The Fly America Act applies to all federally-funded grants or contracts, even if the money is coming through a third party. It requires (with some limited exceptions) that all travelers use only American carriers when flying overseas. Travel on foreign carriers cannot be charged to a federally-funded grant or contract, unless one of the exceptions apply and is documented by the traveler or travel agent. Exceptions are allowed when the foreign destination is not serviced by an American carrier, or when use of an American carrier would dramatically extend the travel time. Please coordinate with OSP if there are any questions.
Travel costs can be paid as described above - through one of AU's travel agencies. Or the traveler can arrange his/her own travel and be reimbursed upon provision of full receipts. Meals can be provided, or the traveler can provide receipts for reimbursement. It is best to avoid payments of flat per diems, because such payments to foreign nationals usually entail extensive tax paperwork and filing requirements that are best avoided. Even if they are within the official U.S. government per diem rate, they are treated as taxable income. Contact your dean's office for more details or see Payroll's Foreign National Information guide.
Even small honoraria to foreign nationals can require extensive documentation and tax filing. It is best to notify your Dean's office in advance, so that the paperwork can be prepared and waiting at the Payroll office for the foreign national's signature. Detailed information and procedures are available on AU Payroll's website.