• Illinois Gov. Bruce Rauner has signed a bill requiring local public agencies to regulate reimbursements for travel, meals and lodging.
  • The new law bars reimbursements for entertainment and sets restrictions on amounts for qualified expenses.
  • All reimbursements must be documented and open to public review.

In the wake of numerous recent examples of extravagant spending by some Illinois local governments and agencies, the Illinois General Assembly sent Gov. Bruce Rauner a bill designed to increase the accountability of local public agencies when spending on meals, travel and entertainment.

The governor signed House Bill 4379 into law on July 22, 2016. The new law, called the "Local Government Travel Expense Control Act," will go into effect Jan. 1, 2017.

The Act applies to school districts, community colleges and all other non-home rule units of local government. The Act exempts all home rule units.

The Act requires public agencies to regulate the reimbursement of "travel, meal, and lodging expenses" of "employees and officers" of a local public agency. In this alert, we refer to travel, meal and lodging expenses collectively as "travel expenses."

Local Regulations Required

The Act requires each public agency to enact an ordinance or resolution regulating the reimbursement of travel expenses. The ordinance or resolution must be in place by June 30, 2017. If it is not in place by that date, then all reimbursements are prohibited until an ordinance or resolution is enacted.

A public agency's regulations must include the following:

  1. The types of official business for which travel expenses are allowed
  2. The maximum allowable reimbursement for travel expenses
  3. A standard form for requesting reimbursement of travel expenses, including submission of expense-related documents

The regulations may allow for reimbursement of travel expenses that exceed the established maximum allowable amount, but only if the expenses relate to an emergency or other extraordinary circumstance.

The Act does not establish a not-to-exceed maximum allowable reimbursement amount for travel expenses. Presumably, a public agency may create a schedule that sets various maximum allowable reimbursements for the various types of official business for which travel expenses are allowed. It seems appropriate, for example, that the maximum allowable reimbursement for attending a two-day conference in a distant location would be higher than the limit set for a local, one-day conference.

Minimum Documentation of Travel Expenses

To qualify for reimbursement, the employee or official must complete and submit the standard form and provide documentation of the expenses, including at least the following:

  1. If the travel expenses have not yet been incurred, an estimate of the travel expenses
  2. If the travel expenses already have been incurred, receipts showing the costs of the travel expenses
  3. The name of the individual requesting reimbursement
  4. The job title or office of the individual requesting reimbursement
  5. The date or dates on which the travel expenses will be or were expended
  6. The nature of the official business for which the travel expenses will be or were expended

The Act states that these documents are public records subject to disclosure under the Illinois Freedom of Information Act.

Approval of Travel Expenses

On or after March 2, 2017, the following travel expenses must be approved by roll-call vote during an open meeting of the governing board or corporate authorities of the public agency:

  1. The travel expenses of any officer or employee that exceed the maximum amount allowed under the regulation adopted by the relevant local public agency
  2. The travel expenses of any member of the governing board or corporate authority

Note for No. 1 above that the vote apparently is required even if the public agency's regulations provide reimbursement above the maximum allowable amount in any emergency. Note for No. 2 above that a vote is required for every reimbursement for a member of the governing board or corporate authority.

The Act does not require the roll-call vote on a reimbursement of travel expenses to be separate for approval of other payments. It may be permissible, therefore, to include travel expense reimbursements with other accounts payable, as is the practice of many public agencies.

Reimbursement of Entertainment Expenses Prohibited

The Act flatly prohibits public agencies from reimbursing expenses related to "entertainment," with a notable exception. Entertainment is defined as shows, amusements, theaters, circuses, sporting events, or any other place of public or private entertainment or amusement. The Act allows reimbursement, however, if the entertainment is "ancillary to the purpose of the program or event."