Management Letter:

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

GAO-08-85R: Published: Nov 19, 2007. Publicly Released: Nov 19, 2007.

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At the request of the Permanent Subcommittee on Investigations, Senate Committee on Homeland Security and Governmental Affairs, in September 2007 we reported on the governmentwide use of premium class travel. As part of the audit and related investigations, we tested premium class transactions at the Department of Agriculture (USDA). The purpose of this letter is to provide the Acting Secretary of Agriculture with information on specific matters identified during our work that relate to weaknesses in internal controls at USDA. Further, this letter details the results of investigative work we performed related to allegations forwarded to us by USDA's Office of Inspector General of premium class travel abuses by executives at the Foreign Agricultural Service (FAS). This letter contains six recommendations that warrant your attention.

We found that USDA spent over $110 million in air travel from July 1, 2005, through September 30, 2006, of which about $3.9 million included at least one leg of a premium class flight. Overall, the percentage of USDA flights in premium class was less than the overall governmentwide average of 7 percent. However, we found that FAS used premium class travel nearly 30 percent of the time and accounted for the majority of USDA's premium class travel, due in part to policies and procedures that were more permissive than USDA departmentwide policies. Other issues of significance included the following: USDA, and its component organizations, did not track premium class travel other than first class. Consequently, USDA and its component organizations were not aware of the magnitude of premium class travel by department or by component organization. Further, we found that FAS accounted for $2.0 million of the $3.9 million USDA spent on premium class travel. Of the 145 USDA premium class trips we examined, 140 trips did not have documentation to justify premium class travel. Without this documentation, FAS and USDA cannot confirm that employees are using premium class in accordance with the Federal Travel Regulation (FTR) or department and agency policies. Lacking such documentation, USDA has little assurance that these trips are in accordance with federal regulations and exposes the government to excess travel costs. FAS officials accounted for 112 of the 145 USDA trips we audited and investigated. These trips were taken mostly by senior executives, and included 79 FAS premium class trips that were authorized by USDA staff subordinate to the traveler or by an employee not permitted to authorize premium class travel. These transactions did not follow USDA's policy for proper authorization. Premium class transactions approved by subordinates, while not expressly prohibited by the FTR, reduce the scrutiny of premium class travel and amount to self-approval. We found 25 instances in which FAS executives used "exceptional circumstances" or the 14-hour rule to justify the need for premium class travel, at the same time that other FAS staff traveling on the same flights for the same purpose traveled in coach. For example, in December 2005, a FAS executive traveled in business class from Washington, D.C., to Hong Kong and back at a cost of nearly $7,000. In contrast, 11 other FAS employees did not travel in premium class, even though they were eligible for premium class travel according to General Services Administration policy if their supervisor approved the expenditure of additional funds. Instead, the 11 employees traveled on the same plane in coach at the cost of less than $1,400 per ticket. We found an additional 47 instances in which executives violated FAS policy by claiming "exceptional circumstances" to justify flights less than 14 hours to Western Europe. FAS policy specifically prohibits the use of this criterion for flights from the United States to Western Europe. Further, no explanation was given on the travel vouchers related to the exceptional circumstance criterion that warranted the additional cost for premium class travel. At the end of our discussion of these issues, we offer recommendations for strengthening USDA's internal controls and travel policies. We are also referring to the Acting Secretary of Agriculture three individuals who violated FAS's premium class policy, potentially abused executive travel, or both for further review and appropriate action, including, if warranted, repayment of the difference between the price of coach and premium class and administrative actions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In May 2008, USDA began receiving and reviewing monthly premium class travel reports for its eTravel service providers, (including data on both first and business class travel), to monitor premium class travel activity. These premium class travel reports include all executive travel, and review is conducted with an emphasis on travel by executive staff.

    Recommendation: To improve the Department of Agriculture's (USDA) ability to detect and prevent improper premium class travel, the Secretary of Agriculture should strengthen existing internal controls over the use of premium class travel by developing and implementing procedures to identify the extent of premium class travel, including business class travel, and to monitor for trends and frequency of premium class travel use, including potential misuse by executives.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: In October 2007, USDA implemented new guidance requiring that all requests for premium class travel be authorized by the CFO, and that premium class travel for the CFO be authorized by the Chief of Staff.

    Recommendation: To improve USDA's ability to detect and prevent improper premium class travel, the Secretary of Agriculture should strengthen existing internal controls over the use of premium class travel by reiterating to USDA components existing USDA policy that premium class travel can only be approved by general officers, unless specifically exempted.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: In October 2007, USDA implemented new guidance requiring that all requests for premium class travel be authorized by the CFO, and that premium class travel for the CFO be authorized by the Chief of Staff.

    Recommendation: To improve USDA's ability to detect and prevent improper premium class travel, the Secretary of Agriculture should strengthen existing internal controls over the use of premium class travel by developing and implementing policies and procedures to specifically prohibit travelers or their subordinates from approving travelers' requests for premium class travel.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: In October 2007, USDA implemented new guidance requiring that all requests for premium class travel be authorized by the CFO, and that premium class travel for the CFO be authorized by the Chief of Staff.

    Recommendation: To improve USDA's ability to detect and prevent improper premium class travel, the Secretary of Agriculture should strengthen existing internal controls over the use of premium class travel by requiring that premium class travel be approved by individuals who are at least of the same rank/grade as the travelers.

    Agency Affected: Department of Agriculture

  5. Status: Closed - Implemented

    Comments: In early FY 2008, USDA provided guidance to authorizing officials and travel management center staff requiring appropriate supporting documentation which must be provided to receive premium class travel approval.

    Recommendation: To improve USDA's ability to detect and prevent improper premium class travel, the Secretary of Agriculture should strengthen existing internal controls over the use of premium class travel by developing and implementing policies and procedures to specifically prohibit the approval of premium class travel if all documentation supporting premium class travel is not provided.

    Agency Affected: Department of Agriculture

  6. Status: Closed - Implemented

    Comments: Beginning in May 2008, USDA began receiving and reviewing monthly premium class travel reports for its eTravel service providers, (including data on both first and business class travel), to monitor premium class travel activity. These premium class travel reports include all executive travel. These reports are now to be reviewed, including an emphasis on the review of travel by executive staff.

    Recommendation: To improve USDA's ability to detect and prevent improper premium class travel, the Secretary of Agriculture should strengthen existing internal controls over the use of premium class travel by issuing policies and procedures requiring that USDA and USDA components monitor the frequency and cost of executive premium class travel.

    Agency Affected: Department of Agriculture

 

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