When processing employee moves, many agencies frequently make relocation mistakes.
Falling into one of these errors can make the relocation process more complicated and time consuming than it needs to be, but fortunately, there are ways to avoid them. Knowledge is the most powerful tool in getting everything right the first time, so read on to learn more.
Common Government Relocation Accounting Mistakes
Some of the most common relocation mistakes with regards to accounting are explained below.
- Do not realize 3rd party payments must be treated as taxable income to the transferee.
- Do not report their relocation expenditures accurately to OMB.
- Pay their transferees late, which impacts transferee satisfaction, productivity, and ability to use government charge card for expenses. These late payments are usually the result of a manual, confusing process for relocation expense reimbursement.
- Do not track vendor data so they can fully comply with the Data Act [please find link].
- Allow their relocation vendors to store data in systems that have not passed government security audits.
Accounting for 3rd Party Payments
When processing relocation costs, it is important to treat 3rd party payments as taxable income to the transferee. Your company must be in compliance with all government rules for government agencies and contractors. This includes the Federal Travel Regulations (FTR), Joint Travel Regulations (JTR), Federal Acquisition Regulations (FAR), and other relocation regulations, including IRS tax regulations.
Don’t let hurdles in the accounting process get in the way of making payments on time. Even though the process is often confusing and tedious, it is important that agencies pay their transferees promptly. This increases employee satisfaction and efficiency during and after the move. Punctual payment of transferees also allows them to charge expenses to a government charge card.
Reporting Expenditures to OMB
Federal agencies must report their relocation expenditures accurately to the Office of Management and Budget. Be sure that all expenses and costs are properly documented and filed with the federal government in order to meet legal requirements.
Tracking Vendor Data
Tracking vendor data is required by law. In order to fully comply with the Data Act, Federal agencies need a secure system that comprehensively quantifies relocation spending by vendor. This data is instrumental for the government in vendor negotiation.
Government agencies need complete control of relocation data for analysis, business process improvement, and transparency of spend. To accommodate this, data needs to be stored in secure systems that have passed government security audits. Using only approved systems ensures policy compliance and helps to chronicle existing relocation practices so business process improvement may occur.
Welcome to Government Relocation Accounting
Do these problems seem confusing or difficult to resolve?
mLINQS can help your company avoid making accounting and relocation mistakes with our innovative technology. mLINQS is the first and only fully compliant, Web-based government relocation expense management system. We use a cloud-based permanent change of station (PCS) solution which fully automates the expense management and policy compliance processes.
Now, relocation cost management does not have to be expensive or complicated, and your team can focus on the work you do best.