United States GAO General Accounting Office Washington, D.C. 20548 Accounting and Information Management Division R-276166 March 11,1937 Mr. James E. Reid Deputy Controller Department of Energy . Subject: RmnIovee Travel claims: SunerwsoxvADD roval of Vouchers Dear Mr. Reid: % letter responds to your request for our interpretation of the requirement for certain sumry/B approvals when processingvouchers for payment as set out in Title 7, “Fiscal Guidance,”of the .GAOPolicv and ProceduresManual for Guidance of Federal Agencies. Specifically,you asked if itispermissi ble to &minate supervisory approval of staff travel vouchers if alternative controls that provide the same level of assuranceare implemented. As described in your letter, the Department of Energy is modifying its existing temporary duty travel (TDY) processing system to streamline operations and reduce costs.’ Your letter stated that these system modi&ations would enable Energy to eliminate a number of processesin the current system while enhancing the sexviceto the travelers by shortening the time neededfor processing reimbursement. Your staff estimated that the modifkatious to streamline the system would result in about $213,66@annual saviugsor cost avoidance. We support initiatives to create a government that works better and costs less. At ‘The Joint Financial ManagementImprovement Program (JFMIP) establishedan interagency team in 1994to address travel reengineering. The obstacles, suggestedimprovements, and speci& recommendationsfor TDY and relocation travel are documented in JFMIP’s Im~rovha Travel Managementin Government, December 1996. qour staff emphasizedthat this estimate is provided as a basis for making an initial determination to implement system modifications and is based on certain assumptionsbelieved to be valid at the time of the estimate. GAO/AIMD-974R EmployeeTravel Claims (Energy) B-276166 the same time, we believe that agencieshave the responsibility to protect the government’sinterest. To supplement the information in your letter, we contacted your staff to discuss your question in more detail. Since we did not test your cuTrent system, our response only addressesyour question conceptually. As we have previously reported: supervisoryapproval of staff travel vouchers can be eliminated if (1) there are effective compensatingcontrols to determine the reasonablenessof travel claims and that the travel actually occurred and (2) there is an effective review procedure to determine that the controls in the travel claim processing system are working as intended. E3asedon our understanding of your proposal, we believe that you have adequatelyaddressedthese two conditions. Therefore, we have no objection to its implementation. Our assessmentof your proposal is discussedin detail in the following sections. ENERGY’SPROPOSAI, Presently, Energy’s travel claims are processedat 3 F’mancialservice Centers, which support 16 satellite offices where employeeswho travel are stationed. Each service center is assigneda number of satellite offices to serve. As your letter stated, Energy’s employeetravel systemis automate& The process begins with a travel authorization being approvedby a supervisor or equivalent official. Once.approved,but prior to travel, the authorization information is entered into the automated system. As explained by your staff, after a trip, a traveler would electronically input data onto a voucher for testing within the automatedsystem. Your staff stated that your office is currently designinga processthat would compare amounts claimed to related amounts authorjzd. If amountsclaimed in any category exceed authorized levels, the system,as designed,would suspendprocessing the voucher until either (1) the original travel authorizationis amendedas appropriate, approved by a supervisor, and reenteredinto I&e automated system or (2) the claim is reduced. Your staff said that supporting documentation, such as paid hotel bills, would be kept by the traveler for the proper retention period? : (GAO/AIMM&MR, July 2,1996}. ‘The retention period and storageprocedureswould follow the requirements in Title 8, “Records Retention,”of GAO’spolkv and ProceduresMan& 2 GACMAMD-9744REmployee Travel Claims (Energy) B-276166 Your staff stated that if the amounts claimed on the voucher do not exceed the authorization, the system would perform numerous edit routines comparing the amounts on the voucher against travel regulations (such as per diem limits for travel to certain cities) to help ensure that each voucher is valid @roper, legal, accurate, and correct). If any regulation is not followed, the system would suspendprocessingthe voucher until the amounts in question are properly approved or adjusted! Your staff also explained that a traveler would be required to use a government issued credit card when paying for transportation tickets and would be encouragedto use their cards when paying for hotel and car rental charges. The credit card company would forward electronic information on all credit card purchasesto Energy’s service centers. Energy’s automated system would compare each travel voucher with the related chargesreported on the governmentissued credit card. When credit card chargesfor tickets, hotel, and/or car rental do not substantiate that travel occurred to the location planned, the traveler would be requested to forward receipts and related documents to the service center for ver&ation.6 If the traveler cannot substantiatethat he or she was at the designatedlocation, the applicable claims would be disallow- Your staff explained that once the travel vouchers are fully processedand the travelers paid, a stat&tic& sample of the universe of all vouchers processed would be selectedfor testing to ensure that the system is working as intended, the claims are adequatelysupported and valid, and the travel actually occurred. The sampling plan would follow the requirements of Title 7, with samplesbeing selected at the service centers. Travelers whose vouchers are selected would be asked to forward the supporting receipts and documentation to their Service 5Energy’sstaff stated that the amounts in question &e those claimed that exceed limits set by regulation. These amounts are adjusted by (1) reduction so that they fall within the limits or (2) by special approval allowed by regulation. %nergy’s staff stated that during the Erst 1 to 3 months the system is operational, statbtics will be obtained on the frequency and materWity of claims for which credit card billings do not substantiatethat the authorized travel occurred. During this period, in all situations where credit card billings do not provide confirmation of travel, the traveler would be required to provide support After this initial period, based on the analysis of the stat&tics, Energy may require verification of out of town travel if warranted. As explained by your staff, an example of where verification may not be required is when a traveler uses his or her privately owned vehicle and does not stay overnight. 3 GAo/ALwT9744R Employee Travel Claims (Energy) B-276166 centers for detailed review and testing? Any discrepancieswould be researched and resolved by staff at the Servicecenters. The results of the sample and the supporting documentation would be retained for the proper retention period as specified in Title 8. GAO’SASSESSMENT OF THE PROPOSAI, The supexvisor’sapproval of travel vouchers is usually required as part of a system of controls to help ensure that all claims are valid when certified. Generally, the supervisor’sapproval of a travel voucher servestwo main purposes for the certifying office It indicates that the claims on the voucher seem reasonable and verilies that the travel actual& occurred. Each of these purpose4 along with the need for stat&i& sampiingprocedure4 is explained in the following sections. Determining the Reasonablenessof claimg .. ~. Under your proposal, the automated&stem perfoxmsedit routines comparing amounts claimed to limits set by regulations and by the travel authorization, thereby helping to establishif the claims are valid and reasonable. As your staff explained, if any claim exceedsthe regulatoxydollar limits, the system would stop processing the voucher until the discrepancyis resolved. Only then would the claim be ready for furfher processing. a Further, as we undemtandyourproposal, if the automatededits are effective and are verified to operate effectively by a periodic statMicaf sampling procedure, the “reasonableness” purpose would be satisfied. In our view, such detailed edits and sampling process would provide the same assurancefor a “reasonableness” verification by the super&or. VerifvinnThatthc Travel Actuallv Took Place VerHying that the travel actually took place would be achievedunder your proposal when the automated system electronically compares amounts &om two ‘Your staff stated that employeesknow that they may be required to fonvard receipts and supporting documentsto their service centers should questions arise about their claims or their vouchers be selectedin a sample for review. 4 GAO/~97-MR Employee Travel Claims (Energy) E276166 different sources-the traveler’svoucher and.information electronically provided by the credit card company. Transportation, lodging, or other claims would be compared with credit card chargesfor tickets, hotel bills, and other purchasesas provided Energy from the credit card company. In instances where a claim did not match a credit card hotel chargeto provide evidencethat the trip occurred, or the traveler did not use the credit card, the traveler would, except in certain situations, be requestedto substantiateout-of-town lodging claims by providing to the service center hotel receipts and other documents. Such automated routine as you propose, tested by an effectively implemented stat&i& sampling process, would provide the sameassurancesas does the supervisor’s verification of the travel. Performing Statistics t%unDlingProcedureg Although automatedcontrols provided in the edit routines in your proposal can play a major role in determiningthe validity of a claim and verifying that out-of- town travel actuaUyoccurred, they cannot determine -whether the claim is properly documented. Nor can they fully replace the role of a human reviewer. In order to test the automatedcontrols, the st&istical sampling you propose will help to further ensurethat the claims are properly documented and that the system proceduresand controls are operating as intended. The contents of3his letter were discussedwith Ms. Harriet Lankford of your staff. We hope our commentsare helpfuL If you have any questions or would like to discussthese matters further, pleasecontact me at (202) 4X2-9406or Bruce Michelson,As&&ant Director, at (202) 612-9366. _- sincerely your4 V Robert W. Gramling Director, CorporateAudit3 andstandards 6 GAO/AIMD-9744REmployee Travel Claims (Energy) .- .” Ordering Information The first copy of each GAO report and testimony is free. -Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. 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Employee Travel Claims: Supervisory Approval of Vouchers
Published by the Government Accountability Office on 1997-03-11.
Below is a raw (and likely hideous) rendition of the original report. (PDF)