California Department of Transportation
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Gilbert Petrissans, Division Chief

Third Party Vendors

Reference: Personnel Management Letter (PML) 2005-21


To meet the requirements of an "accountable plan," the Internal Revenue Service and the State Controller's Office have established strict requirements for reimbursement of employee travel paid to third party vendors. Third party vendors are defined as individuals or organizations other than the principals involved in business transactions. Payments are made to third parties, not directly to the individuals or businesses providing the goods or services. Third party vendors include, but are not limited to, Internet companies such as,,,, etc.

The California Department of Human Resources (CalHR) has strongly advised that State travelers use a Department of General Services approved travel agency to make travel arrangements.. Employees who use a third party vendor must meet specific receipt requirements addressed in this section to receive reimbursement of their travel expenses.

Reimbursement of Third Party Lodging

To comply with the receipt requirements and receive reimbursement for appropriate lodging expenses, a traveler using a third party vendor must provide:

  1. A receipt from the third party vendor indicating the employee's name, hotel establishment providing the service, the check-in date, checkout date, itemized expenses incurred, and

  2. A receipt from the hotel that provided the service indicating the employee's name, check-in, checkout dates.

The hotel receipt does not need to itemize the hotel rate or taxes to third party vendor.

There are no exceptions to the requirements listed above. A TEC for reimbursement of third party lodging without both of the required receipts will result in the rejection of the claimed expense.

Reimbursement of Third Party Transportation

Reimbursement is allowed for airfare, commercial car rental, and other transportation charges paid to third party vendors as long as the cost does not exceed the actual and necessary costs as determined by the department, not the employee. A justification is required on the TEC explaining why the departmentís travel reservation system (via CalTravelStore) was not used.


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