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)

      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Accounting and Information
      Management Division


      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)
    the same time, we believe that agencieshave the responsibility to protect the
    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.
    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)
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)
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.

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.
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)
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
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

Robert W. Gramling
Director, CorporateAudit3

6                           GAO/AIMD-9744REmployee Travel Claims (Energy)
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