Department of Health and Human Services:

Controls over Travel Program Are Generally Effective, but Some Improvements Are Needed

GAO-03-334: Published: Feb 21, 2003. Publicly Released: Mar 5, 2003.

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By their nature, determining and paying allowable travel costs pose substantial risk, making effective internal control crucial. Because of this and weaknesses in internal control identified in the GAO review of travel card usage at the Department of Defense, GAO was requested to review the Department of Health and Human Services' (HHS) travel program. GAO assessed whether HHS's process for monitoring travel charge cards helps minimize delinquencies, write-offs, and unauthorized use. GAO also assessed whether controls over travel voucher processing help ensure proper reimbursements. GAO tested a statistical sample of travel card transactions at each of five HHS component agencies to determine if they were for authorized purposes. GAO also reviewed related travel vouchers to determine if reimbursement amounts were proper.

HHS's process for monitoring its travel card program, which includes reviewing bank reports to identify delinquent cardholders, effectively minimized delinquencies and write-offs. However, some unauthorized use of the travel card still occurred. HHS delinquency rates were lower than governmentwide rates for most of 2001 and declined further in 2002. Also, HHS's .29 percent write-off rate--the amount of unpaid travel card charges written off as a percentage of total travel charges--was slightly lower than the governmentwide rate of .44 percent. HHS has not always identified or prevented unauthorized travel card use because its monitoring of travel card use focuses mainly on delinquencies. GAO estimated that unauthorized travel card transactions for fiscal year 2001 ranged from about 7 percent at one HHS component agency to about 22 percent at another. Examples of unauthorized charges included personal charges for meals and automated teller machine withdrawals. While unauthorized use had minimal negative monetary effect because the majority of cardholders who made these charges paid their travel card bills timely, left unchecked, such use could lead to increased delinquencies and write-offs. GAO also found weaknesses in voucher processing, inadequate review of vouchers, and poor record retention, resulting in some employees being reimbursed for more than allowable expenses and for amounts not properly supported. The excess reimbursement ranged from about $2 on one voucher to about $250 on another. While these amounts alone are insignificant and relate to only a small percentage of travel reimbursements for fiscal year 2001, excess reimbursements reduce the amount of available travel funds. Further, vouchers that are not supported by related receipts make it difficult to determine if the reimbursement amounts are proper.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In May 2004, the Assistant Secretary for Administration and Budget issued to all HHS component agencies a memo containing guidance on handling misuse of government travel charge cards. The guidance included a list of responsibilities for supervisors and managers. These responsibilities include establishing a process to verify that employees are appropriately using travel charge cards for authorized official travel, and ensuring that a process is in place and followed for reviewing activity reports as a means of identifying abuse and misuse. This directive requires the component agencies to establish procedures that would help identify misuse, but it does not specifically require that they periodically test a sample of travel cards. In its quarterly travel charge card report (third quarter, fiscal year 2004) to OMB, HHS reported that each agency program coordinator (APC) receives a Travel Business Report from the bank contractor that identifies the cardholder, date of purchase, merchant, and purchase amount. HHS reported that this report is used extensively by APCs to monitor improper purchases not associated with official travel expenses. APCs also have access to the bank's CARE system, an online system of cardholder activity. HHS reported that APC oversight in using the bank reports and CARE system has proven to be effective in maintaining a very low delinquency rate and to effectively monitor the proper use of the card. HHS also reported that APCs had identified 238 incidents of misuse, resulting in counseling sessions, letters of reprimand, or notices of misuse being issued to the cardholders. GAO concludes that the actions described are sufficient for identifying unauthorized travel card charges, as evidenced by the low delinquency rate and the instances of misuse that were identified. Therefore, GAO considers the recommendation closed, even though the procedures do not include periodically testing a sample of travel card transactions.

    Recommendation: To reduce unauthorized and personal use of travel cards and help ensure that travelers are not receiving reimbursements in excess of proper travel expenses, the Secretary of Health and Human Services should require component agencies to include procedures in their monitoring efforts for periodically testing a sample of travel card transactions to identify unauthorized travel card charges and any adverse trends that would warrant further testing or additional controls.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HHS's travel systems administrator distributed to travel approving officials and travel arrangers a document containing responsibilities and procedures. Approving officials' responsibilities include reviewing the validity of vouchers by, among other things, ensuring that all miscellaneous charges are properly documented. The procedures require that vouchers with non-documented or erroneous charges will be returned to the traveler without payment. Although the document does not specifically refer to per diem amounts and amounts credited on hotel bills, the requirements to review the validity of vouchers and ensure that miscellaneous charges are properly documented covers these amounts.

    Recommendation: To reduce unauthorized and personal use of travel cards and help ensure that travelers are not receiving reimbursements in excess of proper travel expenses, the Secretary of Health and Human Services should require component agencies to issue an alert to voucher processing staff/reviewers reminding them to check vouchers for proper per diem amounts and amounts credited on hotel bills.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: HHS's travel systems administrator distributed to travel approving officials and travel arrangers a document containing responsibilities and procedures. Responsibilities include ensuring that all original receipts are proper and that all original travel records are filed promptly in a secure area so that records will be readily available.

    Recommendation: To reduce unauthorized and personal use of travel cards and help ensure that travelers are not receiving reimbursements in excess of proper travel expenses, the Secretary of Health and Human Services should require component agencies to issue an alert to voucher processing staff/reviewers reminding them to obtain and retain the necessary receipts needed to determine the correct amount of travel reimbursement.

    Agency Affected: Department of Health and Human Services

 

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