oversight

Audit of FHFA's Fiscal Year 2017 Government Travel Card Program: FHFA Needs to Emphasize Certain Program Requirements to Travelers and Approving Officials

Published by the Federal Housing Finance Agency, Office of Inspector General on 2018-09-25.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

          Federal Housing Finance Agency
              Office of Inspector General




 Audit of FHFA’s Fiscal Year 2017
Government Travel Card Program:
FHFA Needs to Emphasize Certain
Program Requirements to Travelers
     and Approving Officials




Audit Report • AUD-2018-014 • September 25, 2018
                Executive Summary
                The Federal Housing Finance Agency (FHFA or Agency), like other agencies,
                and its employees use government travel cards to pay for travel expenses. For
                fiscal year 2017, FHFA employees submitted 2,048 travel vouchers, totaling
                $2,954,116, all of which were paid by FHFA.

AUD-2018-014    Last year, pursuant to the Government Charge Card Abuse Prevention Act
                of 2012 (Charge Card Act) and Office of Management and Budget (OMB)
September 25,   instructions, we completed a risk assessment of FHFA covering fiscal years
    2018        2015 and 2016. As reported, we concluded that based on FHFA’s internal
                control and other factors, the risk of illegal, improper, or erroneous purchases
                and payments through its travel card program during those two fiscal years
                was low (see Risk Assessment of FHFA’s Fiscal Years 2016 and 2015
                Government Purchase Card and Travel Card Programs (March 27, 2017)
                (OIG-RA-2017-001) (online at www.fhfaoig.gov/reports/RiskAssessments)).

                Because it has been four years since we last audited FHFA’s government
                travel card program, we audited the program’s policies, procedures, and
                transactions during fiscal year 2017. Our objectives were to determine
                whether (1) the Agency’s existing controls over the program provide
                reasonable assurance that improper payments will not occur or will be
                detected in the normal course of business and (2) payments for travel card
                transactions were properly supported as a valid use of Agency funds. We
                tested a sample of 68 travel vouchers as part of our audit.

                We found that FHFA has adequate written policies and procedures for its
                travel card program. However, those policies and procedures were not always
                followed. We noted exceptions to travel requirements in our sample related
                to: reimbursement for lodging taxes in states that exempt such taxes when a
                government-issued travel card is used to pay for lodging (13 vouchers), late
                filing of travel vouchers (20 vouchers), lack of an approved travel
                authorization before travel was initiated (2 vouchers), and lack of a lodging
                receipt (1 voucher). Additionally, we found that two FHFA employees on
                official travel did not use their government-issued travel cards to pay for
                lodging expenses and two other employees not on official travel used their
                travel cards to pay for nominal personal expenses. During our audit, FHFA
                took action to obtain refunds of the lodging taxes in the tax-exempt states and
                to obtain the missing lodging receipt. Also, according to FHFA, the
                employees who used their travel cards while not on official travel promptly
                paid their card balances.

                We make one recommendation to FHFA to address the shortcomings
                identified in this audit. In a written management response, FHFA agreed with
                the recommendation. FHFA’s planned corrective actions are responsive to our
                recommendation.

                This report was prepared by Heath Wolfe, Director of Audit Operations; with
                the assistance of Bob Taylor, Assistant Inspector General for Audits; and
                Christopher Mattocks, Auditor. We appreciate the cooperation of FHFA staff,
                as well as the assistance of all those who contributed to the preparation of this
AUD-2018-014    report.

September 25,   This report has been distributed to Congress, OMB, and others, and will be
    2018        posted on our website, www.fhfaoig.gov.

                Marla A. Freedman, Deputy Inspector General for Audits /s/
TABLE OF CONTENTS ................................................................
EXECUTIVE SUMMARY .............................................................................................................2

ABBREVIATIONS .........................................................................................................................5

BACKGROUND .............................................................................................................................6
      Charge Card Act Requirements ................................................................................................6
      OMB Requirements ..................................................................................................................7
      Applicability of the Federal Travel Regulation to FHFA .........................................................9
      OIG’s Prior Purchase Card Audit ...........................................................................................10

FACTS AND ANALYSIS.............................................................................................................11
      FHFA Has Adequate Written Policy and Procedures for its Travel Card Program;
      However, They Were Not Always Followed During Fiscal Year 2017 .................................11
             Reimbursement for Lodging Taxes in Exempted States (13 Vouchers) ........................11
             Untimely Vouchers (20 Vouchers) .................................................................................12
             Unapproved Travel Authorizations Before Travel Commenced (2 Vouchers) ..............12
             Other Travel Card Related Exceptions ...........................................................................12

FINDINGS .....................................................................................................................................13

CONCLUSION AND RECOMMENDATION .............................................................................14

FHFA COMMENTS AND OIG RESPONSE ...............................................................................14

OBJECTIVES, SCOPE, AND METHODOLOGY .......................................................................15

APPENDIX: FHFA MANAGEMENT RESPONSE ....................................................................17

ADDITIONAL INFORMATION AND COPIES .........................................................................19




                                        OIG • AUD-2018-014 • September 25, 2018                                                              4
ABBREVIATIONS .......................................................................

A/OPC                 Agency/Organization Program Coordinator

ARC                   Department of the Treasury’s Bureau of the Fiscal Service
                      Administrative Resource Center

Charge Card Act       Government Charge Card Abuse Prevention Act of 2012

Charge Card Plan      Charge Card Management Plan

Circular A-123,       OMB Circular No. A-123, Appendix B (Revised January 15, 2009),
Appendix B            Improving the Management of Government Charge Card Programs

FTR                   Federal Travel Regulation

FHFA or Agency        Federal Housing Finance Agency

GAO                   Government Accountability Office

OIG                   Federal Housing Finance Agency Office of Inspector General

OMB                   Office of Management and Budget

OMB M-13-21           Office of Management and Budget Memorandum M-13-21,
                      Implementation of the Government Charge Card Abuse Prevention Act
                      of 2012

TMC                   Travel Management Center

TMS                   Travel Management Service




                        OIG • AUD-2018-014 • September 25, 2018                        5
BACKGROUND ..........................................................................

Within FHFA, the Office of Budget and Financial Management manages the Agency’s
government travel card program. This office is charged with ensuring that FHFA’s travel
card program complies with the Charge Card Act 1 and applicable OMB requirements.

In July 2009, FHFA entered into an interagency agreement with the Department of the
Treasury’s Bureau of the Fiscal Service Administrative Resource Center (ARC) for services
related to FHFA’s government travel card program. ARC uses SAP’s ConcurGov travel
system for FHFA’s travel card program. ARC also monitors use of travel cards issued to
FHFA and its employees. Pursuant to its interagency agreement with FHFA, each month
ARC reviews all travel vouchers of $2,500 or more submitted by FHFA employees, and nine
randomly selected travel vouchers of less than $2,500 to test compliance with the Federal
Travel Regulation (FTR).

Charge Card Act Requirements

The Charge Card Act requires the head of each executive agency that has employees who use
travel cards to establish and maintain internal control activities to ensure the proper, efficient,
and effective use of such travel charge cards. Following are some of those control activities:

      •   A record exists in each executive agency of each holder of a travel card issued for
          official use;

      •   Periodic reviews are performed to determine whether each travel cardholder has a
          need for the travel card;

      •   Appropriate training is provided to each travel cardholder and each official with
          responsibility for overseeing the use of travel cards;

      •   Each executive agency has specific policies regarding travel cards issued for various
          component organizations and categories of component organizations, the credit limits
          authorized for various categories of cardholders, and categories of employees eligible
          to be issued travel cards; those policies are designed to minimize the financial risk to
          the Federal Government of the issuance of travel cards and to ensure the integrity of
          travel cardholders;




1
    See Public Law No. 112-194.



                                  OIG • AUD-2018-014 • September 25, 2018                             6
      •   Each executive agency uses effective systems, techniques, and technologies to prevent
          or identify improper purchases; and

      •   Each executive agency ensures that the travel card of each employee who ceases to be
          employed by the agency is invalidated immediately upon termination of employment.

Additionally, the Charge Card Act requires: (1) the Inspector General of each executive
agency with more than $10 million in travel card spending to conduct periodic audits or
reviews of travel card programs to analyze the risks of illegal, improper, or erroneous
purchases and payments. The audit or review findings along with recommendations to prevent
improper use of travel cards should be reported to the OMB Director and Congress; and
(2) each executive agency will provide for appropriate adverse personnel actions to be
imposed in cases where employees of the executive agency fail to comply with applicable
travel card terms and conditions or applicable agency regulations or commit fraud with
respect to a travel charge card, including removal.

OMB Requirements

OMB has issued two sets of guidance relating to travel card programs offered by federal
agencies: OMB Circular No. A-123, Appendix B (Revised January 15, 2009), Improving the
Management of Government Charge Card Programs (Circular A-123, Appendix B) and
OMB M-13-21, Implementation of the Government Charge Card Abuse Prevention Act of
2012 (OMB M-13-21).

Circular A-123, Appendix B requires federal agencies, including FHFA, to maintain and
annually submit to OMB a Charge Card Management Plan (Charge Card Plan) no later than
January 31. The Charge Card Plan is to include the following elements:

      •   Identification of key management officials and their responsibilities for the travel card
          program. These officials will include, but are not limited to, the agency/organization
          program coordinator (A/OPC), 2 approving officials or other equivalent officials, and
          other accountable/billing officials;

      •   Establishment of a process for formal appointment of cardholders and approving
          officials, where applicable;

      •   Description of agency training requirements;




2
    FHFA’s Financial Management Operations and Systems Manager serves as A/OPC for the Agency.



                                OIG • AUD-2018-014 • September 25, 2018                               7
   •   Management controls, policies, and practices for ensuring appropriate travel card
       usage and oversight of payment delinquencies, fraud, misuse, or abuse;

   •   Establishment of appropriate authorization controls;

   •   Explanation of how available reports and data are used for credit checks, monitoring
       delinquency, misuse, performance metrics, spend analysis, and other relevant
       transactions and program management issues;

   •   Documentation and record retention requirements;

   •   Recovery of travel cards and other documentation when employees terminate
       employment and, if applicable, when an employee moves to a different organization;
       and

   •   Description of how the agency will ensure the ongoing effectiveness of the
       actions taken pursuant to this guidance, including, but not limited to, evaluating the
       effectiveness of training, risk management controls, and refund management controls.

Circular A-123, Appendix B also prescribes policies and procedures to agencies regarding
how to maintain internal controls that reduce the risk of fraud, waste, and error in government
charge card programs.

OMB M-13-21 requires federal agencies, including FHFA, to review and update their Charge
Card Plan, as necessary, to reflect the following internal control activities:

To deter employee misuse of government cards, FHFA must implement penalties for card
violations that are jointly developed by Agency card management and human resources
components. These penalties must include salary offset, for instances of personal liability, and
disciplinary actions for a cardholder or approving official’s illegal, improper, or erroneous
purchases made with a purchase card, convenience check, integrated card, or travel card.
Disciplinary actions should include dismissal, as appropriate. FHFA’s Charge Card Plan must
define and apply appropriate and consistent employee disciplinary procedures, and comply
with joint external reporting required of the FHFA Office of Inspector General (OIG) and
Agency management; and

   •   To provide a summary of FHFA’s efforts to assess its internal controls, FHFA must
       summarize its overall results in completed compliance summaries and internal control
       assurance assessments in its annual Charge Card Plan.




                            OIG • AUD-2018-014 • September 25, 2018                                8
Applicability of the Federal Travel Regulation to FHFA

The FTR, issued by the General Services Administration, applies to appropriated federal
agencies. Among other things, the FTR requires:

    •    Travelers to submit travel authorizations prior to commencing travel;

    •    Travel authorizations should detail the expenses that the agency will pay;

    •    Travelers must ensure that all travel expenses are prudent and necessary;

    •    Travelers must provide a lodging receipt and a receipt for every authorized expense
         over $75 or a reason explaining why a receipt could not be furnished;

    •    Travelers must use their agency’s existing Travel Management Service (TMS) 3 to
         make travel arrangements;

    •    Travelers with government contractor-issued travel charge cards are required to use
         the cards for all official travel expenses unless exempted; and

    •    Travelers must submit travel vouchers within 5 working days after they complete their
         trip or period or travel; or every 30 days if they are on continuous travel.

FHFA holds the view that, as an independent agency, it is not subject to the FTR. It has
adopted a Travel Policy that states that FHFA will reimburse travel and travel-related
expenses incurred in the performance of official business in accordance with the FTR and the
Travel Policy. The Travel Policy further states that, to the extent inconsistencies arise between
it and the FTR, the Travel Policy will control.

FHFA’s Travel Policy and the FTR require FHFA employees to prepare travel authorizations
for approval by authorized officials, prior to the planned travel. No FHFA employee may
incur travel expenses prior to approval of the travel authorization. After the completion of
travel, FHFA employees are required by FHFA’s Travel Policy and the FTR to submit
completed travel vouchers for review and approval by authorized officials to obtain
reimbursement for expenses incurred during travel.

During fiscal year 2017, FHFA records report a total of 169 FHFA travel cardholders. Of
these 169 FHFA travel cardholders, 59 were authorized by FHFA to “self-approve” their own


3
  TMS is a service for booking common carriers (e.g., air, rail, and bus), lodging accommodations, and car
rental services as well as fulfilling (i.e., ticketing) reservations. A TMS may include a travel management
center (TMC), commercial ticket office, an electronically available system, other commercial methods of
arranging travel, or an in-house system.



                                 OIG • AUD-2018-014 • September 25, 2018                                      9
travel authorizations because of their travel frequency. 4 FHFA’s Travel Policy requires those
employees who “self-approve” travel authorizations to prepare travel vouchers that must be
reviewed by authorized officials.

For fiscal year 2017, ARC reviewed 271 travel vouchers paid by FHFA to determine whether
the vouchers complied with the FTR and, separately, whether the vouchers tested had all
required receipts attached. ARC noted that 11 vouchers (4%) tested had FTR errors (either
overpayments, underpayments, or another FTR noncompliance 5) and 18 vouchers (7%) did
not have all required receipts attached. While ARC’s testing is limited to the requirements of
FTR, these FTR compliance exceptions were also FHFA Travel Policy compliance
exceptions.

OIG’s Prior Purchase Card Audit

In 2014, we issued an audit report on FHFA’s travel card program. 6 In that report, we
reported that no misuse or fraudulent travel card transactions were identified during the audit.
We further noted that with limited exceptions, FHFA had implemented adequate safeguards
and internal controls with respect to travel cards, but that certain controls to ensure
compliance with applicable travel regulations, policies, and procedures could be strengthened
to further enhance FHFA’s travel card management. FHFA management took corrective
actions to address the prior audit recommendations.




4
 FHFA’s Travel Policy does not explicitly address the self-approval of travel authorizations. As the A/OPC
explained in writing:
        FHFA grants employees involved in examination related travel self-approval authority in
        ConcurGov. This authority is granted due to the nature and timing of the work. Examinations
        generally run four to six weeks per an examination schedule. Travelers have the ability to either
        stay on location at the examination or travel home on the weekends. With this authority, the
        employee creates and self approves their own travel authorization. However, travel vouchers must
        be reviewed and approved by their Approving Officials. FHFA reviews the list of self-approvers
        on an annual basis.
ARC confirms with FHFA annually, the FHFA employees who are permitted to self-approve travel authorizations.
5
 During the year, there were two nonmonetary instances of FTR noncompliance identified by ARC: a data
entry error and a case where the TMC was not used for reservations.
6
 See OIG, FHFA’s Use of Government Travel Cards (Mar. 20, 2014) (AUD 2014 010) (online at
www.fhfaoig.gov/Content/Files/AUD-2014-010.pdf).



                                OIG • AUD-2018-014 • September 25, 2018                                      10
FACTS AND ANALYSIS ...............................................................

FHFA Has Adequate Written Policy and Procedures for its Travel Card Program;
However, They Were Not Always Followed During Fiscal Year 2017

We found that FHFA’s Travel Policy, if fully implemented, prescribes a control regime that
provides reasonable assurance that improper payments would not occur or would be detected
in the normal course of business. However, our tests found shortcomings in implementation
that require heightened management attention.

For fiscal year 2017, we determined that a total of 2,048 travel vouchers, totaling $2,954,116,
were paid by FHFA. We selected and reviewed 68 travel vouchers totaling $138,309. We
tested the 68 travel vouchers for compliance with nine specific requirements in the FTR and
FHFA’s Travel Policy: (1) whether the travel authorization/voucher included a description/
purpose of the travel; (2) whether the vouchered expenses were included on the approved
travel authorization; (3) whether hotel taxes were paid/reimbursed in states that exempt taxes;
(4) whether the air travel, Amtrak, and/or rental cars were reserved through the TMC;
(5) whether the hotel rooms met federal requirements (FedRoom); (6) if a non-contract carrier
was used, was it authorized in advance; (7) if a travel advance was taken, was it authorized in
advance; (8) whether the traveler deviated from the authorized travel route; and (9) whether
the voucher was submitted within five working days.

For 40 of the 68 travel vouchers tested totaling $71,341, we found that the vouchers met the
nine requirements for which we tested and were properly supported as a valid use of Agency
funds. We now discuss the exceptions that we identified in the 28 vouchers in our sample,
totaling $66,968.

   Reimbursement for Lodging Taxes in Exempted States (13 Vouchers)

We found 13 travel vouchers where the travel cardholders paid and were reimbursed for
lodging taxes totaling $1,601 in states that exempt government issued travel cards from taxes.
FHFA’s Travel Policy requires travelers to pay applicable lodging taxes, unless exempted by
the state. The Travel Policy refers FHFA employees to the General Services Administration’s
website for additional information and tax-exempt forms.

After we informed FHFA that these employees paid and were reimbursed for lodging taxes in
exempt states, the A/OPC advised that the Agency initiated action to have the taxes refunded.




                           OIG • AUD-2018-014 • September 25, 2018                                11
   Untimely Vouchers (20 Vouchers)

The FTR and FHFA’s Travel Policy require FHFA employees to submit travel vouchers
within five working days after trip conclusion. Twenty (20) vouchers in our sample were
submitted more than 5 working days (between 6 and 48 working days) after the travel was
completed. The A/OPC attributed some late-filed vouchers to the schedules of traveling
employees who were working on extended out-of-town examinations and returning home
only on weekends. According to the A/OPC, this schedule made the timely completion of
travel vouchers “very difficult.”

This shortcoming was also cited in OIG’s 2014 audit report on FHFA’s travel card program.

   Unapproved Travel Authorizations Before Travel Commenced (2 Vouchers)

The FTR and FHFA’s Travel Policy require FHFA employees to obtain approval, from
authorized officials, of travel authorizations prior to the planned travel.

We found that for two tested travel vouchers totaling $4,644, FHFA employees did not have
an approved travel authorization before they initiated their travel.

This shortcoming was also cited in our 2014 audit report on FHFA’s travel card program.

   Other Travel Card Related Exceptions

Our testing also revealed the following exceptions:

   •   FHFA’s Travel Policy requires travelers to submit receipts for lodging and any
       expense over $75. For one tested travel voucher, the traveler did not submit a receipt
       for $584 in claimed lodging expenses. During our audit, FHFA provided the missing
       lodging receipt.

Our sample of 68 vouchers was statistically selected to be projectable. Due to the nature of or
the low frequency of the exceptions found, we did not make projections of the exceptions to
the population of fiscal year 2017 travel vouchers.

During the audit, in addition to our review of the sampled 68 travel vouchers, we analyzed
charges billed to the Agency’s central government travel card and to the FHFA employees’
government-issued travel cards to determine whether employees (a) used their travel cards
when they were not authorized to travel and/or (b) used another credit card (i.e., the Agency’s
centrally billed travel card or their own personal credit card) while they were on official
travel. That analyses identified:




                           OIG • AUD-2018-014 • September 25, 2018                                12
   •   The FTR and FHFA’s Travel Policy require FHFA employees with government-
       issued travel charge cards to use the cards for all official travel expenses, unless
       exempted. We found that two FHFA employees on official travel did not use their
       government-issued travel cards to pay for lodging expenses totaling $1,471. There was
       no documentation that an exemption applied.

   •   The FTR and FHFA’s Travel Policy require FHFA employees to use their
       government-issued travel cards only for official travel. We found that two FHFA
       employees not on official travel used their government-issued travel cards to pay for
       nominal personal expenses (parking: $4; pharmacy: $21). FHFA’s A/OPC advised that
       the employees unintentionally used their government credit cards. In its technical
       comments to a draft of the report, FHFA informed that both employees promptly paid
       their card balances.


FINDINGS .................................................................................

As part of our audit, we reviewed FHFA’s Charge Card Plan that the Agency submitted to
OMB on January 24, 2017, and found that it included the elements required by Circular
A-123, Appendix B and OMB M-13-21. FHFA also has adequate written policies and
procedures for the travel card program, but they were not always followed. Specifically,
we found the following for the tested fiscal year 2017 travel vouchers:

   •   Thirteen vouchers involved travel cardholders that paid and were reimbursed for
       lodging taxes in states that exempt government-issued travel cards from taxes.

   •   Twenty vouchers were submitted more than 5 working days (between 6 and 48
       working days) after the travel was completed.

   •   Two vouchers did not have an approved travel authorization before the FHFA
       employees initiated their travel.

   •   One voucher did not include a receipt for claimed lodging expenses.

We also found that two FHFA employees on official travel did not use their government-
issued travel cards to pay for lodging expenses and two other FHFA employees not on official
travel used their government-issued travel cards to pay for nominal personal expenses.




                          OIG • AUD-2018-014 • September 25, 2018                              13
CONCLUSION AND RECOMMENDATION ...................................

FHFA policies and procedures for the use of travel cards, if fully implemented as described,
prescribe a control regime that provides reasonable assurance that improper payments would
not occur or would be detected in the normal course of business. Our tests found some
compliance shortcomings with certain requirements. We believe that the shortcomings can
be addressed through reinforcement of the requirements by the A/OPC, as well as through
training provided to FHFA’s travelers and approving officials.

We recommend that FHFA:

   1. Reinforce FHFA’s government travel card policies and procedures through periodic
      reminders to, and training of, FHFA travelers and approving officials, including
      requirements to ensure:

           •   Travel cardholders do not pay lodging taxes in states that exempt government
               issued travel cards from taxes;

           •   Employees submit vouchers within five working days after employees
               complete their travel, initiate travel only after their travel authorizations are
               approved, and submit required receipts with travel vouchers;

           •   Employees use their government-issued travel cards for all official travel
               expenses; and

           •   Employees use travel cards only for official travel.


FHFA COMMENTS AND OIG RESPONSE .....................................

We provided FHFA an opportunity to respond to a draft of this audit report. In its
management response, which is included in the Appendix to this report, FHFA agreed
with the recommendation. FHFA stated that it will send out periodic travel reminders to
employees, which will cover the four topics in the recommendation. The initial reminder will
be sent by December 31, 2018. FHFA also stated that it will develop and distribute training
materials that cover these requirements to employees by June 30, 2019. We consider FHFA’s
planned corrective actions responsive to our recommendation.




                            OIG • AUD-2018-014 • September 25, 2018                                14
OBJECTIVES, SCOPE, AND METHODOLOGY ...............................

The objectives of our audit were to determine whether (1) FHFA’s existing controls over the
travel card program provide reasonable assurance that improper payments will not occur or
will be detected in the normal course of business and (2) payments for travel card transactions
were properly supported as a valid use of Agency funds. The scope of the audit focused on
FHFA’s policies and procedures over its travel card program and FHFA’s travel card
transactions between October 1, 2016, and September 30, 2017 (i.e., fiscal year 2017).

To address our objectives, we:

   •   Researched applicable laws, regulations, policies, and procedures applicable to
       FHFA’s government travel card program;

   •   Reviewed the Charge Card Act, OMB M-13-21, and the FTR regarding requirements
       that apply to FHFA;

   •   Reviewed the FHFA Director’s Federal Managers’ Financial Integrity Act of 1982
       Statement of Assurance for fiscal year 2017 for any mention of internal control
       matters related to FHFA’s travel card program;

   •   Determined whether FHFA maintained and annually submitted its Charge Card Plan
       no later than January 31 for the audit period;

   •   Determined whether FHFA summarized its overall results in completed compliance
       summaries and internal assurance assessments in its annual Charge Card Plan;

   •   Determined the dollar amounts and other relevant statistical information for FHFA’s
       travel card program for fiscal year 2017;

   •   Interviewed FHFA’s Deputy Chief Financial Officer and other appropriate officials
       responsible for FHFA’s travel card program about (a) whether they had knowledge of
       any fraud or suspected fraud affecting the program, (b) whether they were aware of
       any allegations of fraud or suspected fraud affecting the program, (c) the nature and
       extent of monitoring they performed over the program, and (d) whether and how
       management communicated to cardholders and approving officials its views on the
       proper use of travel cards;

   •   Determined whether FHFA and/or ARC conducted any compliance testing of FHFA’s
       travel card program. This included obtaining (a) an understanding of the compliance




                           OIG • AUD-2018-014 • September 25, 2018                                15
       testing program in place during the audit period and (b) the results of the compliance
       testing performed, including any findings and recommendations;

   •   Reviewed the Government Accountability Office’s (GAO) report on its audit of
       FHFA’s financial statements for fiscal year 2017 to determine whether any
       deficiencies were reported related to FHFA’s travel card program. We also inquired of
       GAO staff about the scope and results of any testing of the program done for the
       review period of FHFA’s financial statements;

   •   Selected a statistical sample of 68 travel vouchers (excluding voucher fees) totaling
       $138,309 from the universe of 2,048 vouchers totaling $2,954,116 that were paid by
       FHFA for fiscal year 2017. The statistical sample size was the minimum required for a
       10 percent margin of error for a 90 percent confidence level. For the 68 vouchers, we
       tested for compliance with provisions of the FTR and FHFA’s Travel Policy to include
       requirements for the proper authorization of travel, allowability of travel expenses
       claimed, and the review, posting, and approval of travel authorizations and vouchers;

   •   Analyzed the charges to the Agency’s centrally billed government travel card and
       FHFA employees’ government-issued travel cards to determine whether employees
       (a) used their travel cards when they were not authorized to travel and (b) used another
       credit card (i.e., the Agency’s centrally billed travel card or their personal credit card)
       while on official travel;

   •   Assessed the reliability of data received for this audit as determined necessary by
       corroborating the information with other source data; and

   •   Assessed the Agency’s internal controls related to the travel card program.
       Specifically, we evaluated the program’s control standards, including control activities
       and monitoring.

We conducted this performance audit between December 2017 and September 2018 in
accordance with generally accepted government auditing standards. Those standards require
that audits be planned and performed to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings and conclusions, based
on our audit objectives.




                           OIG • AUD-2018-014 • September 25, 2018                                   16
APPENDIX: FHFA MANAGEMENT RESPONSE .............................




                  OIG • AUD-2018-014 • September 25, 2018     17
OIG • AUD-2018-014 • September 25, 2018   18
ADDITIONAL INFORMATION AND COPIES .................................


For additional copies of this report:

   •   Call: 202-730-0880

   •   Fax: 202-318-0239

   •   Visit: www.fhfaoig.gov



To report potential fraud, waste, abuse, mismanagement, or any other kind of criminal or
noncriminal misconduct relative to FHFA’s programs or operations:

   •   Call: 1-800-793-7724

   •   Fax: 202-318-0358

   •   Visit: www.fhfaoig.gov/ReportFraud

   •   Write:

                FHFA Office of Inspector General
                Attn: Office of Investigations – Hotline
                400 Seventh Street SW
                Washington, DC 20219




                            OIG • AUD-2018-014 • September 25, 2018                        19