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Audit No. 349
August 12, 2002
We found that the Office of Financial Management (OFM) effectively implemented the new Travel Manager software and that controls over travel authorizations and vouchers are generally adequate. In most respects, the travel management process was efficient and effective and in compliance with applicable guidance. Our sample of Commission travelers indicated that they have generally received good customer service.
Controls over the use of the government travel card need improvement. Our recommendations on travel cards include reducing spending and cash advance limits; using management reports to identify issues for follow-up; and issuing additional guidance to staff. Other recommendations include establishing task orders with Travel Management Centers (TMCs) for regions and districts without such agreements; requiring cardholders to initiate all account updates; improving procedures for processing disputed voucher claims; and providing employees with limited access to Travel Manager for entry of their voucher expenses.
OBJECTIVES AND SCOPE
Our objectives were to determine whether the Office of Financial Management (OFM) effectively implemented the new travel management software (Travel Manager) and established adequate controls over travel authorizations and vouchers. We also sought to determine if the travel management process complied with applicable guidance, was efficient and effective, and met traveler needs.
During the audit, we reviewed relevant documentation, identified and tested management controls, and interviewed Commission and contractor staff (representatives of the travel card issuer and Travel Manager vendor). We also sent a customer service questionnaire to 100 employees who traveled during fiscal year 2001.
The audit was performed in accordance with generally accepted government auditing standards between January and April 2002.
The General Services Administration (GSA) has overall responsibility for federal government travel. GSA has established per diem rates for government travelers; issued guidance and regulations on travel issues; and negotiated contracts with carriers (e.g., airlines) which set ticket prices and required carriers for various destinations.
GSA's Travel Expense Control System includes travel agents (known as Travel Management Centers or TMCs), employee charge cards, and agency accounts.
Travel Management Centers
GSA has awarded a master contract with numerous TMCs. Under the contract, agencies award a task order to a TMC for the travel services they need, which streamlines travel arrangements and saves money. GSA requires agency employees to use their agency's Travel Management Center for all common carrier, lodging, and car rental arrangements.
Employee Charge Cards
GSA requires all employees who travel to have a travel card. Under Public Law 105-264, employees must use the card to pay for most expenses (e.g., lodging, meals, and transportation) related to government travel (rather than using a personal charge card).
Use of the card (including charges and cash advances) is limited to expenses related to official travel. The travel card is convenient and reduces or eliminates out-of pocket outlays for the traveler. It also reduces administrative workload and enhances cash management for the government.
GSA has signed a contract with Citibank to act as the government's travel card provider. Citibank issues the travel card directly to the employee, after the employee completes an application form.
The form includes an acknowledgement that the employee is personally responsible for the payment of all charges when due, within thirty days. Citibank considers an account past due if the cardholder has not paid for the undisputed principal amount within 45 calendar days. It may cancel the account if the cardholder has not paid after 120 calendar days.
Agency Travel Account
Travel Management Centers make travel arrangements (airline and hotel reservations, normally) when employees provide a copy of the travel authorization. TMCs charge the ticket costs and their fee to an agency account, also maintained by Citibank. Agencies then reimburse Citibank for these charges.
COMMISSION TRAVEL PROCEDURES
The travel process begins with an authorization, and ends with payment of the employee claim on a voucher.
The travel authorization establishes that the employee is traveling on official government business at the direction of an agency. The authorization includes the purpose of the trip, the itinerary (dates and locations), and its estimated cost, broken into categories such as per diem, ticket price, and miscellaneous expenses (such as taxis and phone calls).
Administrative staff enter this information into Travel Manager (also known as the Travel Management System). This web based stand-alone system prepares and tracks travel authorizations and vouchers. It was implemented Commission wide in fiscal year 2000. The employee's supervisor approves the travel by signing a paper copy of the authorization.
Travel Voucher Processing
After completing the travel, the employee submits a listing of travel expenses and required receipts to administrative staff. The staff enter the expenses into Travel Manager, and print a copy of the voucher for review and signature by the employee and the employee's supervisor.
The supervisor forwards the voucher to the Office of Financial Management for final review, recording of the expenditures into the Commission's financial accounting system (Momentum), and payment. OFM has thirty days to pay the voucher after approval, as required by the Travel and Transportation Reform Act of 1998 P.L. 105-264. Payments are made now by direct deposit to an employee's account at a financial institution (US Treasury Department regulation, 31 CFR 208).
About 2200 Commission employees have travel cards that they use to pay for authorized expenses while in travel status, and to obtain cash advances (from a bank or ATM) for the same purpose. With a few exceptions, the cash advance limit on these cards is $500 daily, $1000 per week, and $5000 per billing cycle.
Each office and division has a travel coordinator to answer employee questions about travel and coordinate with the Office of Financial Management. Normally, the administrative contact serves as the travel coordinator.
We found that the Office of Financial Management (OFM) effectively implemented the travel management software (Travel Manager). Controls over the travel authorization and voucher process are generally adequate.
For the most part, travel management procedures were efficient and effective, and complied with applicable guidance. We also found that employees were generally satisfied with the customer service they received.
Controls over the use of the travel card need improvement. We are making several recommendations to improve these controls, and to further enhance travel management, as detailed below.
We received 62 responses to a questionnaire we sent to a sample of 100 Commission travelers during fiscal year 2001. The respondents generally expressed a good to very good level of satisfaction with the quality of travel guidance available, their travel coordinator's knowledge of travel issues, and most of OFM's services. Staff rated OFM's handling of disputed travel claims as fair to good (see page 8).
The detailed ratings were as follows (1 = very bad; 2 = fair; 3 = good; 4 = very good; 5 = excellent):
Agency travel guidance: 3.5
Travel coordinator's knowledge 3.6
Services provided by Travel Management Centers 3.4
Office of Financial Management services:
Unusual travel requests 3.2
Disputed claims 2.5
Staff interest in customer satisfaction 3.3
CREDIT LIMITS FOR EMPLOYEE TRAVEL CARDS
OFM adopted a standard limit for most employee travel cards of $10,000 (i.e., the total balance on each card may not exceed $10,000 at any time). In at least 70 cases, the credit limit was set at $99,999. The total authorized credit available for all Commission travelers is about $10 million (which exceeds the Commission's annual travel budget).
These limits appear excessive for most travelers, especially considering the current requirement for agencies to pay travel claims within 30 days (Public Law 105-264, dated October 19, 1998). Prompt payment of employee claims allows prompt payment by employees of the balance due on their cards, preventing high balances from developing.
Unnecessarily high credit limits increase the risk of abuse of the card.
In consultation with offices and divisions, OFM should reduce credit limits on employee travel cards to an appropriate level, considering employees' frequency of travel and monthly travel claims.
CREDIT LIMITS FOR AGENCY TRAVEL ACCOUNTS
GSA requires agencies to maintain appropriate spending limits on their travel accounts with Travel Management Centers. OFM has established a credit limit of $9.9 million for each of the 25 TMC accounts (total credit availability of $9.9 million times 25, or almost $250 million).
These limits appear excessive. The total agency travel budget is only $8.8 million, and projected total travel expenditures for fiscal year 2002 are about $6.6 million (based on the five months from October 2001 through February 2002).
OFM should reduce the TMCs' credit limits to an appropriate level, based on the TMCs' monthly billings.
CASH ADVANCE LIMITS
As indicated in the Background, cash advance limits for most employees have been set at $500 daily, $1000 per week, and $5000 per billing cycle (monthly). In three cases, the billing cycle limit was set at $49,999 instead of $5,000, and in two cases, the daily limit was set at $10,000, instead of $500.
These limits appear excessive in most cases, considering that employees normally charge lodging, rental car expenses (if applicable), and some meals on their travel card rather than using cash. Travelers need cash primarily for some meals, incidental expenses, and local transportation (such as taxis). Excessive cash advance limits increase the risk of travel card abuse.
In some cases, the limits may have been set too low, especially for employees who travel frequently. We identified forty-seven cases in which the monthly limit was only $500, rather than $5000. Nine of these cases were examiners who traveled frequently. One of these employees told us that the cash advance level was insufficient, as did two respondents to our customer service questionnaire.
In consultation with offices and divisions, OFM should reduce or increase cash advance limits for Commission travelers, as appropriate. It should issue guidance on the setting of appropriate cash advance limits, based on employee travel frequency and costs.
QUESTIONABLE CASH ADVANCES
Any use of the card for personal expenses is a violation of the written agreement the cardholder signed with Citibank and constitutes misuse of the card. Such misuse subjects the employee to possible disciplinary action, as suggested by GSA in the following table of penalties:
OFM has issued guidance indicating that it may suspend or cancel account privileges based on any abusive card use or payment history brought to its attention, including use of the card for non-travel (personal) expenses.
We reviewed travel documentation for December 2001 to identify cases in which employees obtained cash advances without corresponding travel charges (such as hotel charges and/or airline tickets), authorizations, and vouchers. We found nineteen cases in which employees obtained cash advances with the travel card without being in travel status. Six of these advances were over $1,000, four were between $500 and $800 and the remaining nine were between $42 and $300.
We provided the names of fifteen of the nineteen individuals to the Office of Financial Management and the Office of Administrative and Personnel Management (OAPM) for follow-up action. Our Office is performing additional review of travel card use of the other four employees.
In consultation with supervisors of the affected employees and OAPM, OFM should consider what follow-up action to take on the fifteen employees we identified, as discussed above. In addition, OFM should determine whether other employees also took cash advances from their travel card without being in a travel status. If any additional misuse is identified, OAPM and OFM should also refer them to the appropriate supervisor.
OFM should issue additional guidance to the staff stating that misuse of the travel card for personal expenses will not be tolerated, and may subject the employee to disciplinary action as described in GSA's Table of Penalties. The guidance should also clarify that the travel card is not to be used for local travel expenses.
USE OF PERSONAL CREDIT CARDS
Ten employees responding to our questionnaire stated that they used a personal credit card to pay for their travel expenses rather than their government travel card. Five of these employees stated that their travel card had been suspended. The other five employees indicated they preferred using their own credit card. The employees apparently were unaware of the requirement to use the government travel card while in official travel status (Public Law 105-264, dated October 19, 1998).
Use of the travel card is mandatory to save the government money. The travel cards contain identifiers to obtain negotiated government discounts for airfare and tax exemption. In addition, the credit card company pays a refund to GSA based on the total agency charges to the card. This amount offsets GSA administrative charges to agencies. If the amount of the offset is not sufficient to pay GSA charges, the Commission must pay GSA from its appropriation.
OFM should inform employees of the requirement to use only the government travel card while in official travel status. OFM should develop procedures covering employees who do not have a card (because they are new, or their card has been suspended).
MANAGEMENT REPORTS AND ANALYSIS
The management reports provided by Citibank for the travel card are voluminous and not easy to use. For example, one month's reports contained more than 4000 pages. The transaction listing for the billing cycle groups employees by organization, making it difficult to locate individual accounts. OFM indicated that Citibank has not provided a user guide for the reports or made them available electronically, even though the contract with GSA requires these features.
A Citibank representative told us that Citibank did not have user guides for the reports. The representative also said that OFM has not requested electronic reports. Without the user guides and the ability to sort the data, monitoring card activity is difficult. OFM has not made analysis of management reports a priority.
OFM should request electronic management reports and user guides from Citibank. If Citibank does not provide them, OFM should notify GSA.
OFM should make analysis of the reports a priority. The analysis should identify trends and possible problems (such as inappropriate cash advances) for follow-up.
NAME AND ADDRESS CHANGES
Currently, OFM requires an office's travel coordinator (administrative contact) to e-mail OFM with name and address changes to employee travel accounts. OFM then forwards the requests to Citibank without verifying them.
To avoid possible errors, requests for account changes should originate with employees.
OFM should require employees to initiate travel card account changes (such as names and addresses).
DISPUTED TRAVEL VOUCHER CLAIMS
Twelve employees responding to our questionnaire stated that OFM had disputed an item claimed on their travel voucher. Five of these respondents were not satisfied with OFM's procedures for resolving disputes. Their primary concern was the delay in processing claims, as OFM postponed payment of the entire voucher until the dispute was resolved.
OFM told us that it has implemented procedures to reduce the number of returned vouchers. It requires the employee's supervisor to conduct a detailed review of the voucher before submitting the voucher for payment. We are recommending further steps to expedite the processing of disputed claims.
OFM should publish a checklist of common voucher processing errors that delay or prevent voucher processing. It should monitor processing time for vouchers with disputed claims to ensure their timely resolution.
TMC TASK ORDERS
Effective January 1, 2001, GSA required all employees to use the Travel Management Center (TMC) selected by their agency for all common carrier, lodging and car rental arrangements. The TMC must be listed on the GSA master contract.
We found that three Commission locations (Chicago, San Francisco, and Salt Lake City) were under contract with TMCs from a prior GSA contract. One location (New York) contracted directly with a local TMC. 1
OFM told us that it had notified all district and regional offices of the GSA requirement and was available to assist field offices in preparing task orders. During the audit, the San Francisco and Salt Lake City district offices initiated action to obtain task orders under the current GSA contract.
In consultation with OFM, the New York, Chicago, San Francisco, and Salt Lake City field offices should establish task orders as soon as possible with travel management centers under the current GSA contract.
TRAVEL MANAGER ACCESS
As stated in the Background, OFM has not granted employees access to the Travel Manager system to prepare their vouchers. The travel coordinator (administrative contact) prepares the voucher, which delays the employee's reimbursement.
Employee access could be limited to preparing vouchers from an existing authorization, which would limit the potential for abuse. Also, supervisors and OFM would still have to review and approve the voucher.
OFM should consider allowing employees access to Travel Manager to prepare their travel vouchers. The employees should be provided training on Travel Manager.
GSA requires agencies to ensure that their employees are familiar with federal travel regulations and travel charge card policies. Twenty six percent (16 of 62 employees) responding to our questionnaire did not know where to find guidance on travel policy and procedures.
OFM issues travel guidance periodically, but does not issue guidance to new employees at their orientation. In addition, GSA offers on-line training on travel at its web site, and links to other relevant sites.
OFM should provide written guidance on travel policies and procedures to OAPM for inclusion in the new employee orientation package. It should also link the Commission's Intranet's travel section with the GSA training site for travel.
1 Previously, GSA allowed agencies to contract directly with local TMCs.