RELOCATION EXPENSES OR BONUS INCENTIVE TO RELOCATE
RELOCATION EXPENSES OR BONUS INCENTIVE TO RELOCATE
(Editor’s Note. Continuing our practice of providing “real world” case studies from our consulting practice, we are offering the following memo we prepared for a client whose payment of an incentive bonus for relocating an employee was being audited by DCAA as reimbursement for relocation costs rather than focusing on the bonus as a one-time allowable bonus payment. We decided to present an edited version of the memo here because it provides some interesting insights into allowable relocation incentive bonus payments as well as certain relocation costs.)
Dear DCAA:
In your earlier memo, you indicated you have been requested to audit Contractor’s (the client, employee names and dollar amounts have been disguised) “claimed relocation costs of $110,000” and requested supporting documents for that amount. Before going much further, you should realize that the amount you are calling “relocation costs” is really a combination of incentive pay for encouraging Donald to move himself and his family to Washington DC as well as reimbursement for anticipated relocation costs. In our opinion, the amount given to Donald was very conservative and is significantly lower than the amount both industry and government offer to their employees as incentive relocation pay as well as what is allowable as relocation costs according to the FAR cost principles.
{TAG_FORM_TITLE}
To discuss your needs, contact Bill Lennett, Principal, at 1-925-362-0712 or email him at
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
.
