Health Systems in Action: an eHandbook for Leaders and Managers

6. MANAGiNG fiNANCeS AND ReLAteD SYSteMS 6:78
APPenDIX H. Guidelines for Setting Per Diem Rates
Staff and clients, such as training participants, often incur costs for meals and accommodations
while traveling or away from home on official business. To achieve consistency,
minimize the burdens on the traveler to track and report costs, and maintain ease of
accounting, many organizations opt to set a rate for meals and lodging.
Commonly, the traveler receives a flat allowance to cover meals and does not have to
present receipts for the actual meals purchased. Lodging is often reimbursed on an actual
basis, pending submission of a receipt from the hotel. To contain costs and prevent abuse,
a maximum rate is generally established.
The rates are generally based on actual costs likely to be incurred in a given area. Depending
on the size and diversity of the travel area, multiple rates may be established, generally
by the city, region, or country where the travel occurs.
Below are some additional requirements and guidelines for establishing local per diem rates.
steps to take before setting local rates
■■ Consult with the donor about any required local rates in effect.
■■ The Ministry of Health or local tax authority might have local per diem rates
that can serve as guidelines.
– Be careful of schemes that would be deemed salary enhancements
rather than appropriate to cover actual costs of business travel.
■■ Survey similar organizations or collaborators regarding the rates they use
and set a similar rate.
■■ Set independent rates, based on surveys of actual costs in areas where business
travel occurs. Travelers or country office managers should survey the
costs to obtain acceptable meals in a given area. Meals should be provided
by restaurants or hotels that meet standards for cleanliness and any religious
or dietary needs and preferences of local staff. The meals should not be lavish.
In addition to a rate to cover meals, an additional 20 percent should be
added to the rate to cover the incidental expenses of travelers.
setting per diem rates for workshop participants
To eliminate many administrative burdens and risks related to payments of per diem rates
to workshop/training participants, many organizations opt to provide full board (and lodging
if appropriate) for workshop participants. Although not all participants may appreciate
eliminating cash payments, this approach provides several benefits to the project:
■■ Costs can be controlled through package rates negotiated with hotels.
■■ There is no need to carry large sums of cash, collect receipts, and process the
paperwork required to document per diem payments.
■■ Participants do not have to leave the venue in search of meals or to cash per
diem checks.
■■ Communal dining provides networking and learning opportunities.
www.msh.org/resource-center/health-systems-in-action.cfm HeAltH SySteMS In ACtIon