Management Letter

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

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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