GAO Travel Cards: Opportunities Exist to Further Strengthen Controls
OIG-11-1, Dec 7, 2010
This is a publication by GAO's Inspector General that concerns internal GAO operations. GAO had 2,884 travel card accounts, primarily issued to employees as individually billed accounts, and about $10.4 million in related travel card charges as of September 30, 2010. While the charges for centrally billed travel cards go directly to the government for payment, individually billed travel cardholders are directly responsible for all charges incurred on their travel card account and for remitting payments on the monthly bill. The cardholders are expected to use the government travel card only for valid expenses related to official travel. The intent of the travel card program is to improve convenience for the traveler and to reduce the government's costs of administering travel. Audits of agency travel card programs by GAO and others have found varying degrees of waste, fraud, and abuse at a number of agencies because the agencies have failed to implement adequate safeguards against card misuse. In response to these findings, Congress has held hearings and introduced legislation in the current Congress that would enhance travel card management and oversight. In addition, the Office of Management and Budget (OMB) has issued guidance, OMB Circular No. A-123, Appendix B, for executive branch agencies that establish standard minimum requirements (including internal controls that are designed to minimize the risk of travel card misuse) and suggested best practices for government card programs. As a legislative branch agency, GAO is not required to follow any OMB circulars, including OMB Circular No. A-123 or its appendixes. However, as a matter of policy, GAO has indicated that it generally would assess and report on the effectiveness of GAO's internal controls in accordance with the principles of OMB Circular No. A-123.
GAO's policy and procedures were generally effective in preventing and detecting travel charge card misuse. For example, GAO monitors monthly travel card activity reports to identify potential misuse and contacts employees regarding questionable charges. However, based on our analysis of travel card data, we identified areas where GAO's travel card program could be strengthened by adopting selected best practices identified in related Office of Management and Budget (OMB) guidance. For example, we determined that GAO could lower the spending limits (maximum charge amounts) for many cards and reduce the number of cards in use. After we provided GAO officials with our analysis, the agency lowered the monthly spending limit for individual travel charge cards from $12,500 to $7,500 and plans to assess the need for further reductions. In addition, our analysis identified a number of cards that were not being used. In response, GAO in August 2010 eliminated 12 of its 18 centrally billed cards. In testing the effectiveness of GAO's monitoring of travel card delinquency, we found that the agency could improve its procedures to reduce delinquency. Our analysis of travel card payment information for 17 months showed that 238 employees, or 10 percent of card users, were delinquent one or more times. After we briefed GAO officials on our analysis, the agency changed its procedures to begin monitoring late travel card payments earlier and, to assess its monitoring efforts, has agreed to use a delinquency rate performance metric. While the agency has had a process to take action when employees were delinquent in paying their travel cards, we found that GAO was missing a key component--procedures that set out the requirements and time frames for referring delinquent cardholders for potential disciplinary action. We also determined whether GAO was using OMB Circular No. A-123, Appendix B guidance and the controls it requires executive branch agencies to use in managing their travel card programs. We found that GAO has implemented some of the controls identified by OMB in its guidance, but is not using other controls, such as statistical and narrative information on travel card use to enhance program oversight and management of its travel card program. Further, GAO had not developed a management plan to help provide a road map for ensuring the ongoing effectiveness of its risk management controls. In addition, we found that OMB's travel card guidance was not used by GAO to manage or assess the effectiveness of its travel card program controls. This report contains recommendations.