Management Letter:

Recommendations for Improvements to MCC's Internal Controls and Policies on Premium Class Air Travel

GAO-08-468R: Published: Feb 29, 2008. Publicly Released: Feb 29, 2008.

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On September 28, 2007, GAO issued a report detailing our findings of improper and abusive premium class travel governmentwide. The audit was performed at the request of the Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, U.S. Senate, and Senator Grassley, Committee on Finance, U.S. Senate. As part of the audit, we tested premium class transactions at the Millennium Challenge Corporation (MCC). While our report provided recommendations to the General Services Administration (GSA) and the Office of Management and Budget (OMB), the purpose of this letter is to report on specific matters identified during our audit that relate to weaknesses in internal controls at MCC. This letter contains three recommendations that warrant management's consideration.

MCC was the most frequent user of premium class travel governmentwide. Overall, MCC spent about 77 percent of its air travel on premium class travel, compared to the overall governmentwide average of about 7 percent. On a comparative basis, we found that 83 percent of MCC's over-14-hour flights between airports in the United States and selected locations in Africa, the Middle East, and parts of Europe were in premium class. In contrast, only 3 percent of the Department of Defense's (DOD) and the Department of Homeland Security's (DHS) travel to the same locations was in premium class. Our statistical sampling of and data-mining work on premium class travel at MCC found that none of the 36 MCC premium class transactions we tested were properly authorized or justified. Specifically, in premium class flights occurring prior to February 2006, MCC officials informed us that premium class authorization was provided through blanket authorizations. Flights during this period failed our control tests based on a lack of specific authorization. Further, of an additional 15 transactions occurring after February 2006 when premium class travel at MCC was supposed to be authorized on a trip-by-trip basis, we found that all 15 still failed our control tests due to lack of specific authorization and justification. According to MCC officials, specific authorization was not necessary for these trips because they were over 14 hours in length. However, the Federal Travel Regulation (FTR) still requires specific authorization for premium class use, even in situations where flight time exceeds 14 hours. We found that MCC employees improperly used the 14 hour rule to qualify for premium class travel. The FTR specified that employees qualify to use premium class travel for flights exceeding 14 hours if they had no rest stop en route or rest period at their destination. However, on 20 of the 36 flights we examined, travelers arrived at their destination on a weekend without providing documentation that they reported to work before incurring a rest period. This is in violation of the FTR. We found additional flights where the traveler arrived at a time during the day to allow for a rest period prior to reporting to work the next day.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: MCC's Temporary Duty Travel Policies and Procedures directive, dated February 2012, establishes the overall responsibility for MCC Approving Officials to ensure travel expense cost savings by requiring coach class flights, with travelers' use of rest stops or business class lounges enroute, instead of more costly business class flights when flights exceed 14 hours in duration. The directive increases the Federal Travel Regulation (FTR) flight time requirement (i.e., the 14-hour rule) that officials must consider in reviewing a request for premium class accommodations, and includes the FTR's requirements related to rest stops and traveler reporting-for-duty timeframe. Per the directive, any OCONUS flight where premium class accommodations are requested must have total travel time that meets or exceeds 20 hours, and the traveler cannot take a rest stop or use a business class lounge during the trip and will report for duty within 24 hours of arrival at the final destination. The directive requires written justification and approval for any premium class air travel; the justification must explicitly cite the specific FTR exception(s) that allow premium class accommodations. For example, when using the travel time exception, traveler must include three criteria in the justification: (1) travel time is 20 hours or more; (2) there will not be an overnight rest stop or fee-based use of a business class lounge en route to the final destination; and (3) the traveler will report for duty within 24 hours of arriving at the final destination. The written justification/approval must be included and retained in travel order documentation. These provisions in MCC's current TDY travel directive meet the intent of our recommendation.

    Recommendation: To reduce improper premium class travel, the Chief Executive Officer of the Millennium Challenge Corporation should implement improved internal controls over the use of premium class travel. While a wide range of activities can contribute to a system that provides reasonable assurance that premium class travel is properly authorized and justified, at a minimum the internal control activities should include the following: (1) require specific authorization for the use of premium class, to be documented and retained with travel orders; (2) enforce FTR regulations prohibiting premium class travel if the trip was over 14 hours and the traveler had a rest stop at destination or a rest stop en route; and (3) prohibit the use of premium class air travel on weekend arrivals, except in cases where a traveler documents that he or she will report immediately to work upon arrival before incurring a rest period.

    Agency Affected: Millennium Challenge Corporation

 

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