Report on - 1998 99 Travel Claims Audit

Report on - 1998 99 Travel Claims Audit

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File No.: 3944Report on – 1998/99 Travel Claims AuditMinistry for Children and FamiliesDistribution:Deputy Minister S. Manson SingerExecutive Financial Officer andAssistant Deputy MinisterManagement Services Division L. FosterSenior Financial Officer G. NuttallDirectorProgram and Management Audits M. ShintoInternal Audit BranchMinistry of Finance and Corporate RelationsOffice of the Comptroller GeneralJune 2000Table of ContentsSection Page No.Executive Summary...................................................................................1Detailed Comments and Conclusions......................................................21.0 Significant Issues for Management Attention ........................................ 22.0 Non-compliance with Policy..................................................................... 53.0 Other........................................................................................................... 7Executive SummaryWe have completed our audit of a sample of employees’ travelclaims for the 1998/99 fiscal year. The purpose of the audit was toassess the reasonableness and appropriateness of employee travelcosts, and to report on the degree of compliance with governmentand ministry travel policies and procedures.In total, we reviewed travel claims of 17 employees, over a four-month period. Our sample included 13 employees whose annualcosts exceeded $20,000, and four employees whose travel coststotalled ...

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Senior Financial Officer
File No.: 3944
Internal Audit Branch Ministry of Finance and Corporate Relations Office of the Comptroller General
June 2000
Director Program and Management Audits
Executive Financial Officer and Assistant Deputy Minister Management Services Division
M. Shint
S. Manson Singe
Report on – 1998/99 Travel Claims Audit
Ministry for Children and Families
L. Foste
Deputy Minister
G. Nuttall
Distribution:
Table of Contents Section
Page No.
Executive Summary ................................................................................... 1
Detailed Comments and Conclusions...................................................... 2
1.0
2.0
3.0
Significant Issues for Management Attention ........................................ 2
Non-compliance with Policy..................................................................... 5
Other ........................................................................................................... 7
Executive Summary
We have completed our audit of a sample of employees’ travel claims for the 1998/99 fiscal year. The purpose of the audit was to assess the reasonableness and appropriateness of employee travel costs, and to report on the degree of compliance with government and ministry travel policies and procedures.
In total, we reviewed travel claims of 17 employees, over a four-month period. Our sample included 13 employees whose annual costs exceeded $20,000, and four employees whose travel costs totalled between $10,000 and $20,000.
Generally, we found that travel claims were for legitimate business travel, properly authorized, supported, and in compliance with prescribed rates and allowances. However, we found that a more rigorous review of claims by the ministry spending authorities would reduce the risk of duplicate payments, uneconomical travel decisions, and excess mileage claims. In addition, the ministry could reduce travel costs by ensuring advanced flight bookings are made whenever possible.
We would like to extend our appreciation to the management and staff of the Management Services Division, for their assistance during this audit.
David J. Fairbotham Executive Director Internal Audit Branch
December 1, 2000
Report on 1998/99 Travel Claims Audit 1
Detailed Comments and Conclusions
1.0
Overall, we noted a number of issues similar to those identified and reported in our 1997/98 Travel Claims Audit Report, suggesting a more rigorous review of travel vouchers by the ministry spending authorities is still required. We have also identified issues for management’s attention, outlined in report section 1.0, and suggest that the implementation of an electronic travel reimbursement tool (options currently [June 2000] being researched by the government’s Best Practices Review Committee) would eliminate the minor calculation errors discussed in report section 3.0.
In following the established protocol for this assignment, we have not made contact with the employees or spending authorities included in our sample. As a result, various assumptions have been made regarding the travel situations we assessed. The ministry has investigated and addressed the issues presented below.
Significant Issues for Management Attention
Temporary Assignments
We identified the following issues involving temporarily assigned employees.
The Quesnel office offered a secondment agreement to an auxiliary Office Assistant to fulfil administrative duties. This agreement provided the employee full travel status, plus a paid flight home every second weekend for the duration of the four-month assignment. The resulting travel costs totalled approximately $24,000. However, secondment agreements are generally not to be negotiated with auxiliary staff, and the Master Agreement prohibits the payment of travel costs to seconded Group I staff after 60 days.
Ministry Comments:
Between November 1, 1997 and January 31, 1998, 71 children were removed from their homes by the ministry staff in Quesnel area. This action caused a major service delivery crisis for the ministry. The community raised issues regarding the ministry’s child protection practice, and three audits were conducted on child protection practice. As a result, most of the staff in three district offices went on sick leave. The Deputy Minister at the time asked the ministry Personnel Branch to staff the offices temporarily with those
2 Report on 1998/99 Travel Claims Audit
Uneconomical Travel
ministry employees who were available and willing to work in the Quesnel offices. Extreme measures, such as sending the auxiliary Office Assistant on travel status, were necessary in this crisis situation. This particular employee was with the ministry’s Cranbrook office since 1995.
Two employees did not cancel their hotel reservations, and claimed the resulting costs, when returning home for the weekend. In addition, two employees claimed private lodging allowances for evenings spent at home. The cost of these errors was approximately $700.
Ministry Comments:
Hotel reservations were not cancelled for one employee since the weekly rent option was used because it is very difficult to rent and leave rooms in small remote locations upon demand. The other employee has been reminded to cancel reservations wherever possible. Staff who claimed private accommodation allowance for evenings spent at home have been advised that this is not supported by financial policy. One employee has reimbursed the ministry, and the other is being located.
Employees were not always making and documenting travel decisions considering the most economical mode of travel, or taking proper advantage of discount airfares, when travelling on ministry business.
Ministry Comments:
The ministry is conducting travel related and spending authority training for all relevant staff. This training will address issues regarding economical travel, and the use of cost comparison sheets for identifying the most economical travel options.
We found the following.
The ministry is incurring unnecessary travel costs when employees do not take advantage of discount airfares for advanced bookings. For example, we noted that two seconded employees who were eligible to return home every second weekend, and who did so by way of air travel, did not book their airline tickets in advance. As a result, excessive flight costs of approximately $5,500 were incurred.
Report on 1998/99 Travel Claims Audit 3
Duplicate Claims
Ministry Comments:
Although in some situations it is not always possible for employees to advance-book flights, the ministry’s training will address cost savings available through advance bookings. However, the two seconded employees who did not use advance bookings explained that the reason they were seconded to Quesnel and Dease Lake was to deal with the crisis situation. Although the secondment agreement allowed them to travel home, they made a trip to their homes whenever the workload permitted. Therefore, they could not book regular flights in advance. The ministry agrees with this explanation.
Employees used their own private vehicles for long distance trips, without documenting the rationale for the decision on a cost comparison sheet. We estimate potential savings of approximately $3,300, had the employees in our sample used rental vehicles or flights rather than personal vehicles.
Ministry Comments:
All employees have been advised to use the cost comparison sheets when using private vehicles. The ministry has incorporated this issue in its training. However, the ministry suggests that, in certain situations, the car rental option may not be the most economical.
We found that one employee in our sample submitted a duplicate travel claim for the April 1 to April 30, 1998 period. This claim resulted in an overpayment to the employee of $1,748. We were informed that the ministry did not detect the duplicate payment and that the employee has since left the ministry.
Ministry Comments:
The ministry has investigated the duplicate travel claims for the April 1 to April 30, 1998 period. Since this employee no longer works for the government, the ministry is attempting to locate this person and work towards reimbursement.
We also noted other minor instances where duplicate claims and payments were made related to meal per diems and hotel room charges.
4 Report on 1998/99 Travel Claims Audit
Excessive Mileage Claims
2.0
Ministry Comments:
The ministry has contacted the employees who made duplicate claims for meals and accommodation, and has requested reimbursement of these claims. The ministry is conducting mandatory travel-related and spending authority training for relevant staff. In addition, staff may be disciplined.
We noted minor variations in the mileage claims relating to the same city-to-city trips. Since explanations for the excessive mileage claims were not provided on the associated travel vouchers, it was not possible to determine whether the claims were accurate.
We compared the distances between two points of travel within the province, as published in the British Columbia Accommodation Guide, to the mileage claims in the travel vouchers, allowing an additional ten percent for local travel. In total, we found that employees in our sample claimed approximately 2,300 kilometres more than our estimates, resulting in a potential overpayment of approximately $900.
Ministry Comments:
The ministry has contacted the employees whose travel vouchers had mileage-related discrepancies. The staff informed us that there is insufficient space on a travel voucher to explain the additional mileage, but that they will in future indicate, where possible, the additional locations visited. The ministry is also conducting mandatory travel-related and spending authority training for relevant staff.
Non-compliance with Policy
Temporary Assignments
We noted two issues related to the documentation of staff temporary assignments.
A documented agreement for one employee’s temporary assignment could not be located, and we were advised that the terms of the agreement were likely agreed to verbally. This employee was an auxiliary Management Level 5, temporarily assigned to the Terrace office from Kelowna. Over a 4-month period, this assignment incurred over $14,000 in travel-related costs.
One employee commenced duties and incurred travel costs prior to a secondment agreement being signed. Report on 1998/99 Travel Claims Audit 5
Travel Claim Support
Travel Voucher Completion
Ministry Comments:
The Temporary Assignment document does not reflect the travel status. However, the ministry staff has contacted the then Regional Operating Officer and confirmed that there was a verbal agreement for bringing this ML5 auxiliary manager on travel status. The recruitment difficulties in the North West Region made it necessary to provide such incentives to the staff.
We noted a number of instances where spending authority was not appropriately applied. Specifically, ten travel vouchers or invoices totalling approximately $1,700 were not approved by a valid spending authority.
Ministry Comments:
The staff has been advised to ensure the spending authority signatures appear on every travel voucher. This issue will be included in the ministry’s training plan.
Supporting documentation for travel claims could be improved by retaining and attaching receipts. We found that employees did not always attach airport improvement fee, toll booth, phone bill or ferry receipts to their claims to support the charges, dates, times and modes of travel.
Ministry Comments:
All employees will be advised through the ministry-wide training to ensure that all supporting documentation is attached to the travel vouchers.
Many of the travel vouchers examined did not provide sufficient detail to allow the spending authority to adequately assess the claim. For example, all vouchers examined were missing arrival and departure times. Some of the vouchers did not include the reason for travel, or the reason why certain allowances were not claimed. In addition, some travel vouchers were missing information on the location or mode of travel.
Ministry Comments:
Ministry-wide training will address the issue of providing detailed information on the travel vouchers, including departure and arrival times.
6 Report on 1998/99 Travel Claims Audit
3.0
Other
We noted other minor errors or concerns related to travel vouchers, including:
air travel being arranged and paid for personally by employees and subsequently reimbursed on two occasions, with one of these employees receiving frequent flyer Aeroplan points on this and other flights. During the period selected for review, these Aeroplan points were not subsequently used for ministry travel, and we were unable to verify whether the points were turned over to the ministry;
two car rental charges in excess of the negotiated rate;
minor calculation errors on some travel vouchers; and
some vouchers and invoices not completed or submitted on a timely basis.
Ministry Comments:
The ministry has reviewed these issues with the employees and reminded them about government policy. In addition, the ministry has established a divisional Financial Manager position in headquarters. The role of this manager is to ensure that all divisional transactions are properly routed through that office. The staff working for the divisional Financial Manager review travel vouchers before sending for payment. The ministry is also conducting travel-related and spending authority training for all relevant staff, and is considering disciplinary action for those staff involved.
Report on 1998/99 Travel Claims Audit 7