Profiles InTravel Management: Travel Program Audit Finds Savings
Company: Booz Allen Hamilton
Headquarters: McLean, Va.
2003 U.S. Booked Air Volume: $42 million
More than three years after Booz Allen Hamilton's audit department first applied a fine-toothed comb to the company's travel practices, senior manager of global travel Doug Weeks' travel team has maintained a relationship with internal auditors to examine lost savings, determine policy improvements and assess the overall effectiveness of the travel program.
When Booz Allen Hamilton's internal audit department first broached the subject of auditing the company's travel management program, Weeks—as would many travel managers in his position—felt the dread that only auditors can evoke. "The first time they said, 'Doug, you've got to go before the audit and finance committee at the board meeting,' I definitely panicked," he said. "I thought I better have my 'i's dotted and 't's crossed."
However, since forming a strong relationship with the Booz Allen Hamilton audit department, the company has examined the minutiae of unused or duplicate tickets, personal use of corporate cards, use of nonpreferred suppliers, application of negotiated rates, and unnecessary car rental insurance purchases, among others. Often, it is Weeks who approaches the audit department.
"What they found is that we're running a pretty tight organization," Weeks said. "Although there are always areas for improvement, there weren't any glaring holes. Now, we've taken the approach of proactively meeting with internal audit and deciding what we want to look at every year.
"Maybe it's going to be our ground transportation this year, where they want to look at average cost per ride from Manhattan to LaGuardia, and why is there a variance of $30 to $130. They may very well pull each and every reservation and start digging into it. That gives us the data so we can go back to BostonCoach, or to any other sedan vendor, to say that there is a great discrepancy in what we're being charged, because, quite honestly, travelers don't look too hard at it."
Through frequent audits of travel suppliers, Booz Allen Hamilton's travel department has been able to determine when vendors have not applied negotiated rates. Weeks said though this does not always lead to a full refund, it has given the company more leverage when it comes time for contracting. "Success rates for recovering lost money on the back end are hit or miss, but some of the suppliers have been wiling to work with us. If we find a discrepancy of $500 on any one fare, they may not be willing to pay for the full fare, but they've been able to split the difference."
Working with internal audit also has proven to be an effective compass for policy improvements, helping the travel department identify new policies and determine which ones need to be more strongly communicated. "It definitely impacts the communication strategy to employees and the updates that we give then," Weeks said.
For example, following an audit of the company's car rental program, Weeks noticed many travelers purchased additional auto insurance that was unnecessary and costly. The audit also demonstrated that some travelers held car rental accounts from previous employers, and had not yet updated their information to reflect Booz Allen Hamilton's rates or policies.
"We had employees who signed up for a preferred program prior to working at Booz Allen Hamilton," Weeks said. "Sometimes an employee goes to book Avis Rent A Car directly, puts in a Wizard number and gets another company's rate, which may not be as good as Booz Allen's, and may not have insurance coverage. That influences how we communicate policy to our travelers. We will ask them to update their Avis accounts to make sure they reflect our corporate discount number, so the correct rates and coverage are applied."
Just as an intensive audit program has given the travel department strong oversight of practices and policies, it also has given travel more visibility to Booz Allen Hamilton senior management, showing the program's value, Weeks said. "It demonstrates the effectiveness of a tightly managed program to senior management."