is defined as situations where those have suffered a breach of contract can
recover all their pecuniary losses. For example, if an employee spent a substantial amount
of money on a business trip and was told that he would be reimbursed on his return, later
to find out that he will not be because they might not find it within reasonable range, or it
was too much, the employee could seek recovery of Pecuniary Damage.

Corrective Measures
The Salvation Army will reimburse the cost of a visa or other specific documentation that is
required to enter another country specifically for Salvation Army business.
This is a case where the company should not find itself responsible for paying for the visa or
renewal of an employees passport. Although, an employee might be needed for a business trip,
with most of his expenses covered, it does not seem logical nor justifiable that the organization
should have to pay for an essential personal item every individual should have within society.
Matters such as airline tickets, food, hospitality, toiletry, those are examples of things that should
be covered within a business trip, cause their expenses that an individual would not have
incurred otherwise if not travelling, but even if an individual does not travel, having a passport

should be mandatory as a main form of identification other then someones license or citizenship.
Using Salvation Army funds for something that is going to benefit the employee and something
that is personal to the employee should not be covered by said funds.
A potential solution to this matter could be that the organization voluntarily provides 50
percent of the expense for the renewal of a visa and/or passport, which comes to a middle point
where both parties have to invest in one another. This can be taken as a token from the
companies part, and it also shows that the employee is not taking advantage of an organizations
whose funds should be used to help the community.

The Salvation Army does not cover the costs of luggage, except for reasonable costs incurred
to purchase a carrying bag or briefcase for a Salvation Army owned laptop computer. Where
individuals are required to travel with supplies of paper, handouts, etc. for meetings or
presentations, a separate carrying bag or briefcase may be reimbursed for this purpose.
Very similar to the matter of the passport renewal, this is a situation where the company should
not reimburse the employee nor fund this whatsoever with any company funds. If the company is
to invest any money in luggage, it should become company property if purchased with company
funds. It does not seem reasonable that Salvation Army funds are used to pay for the luggage that
will later be used for the benefit of the employee and not the company.

All money that is invested by the organization from any Salvation Army funds should only be
used for the benefit of the organization as a whole, and for the members of its community.
Considering the fact that the Salvation Army is a non profit organization, they are not in any
position to be investing money in things that arent solely for the benefit of the organization as a
whole or its community members.
Costs are reimbursable based on the presentation of valid receipts for reasonable expenditures
As mentioned in the principle of transparency this statement is very vague, and should be
cleared up and given exact dollar figures to avoid any issues in terms of reimbursement, one
must consider that what management may consider as reasonable. As mentioned in class by the
professor, the perfect example is his board of directors where on his committee he allowed an
exact maximum number of expenditure for things such as clothing. In this situation, the company
has a specific allocation for expenditures outside of those used for their work within the
community.
Scenarios
LeBron James is a veteran within the organization of The Salvation Army, he has been with the
organization for roughly twenty three years. He is currently running a new program that focuses
on getting the latest computers and tablets donated from the retail sector, that can be later used to
help low income community centers, employment centers, and potentially libraries, allowing
anyone of any income the access to some of the latest technology to use to their benefit and
allow them to learn to use the latest technology. The program has been a massive success
nationwide so far and LeBron has received much recognition for his contribution to the
organization and the communities of Canada.

Recently LeBron was told about a potential opportunity in Vancouver that was willing to
donate over half a million dollars worth of laptops and tablets towards the schools within
Canada. The potential opportunity buzzed quickly around the company and everyone knew what
a big deal this was. LeBron felt so pleased and so honored that his program had done so much
good. Its also a huge pleasure since LeBron is going to retire at the end of the year in the efforts
to pursue other career aspirations.
Now that LeBron would have to travel to Vancouver on business purposes, considering the fact
that he didnt have much time left with the organization, he decided why not travel within luxury
and go in first class, and knew the company was paying since he had a corporate credit card.
After arriving in Vancouver and attending the meeting where he was given half a million-dollar
voucher for all the computer and tablets, he thought it was time to celebrate.
He invited a large group of the individuals that had donated to the company to go out and
celebrate such a donation, a donation that will change and help so many students in these schools
that otherwise would not have had access to such technologies. LeBron decided to take the group
of businessman to a fancy dinner and drinks later and sent them all home in a limo that they had
been using the entire night. LeBron considered the fact that since this was potentially his first
and last trip with the organization he thought he should enjoy it, and considering the organization
was paying due to it being business he truly had no concerns.
After arriving in Toronto after a successful trip to Vancouver for such a large donation, LeBron
was called in for a small meeting with the executive team and his department leaders. LeBron
was called in for the excessive amount of money that he had spent on the trip, and was told that
he would have to be held accountable for the expenses for this trip due to the unreasonable and

non-legitimate expenses of this trip. LeBron argued that he would not be held accountable for
such expenses, that all he did was in the benefit of the company and that if he was to be held
accountable he would take legal action against the company.
The problem in this situation is that LeBron was not aware of what exactly the organization
covered in terms of travel, and what is reimbursable and what is not. For starters, the sole fact
that he used first class travelling when he could have used economy class conflicts with clause
17, which suggests if travel can be avoided it should, and in the scenario where it cannot be, the
most viable and cheapest method should be used, hence why the organization has no obligation
to pay for a first class flight. As well, in regards to the entertainment and drinks, conflict with
clauses 13 (Meals and Drinks) and 6 (Entertainment), which suggest that at no point are
alcoholic beverages to be covered by the organization, and any entertainment will not be
reimbursable by the company regardless if it was in the benefit of the organization. Its due to
these clauses that the company can protect itself from any obligation to have to cover said costs,
no matter whether or not LeBron was informed or not of these clauses, he is held liable.
Now with the organization threating to take legal action if LeBron doesnt pay he can be taken
to small claims court. The total of the bill accounted for $13.500 which is considered less then
the maximum $25,000 that can be claimed in small courts. All the rules and clauses are there, its
ones responsibility to ensure that they are aware of what they can be held liable for, and what
the company will or will not reimburse.
The steps that follow are yet to be seen, how would a company hope to solve this internally,
and potentially not prolong such a small matter? It would not look good to the media if this
turned into a bigger matter then it should be, considering the fact that LeBrons actions only took

place as a reward to himself for all his hard work, and considering he did just obtain a massive
deal for the organization to help those in need, he thought celebrating was appropriate. A process
of Negotiation could take place now, where both parties come together and decide on an outcome
where LeBron potentially pays some of the expenses, due to the mere fact that he did break the
rules, and the guidelines are strict and clear as to what they expect. It also should be an indicator
to the organization that having a company credit card given to employees, is to much authority
and power handed over, puts the organization in a position of risk of employees overspending
company funds.

What I learned
The Salvation Army based off their travel expenses reimbursement clauses, it is evident
that they are an organization who limits their expenses to the bare minimum. When working for
an organization such as this one, values of little to no spending in the best interest of the
organization need to be on par. This is an organization who is all about helping, meaning every
extra dollar they use on any company expenses, salaries, overheard, travel expenses, is one less
dollar that is being used in the benefit of the organization. We can use the situation of Mike

Duffy as mentioned in class, an individual whom used tons of hard working Canadian tax dollars
for his personal expenses, expenses that were not necessary nor justifiable for him to do his job
any better for the Canadian people.
After carefully reviewing the clauses, it is clear the organization protects itself very
thoroughly from any potential misspending that may be incurred by its employees on business
travels on behalf of the organization. They effectively use the policy to go into specifics of what
they will and will not cover in business trips.
As well, it is also something to consider that as a future employee in the professional
workforce, after seeing a policy such as this, I am made aware that these types of policies are not
always told to the employee, but rather the employee must inform themselves. Previous, to the
writing of this piece, it was my assumption that all policies were equivalent to a contract, and
these policies are not necessarily a contract, but rather guidelines that employees must follow.
Although, these policies and clauses are not a contract necessarily, legal action may be taken
with the correct reasoning, proof and evidence if either the employer or employee were to go
against the policies.
Recommendations
In terms of recommendations for both the employer and the employee there a few factors that
should be consider by both:

The corporate credit card should be removed completely from the use of employees and
rather apply the policy of reimbursement to employees, where they are responsible for

their expenses upfront and later covered by the organization.

Make the travel reimbursement policy into a contract that must be signed and followed by

all employees whom travel on behalf of the organization. I strongly believe this is a
method that may protect both the employee and the employers, in which they both
guarantee to follows the guidelines and agree to the terms, meaning both parties are

protected in terms of being reimbursed (employee) or reimbursing (employer).

Employers should give exact dollar figures as to what is the maximum that could be
covered by the organization in all expenses, as there might be a huge discrepancy and
vagueness in many of the clauses when it said reasonable or justified expenses when
it comes to things such as laundry, telephone costs, car expenses, etc. Although, it could
be said that employees might try and exploit this, and try to use that maximum dollar
figure, you could only hope that employees are working with the intentions of the best

outcome for the company, meaning spending the least possible dollar figure.
Personal items should always be covered by the employee and the company should have
no involvement in such matters. Personal items should include any form of identification,

whether that be a passport, luggage, carrying bags, clothing, etc.

Employees should be aware of all guidelines previous to travel, and should always
communicate with the employer and ask for exact dollar figures to assure their
reimbursement at their return, and to assure there is no conflict whatsoever.

Personal Ethics Statement Individual Assignment:

By signing this Statement, I am attesting to the fact that I have reviewed the entirety of my
attached work and that I have applied all the appropriate rules of quotation and referencing in use
at the Telfer School of Management at the University of Ottawa, as well as adhered to the fraud
policies outlined in the Academic Regulations in the Universitys Undergraduate Studies
Calendar. I future attest that I have knowledge of and have respected the Beware of Plagiarism
brochure found on the Telfer School of Managements doc-depot site.
Signature
Last Name (print), First Name (print): Narvaez, Alexander

Date: December 3, 2015 Student Number: 7253134