"Breakdowns in internal controls and a weak control environment resulted in at least $146 million in improper first- and business-class travel" by government agencies over a 12-month period that ended June 2006, according to a U.S. Government Accountability Office study released last month.
"While business class travel accounted for 96 percent of all premium class travel, many agencies informed us that they did not track, and thus did not know the extent of business class travel. Office of Management and Budget and General Services Administration also did not require reporting of business class travel," the audit concluded.
"We further found that no central oversight existed over agencies' implementing guidance, and thus it was not surprising that inconsistent policies and procedures existed for premium class travel across the federal government," according to GAO.
To close such loopholes, GAO urged two offices with oversight of government travel procurement to require agency reporting on all premium travel, including business class, and to clarify several existing rules on travel. Specifically, GAO recommended that GSA require agencies to define when mission-critical issues would warrant premium class travel and "what constitutes a rest period upon arrival." GAO also recommended that GSA establish an office for travel management to review agency policies and procedures, and identify areas where policies could be improved or are out of compliance with the Federal Travel Regulations or travel policy. GAO recommended that OMB remind travelers of policies, create reporting requirements and perform audits.
GSA said it lacked the authority to oversee the internal policies of various agencies, but created a Center for Policy Evaluation and Compliance that is currently evaluating seven policy areas, including travel. According to a presentation posted on the GSA Web site, the office will establish a government-wide baseline of all agency policies by the fourth quarter of fiscal year 2008. Agencies are asked in a survey whether their policies address various areas. From each response, GSA will evaluate policies as strong or weak and allow agencies to respond before GSA provides a final evaluation. Neither GSA nor GAO spokespersons could provide additional details at press time. GSA said it intends to update the Federal Travel Regulations, as GAO suggested, and has advised agencies that as of the 2008 fiscal year, it will require reports on all business class travel (in addition to the first-class travel reports currently required).
The federal government's overall travel policy, the FTR, applies to "most federal civilian employees and others authorized to travel at government expense." Military agencies have their own travel policies. In addition, each agency has its own policies and procedures that typically extend beyond the FTR. All government agencies are supposed to be using one of the approved end-to-end travel solutions, one of three ETS options for civilian agencies or the military's Defense Travel System.
"The travel manager, travel management companies and the software providers should have the capabilities built in to monitor and enforce that these things don't happen," travel consultant Robert Langsfeld of The Corporate Solutions Group said of the GAO findings. "It seems like these checks and balances have not been in place in the past. These people found the loopholes."
Langsfeld noted that the biggest loophole appears to be that when the travel policy was originally written more than a decade ago, business class didn't exist. The policy has been updated, but still lists only first class as a premium class of service.
"OMB's general policy related to travel is that the taxpayers should pay no more than necessary to transport government officials," the GAO study indicated. "Consistent with this principle, the FTR states that with limited exceptions, travelers must use coach class accommodations for both domestic and international travel. Premium class travel can occur only when the travelers' agency specifically authorizes (authorization) the use of such accommodations and only under specific circumstances (justification)." Exceptions are allowed for reasons such as security, health, disability or mission critical. Travelers are allowed to upgrade to premium class tickets using frequent traveler benefits, or at their own expense. Premium class is allowed only on international flights in excess of 14 hours in which rest stops are not possible en route or work commences immediately upon arrival.
The study found that 67 percent of the premium class trips were "improperly authorized, justified or both." Among the problems that the GAO found were blanket travel authorizations, in violation of the FTR; approval of premium class travel by subordinates; or no travel authorization. In cases where travelers cited the 14-hour rule as authorization for premium-class use, GAO found in four instances that the actual flight time was less, while in 29 cases, rest stops invalidated use of the rule. GAO said it forwarded findings of abuse to respective agencies and inspectors general.
In its analysis of 6.1 million airline ticket transactions valued at almost $3.4 billion charged to government credit cards issued by four banks, GAO found that less that 1 percent of all tickets--53,100 tickets worth $233 million--were purchased in premium classes. However, State Department employees purchased 29,700 premium-class tickets at a cost of $142 million. More than 60 percent of State's air expenditures and 25 percent of all tickets were at premium fares, the GAO said. At government-owned Millennium Challenge Corp., 77 percent of air travel expenditures were for premium class tickets. The corporation purchased 600 premium class tickets at a cost of $3.8 million during the year studied. Other big spenders on premium class tickets included the departments of Defense at $23 million, Homeland Security at $10 million, Treasury at $6.9 million, Commerce at $5.2 million, Agriculture at $3.1 million and the U.S. Agency for International Development at $3.2 million.
Detailing some of the costly travel, the report noted that one senior Agriculture department executive spent $62,000 for 10 premium-class trips from Washington, D.C. to Geneva, Paris and other destinations in Western Europe when coach would have cost just $9,000. "In violation of USDA's policies and procedures, these trips were authorized by the executive's subordinate--tantamount to self-authorization." Not only were the trips improper, but "abusive," due to the cost variance, the study stated. The New York Timesidentified the traveler as A. Ellen Terpstra, deputy undersecretary for farm and foreign agricultural services.
At DOD, an executive who flew 15 times claimed a medical condition, but the audit found that the condition was documented by a DOD employee, not a doctor as regulations required.
GAO noted that "senior executives (senior level executives and presidential appointees with Senate confirmation) accounted for 15 percent of premium-class travel while constituting about one-half of 1 percent of the federal workforce." GAO reported its findings to inspectors general.
The study was requested by two Senate committees as a follow-up to studies conducted in 2003 and 2006 that revealed costly consequences of the lack of travel policy controls at the Departments of Defense and State. Hearings and additional legislation are expected, but were not scheduled as of press time.
Asked about the lack of travel policy controls during a CBS Newsinterview, Sen. Norm Coleman, R-Minn., said, "I can tell you that if it's not monitored, if there isn't sunlight, and if there isn't transparency, the potential for abuse explodes exponentially. We saw that in the Defense Department; we start to monitor it and it cuts down on the abuse. Right now, you don't have that. There isn't transparency and we need to change that, and we will."