To determine the extent of unauthorized use of travel cards during fiscal  year 2001, we tested a statistical sample of travel card transactions from  each of the five component agencies. HHS Travel Card Monitoring Process Has Effectively Minimized Delinquencies and Write-offs, but Some Unauthorized Use Still Occurs

Two key indicators of how well agencies monitor their travel card  programs are delinquency rates and write-off rates. At the end of fiscal year 2001, HHS’s delinquency rate  was lower than the governmentwide rate. Because the vast majority of HHS  cardholders pay their bills on time, write-offs as a percentage of total travel  card charges were lower than the governmentwide write-offs. Program coordinators told us they routinely  review the U.S. Bank reports to identify delinquent cardholders, and during  this review, they may also identify unauthorized charges. We estimate that 22 percent of IHS travel card  transactions for fiscal year 2001 were for unauthorized purposes. As table 6 shows, the main reason for problems at FDA was poor record  retention. While these amounts are minimal, they relate to only a  small percentage of travel voucher reimbursements for fiscal year 2001,  and if extrapolated to all travel reimbursements, the amount could be  significant. Further, in cases where the component agencies did not maintain adequate  documentation to support the amounts reimbursed on travel vouchers,  neither they nor we can determine if the travel voucher reimbursements  are proper. Unchecked, unauthorized use could lead to increased  delinquencies and write-offs, thus reducing the rebates HHS earns on its  travel card program. Recommendations for Executive Action

To reduce unauthorized and personal use of travel cards and help ensure  that travelers are not receiving reimbursements in excess of proper travel  expenses, we recommend that the Secretary of Health and Human Services  require component agencies to  include procedures in their monitoring efforts for periodically testing a  sample of travel card transactions to identify unauthorized travel card  charges and any adverse trends that would warrant further testing or  additional controls,  issue an alert to voucher processing staff/reviewers reminding them to  check vouchers for proper per diem amounts and amounts credited on  hotel bills, and  issue an alert to voucher processing staff/reviewers reminding them to  obtain and retain the necessary receipts needed to determine the  correct amount of travel reimbursement. Objectives, Scope, and Methodology

The objectives of our review were to determine whether (1) the  Department of Health and Human Services (HHS) has an effective process  for monitoring its travel card program to minimize delinquency rates, write- offs, and unauthorized use of the card and (2) HHS’s controls over travel  voucher processing are effective in helping ensure that travelers are not  receiving reimbursements in excess of proper travel expenses.
Why GAO Did This Study

By their nature, determining and paying allowable travel costs pose substantial risk, making effective internal control crucial. Because of this and weaknesses in internal control identified in the GAO review of travel card usage at the Department of Defense, GAO was requested to review the Department of Health and Human Services' (HHS) travel program. GAO assessed whether HHS's process for monitoring travel charge cards helps minimize delinquencies, write-offs, and unauthorized use. GAO also assessed whether controls over travel voucher processing help ensure proper reimbursements. GAO tested a statistical sample of travel card transactions at each of five HHS component agencies to determine if they were for authorized purposes. GAO also reviewed related travel vouchers to determine if reimbursement amounts were proper.

What GAO Found

HHS's process for monitoring its travel card program, which includes reviewing bank reports to identify delinquent cardholders, effectively minimized delinquencies and write-offs. However, some unauthorized use of the travel card still occurred. HHS delinquency rates were lower than governmentwide rates for most of 2001 and declined further in 2002. Also, HHS's .29 percent write-off rate--the amount of unpaid travel card charges written off as a percentage of total travel charges--was slightly lower than the governmentwide rate of .44 percent. HHS has not always identified or prevented unauthorized travel card use because its monitoring of travel card use focuses mainly on delinquencies. GAO estimated that unauthorized travel card transactions for fiscal year 2001 ranged from about 7 percent at one HHS component agency to about 22 percent at another. Examples of unauthorized charges included personal charges for meals and automated teller machine withdrawals. While unauthorized use had minimal negative monetary effect because the majority of cardholders who made these charges paid their travel card bills timely, left unchecked, such use could lead to increased delinquencies and write-offs. GAO also found weaknesses in voucher processing, inadequate review of vouchers, and poor record retention, resulting in some employees being reimbursed for more than allowable expenses and for amounts not properly supported. The excess reimbursement ranged from about $2 on one voucher to about $250 on another. While these amounts alone are insignificant and relate to only a small percentage of travel reimbursements for fiscal year 2001, excess reimbursements reduce the amount of available travel funds. Further, vouchers that are not supported by related receipts make it difficult to determine if the reimbursement amounts are proper.