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United States General Accounting Office: 
GAO: 

Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce, House of Representatives. 

February 2003: 

Department Of Health And Human Services: 

Controls over Travel Program Are Generally Effective, but Some 
Improvements Are Needed: 

GAO-03-334: 

GAO Highlights: 

Highlights of GAO-03-334, a report to the Chairman, Subcommittee on 
Oversight and Investigations, Committee on Energy and Commerce, House 
of Representatives. 

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. 

As shown below, 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. 

Figure: HHS Delinquency Rates for Fiscal Years 2001 and 2002 Compared 
to Governmentwide Rates: 

[Se PDF for image] 

This figure is a multiple line graph. The vertical axis of the graph 
represents percent from 0 to 15. The horizontal axis of the graph 
represents four fiscal year quarters: FY 01, first and third quarters; 
FY 02 first and third quarters. Lines depict delinquency rates in three 
categories: HHS; Civilian agencies, excluding HHS; Governmentwide, 
excluding HHS. 

Source: General Services Administration data. 

[End of figure] 

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 writeoffs. 

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. 

What GAO Recommends: 

GAO recommends that HHS require component agencies to: 

* periodically test a sample of travel card transactions to identify 
unauthorized travel card charges and; 

* reinforce the requirement that voucher processing staff/reviewers 
check vouchers for proper per diem amounts and amounts credited on hotel
bills and obtain and retain the necessary receipts. 

HHS concurred with our recommendations and stated that it is working to 
implement them. 

[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-334]. 

To view the full report, including the scope and methodology, click on 
the link above. For more information, contact Linda Calbom at (202) 512-
9508 or calboml@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Scope and Methodology: 

HHS Travel Card Monitoring Process Has Effectively Minimized 
Delinquencies and Write-offs, but Some Unauthorized Use Still Occurs: 

Controls over Travel Voucher Processing Could Be Improved: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Comments from the Department of Health and Human Services: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables Table 1: Fiscal Year 2001 Travel Card Activity at HHS Component 
Agencies Selected for Review: 

Table 2: Write-offs of Travel Card Charges: 

Table 3: Estimate of Unauthorized Fiscal Year 2001 Travel Card 
Transactions: 

Table 4: Number and Category of Unauthorized Travel Card Transactions: 

Table 5: Estimate of Travel Vouchers Related to Fiscal Year 2001 Travel 
Card Transactions That Were in Excess of Proper Travel Expenses or Were 
Not Properly Supported: 

Table 6: Number of Travel Vouchers Related to Fiscal Year 2001 Travel 
Card Transactions That Were in Excess of Proper Travel Expenses or Were 
Not Properly Supported: 

Table 7: Fiscal Year 2001 Travel Card Activity at HHS Component 
Agencies Selected for Review: 

Table 8: Estimates of Fiscal Year 2001 Unauthorized Travel Card 
Transactions: 

Table 9: Summary of Cardholders with Unauthorized Transactions Who Had 
Their Accounts Written Off during Fiscal Year 2001: 

Table 10: Estimates of Travel Vouchers Relating to Fiscal Year 2001 
Travel Card Transactions That Were Not Properly Supported or Were 
Overstated: 

Figure: 

Figure 1: HHS Travel Card Delinquency Rates for Fiscal Years 2001 and 
2002 Compared to Governmentwide Rates: 

Abbreviations: 

ATM: automated teller machine: 

CMS: Centers for Medicare and Medicaid Services: 

FDA: Food and Drug Administration: 

GSA: General Services Administration: 

HHS: Department of Health and Human Services: 

IHS: Indian Health Service: 

NIH: National Institutes of Health: 

OMB: Office of Management and Budget: 

OS: Office of the Secretary: 

[End of section] 

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

February 21, 2003: 

The Honorable James Greenwood: 
Chairman: 
Subcommittee on Oversight and Investigations: 
Committee on Energy and Commerce: 
House of Representatives: 

Dear Mr. Chairman: 

The Department of Health and Human Services (HHS), like other federal
agencies, issues travel cards to personnel for expenses related to 
official government travel. The travel card program is intended to 
improve convenience for the traveler and to reduce the government’s 
administrative costs. By their nature, determining and paying allowable 
travel costs pose substantial risk, making effective internal control 
crucial. Because of this and weaknesses identified in our reviews of 
travel card usage at the Department of Defense, [Footnote 1] you asked 
us to review HHS’s travel program. Specifically, you requested that we 
determine whether (1) 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. This 
report provides the results of our review of travel card use at five 
HHS component agencies for fiscal year 2001. 

Results in Brief: 

HHS’s process for monitoring its travel card program has been effective 
in minimizing delinquencies and write-offs. HHS’s travel card 
delinquency rates were lower than the governmentwide rates in fiscal 
years 2001 and 2002. For example, in December 2001, the governmentwide 
rate was 12.6 percent, compared to HHS’s rate of 9.3 percent, and in 
August 2002, the governmentwide rate was 6.6 percent, while HHS’s rate 
had declined sharply to 1.9 percent. Similarly, HHS’s write-off 
rate—the amount of unpaid travel card charges written off as a 
percentage of total travel card charges—was slightly lower than the 
governmentwide rate. The HHS travel card write-off rate was .29 percent 
as compared to the governmentwide rate, which was .44 percent. 
[Footnote 2] 

We attribute HHS’s better-than-average performance to its monitoring
process, which includes reviews of monthly bank reports by program
coordinators to identify delinquent cardholders and actions such as
contacting the cardholders and their supervisors to inform the 
cardholders that they need to pay their travel card bills. The low 
delinquency and writeoff rates can also be attributed to workforce 
demographics. HHS employees whose jobs require travel tend to be higher 
paid and have many years of work experience making them more likely to 
pay their bills on time. 

While HHS’s monitoring efforts help keep delinquencies and write-offs
lower than other federal agencies, the efforts have not always 
identified or prevented unauthorized use of the card. We found 
instances of unauthorized travel card use at each of the five component 
agencies we reviewed. The percentage of unauthorized transactions 
ranged from 7 percent at one component to 22 percent at another. 
[Footnote 3] Examples of unauthorized use included (1) personal charges 
for meals and automated teller machine (ATM) withdrawals, (2) charges 
that were for business-related purposes, but still unauthorized, such 
as parking for local meetings, and (3) charges for which the component 
agencies did not provide us with documentation supporting that the 
transactions were related to official government travel. When employees 
are issued travel cards, they sign agreements that they will use the 
travel cards only for authorized official government travel expenses. 
The cases of unauthorized use we identified had minimal negative effect 
because the majority of the cardholders who made these charges paid 
their travel card bills on time. At the same time, using the travel 
card for unauthorized purposes violates the Federal Travel Regulation, 
and, left unchecked, could lead to increased delinquencies and write-
offs in the future. 

Our review also determined that weaknesses in HHS controls over travel
voucher processing at five component agencies resulted in some 
employees being reimbursed for amounts that were not correct or not
properly supported, mainly because of inadequate review of travel
vouchers and poor record retention. The most common errors that we
identified were reimbursement for (1) per diem in excess of authorized
amounts and (2) items such as telephone calls and hotel taxes that the
hotel charged to the traveler, and then credited to the traveler’s 
account. We found such errors in 20 of the 349 vouchers we reviewed. 
The amount of excess reimbursements we identified ranged from about $2 
on one voucher to over $250 on another. While these amounts alone are
insignificant, they relate to only a small percentage of travel
reimbursements for fiscal year 2001, and if extrapolated to all travel
reimbursements, the amounts could be significant. Excess amounts
reimbursed reduce the amount of travel funds available during the year 
for other mission-related activities requiring travel. In addition, we 
could not determine the validity of reimbursements for 14 of the 349 
vouchers because the component agencies did not maintain adequate 
supporting documentation. Therefore, neither they nor we can determine 
if the travel voucher reimbursements are proper. 

This report makes recommendations that, if fully implemented, will help
HHS to reduce unauthorized and personal use of travel cards and help
ensure that travelers are not receiving reimbursements in excess of 
proper travel expenses. HHS concurred with our recommendations and 
stated that it is working to implement them. HHS’s written comments and
separate technical comments are evaluated in the “Agency Comments and
Our Evaluation” section near the end of our report. 

Background: 

HHS is the U.S. government’s principal agency for protecting the health 
of all Americans and providing essential human services. To help 
fulfill its mission, HHS requires many of its employees to travel 
throughout the country, and the world, to inspect food and drug 
manufacturers, administer Medicare and Medicaid programs, attend 
conferences, and perform other functions in furthering its mission. 
Federal regulations require most HHS employees who travel to use the 
government travel card—a type of charge card—for all official travel-
related expenses. The federal government’s travel card program is 
significantly different from its purchase card program in that the 
cardholder is directly responsible for all charges incurred on his or 
her travel card account and the monthly bill is sent to the cardholder 
for payment. The cardholder is responsible for submitting a properly 
documented travel voucher and is reimbursed by HHS for all valid 
expenses related to official government travel. In contrast, all 
purchase card charges are billed directly to the government for 
payment. 

Travel Cards: 

In 1983, the General Services Administration (GSA) awarded a
governmentwide master contract with a private company to provide
government-sponsored, contractor-issued travel cards to federal
employees to be used to pay for costs incurred on official government
travel. The intent of the travel card program was to improve convenience
for the traveler and to reduce the government’s cost of administering 
travel by reducing the need for cash advances to the traveler and the
administrative workload associated with processing and reconciling 
travel advances. Under the current GSA master contract, HHS entered 
into a task order with U.S. Bank to provide travel card services. 

The Travel and Transportation Reform Act of 1998 (P.L. 105-264) expanded
the use of government travel cards by mandating the use of the cards 
for all official travel expenses unless specifically exempted. The act 
is intended to further reduce the overall cost of travel to the federal 
government through reduced administrative costs and by taking advantage 
of rebates from the travel card contractor based on the volume of 
transactions incurred using the card and on cardholders paying their 
monthly travel card bills on time. To help cardholders pay their 
monthly bills on time, the act also requires that agencies reimburse 
cardholders for proper travel claims within 30 days of submission of 
proper travel vouchers. Further, the act allows, but does not require, 
agencies to offset a cardholder’s pay for amounts the cardholder owes 
to the travel card contractor as a result of travel card delinquencies 
not disputed by the cardholder. As required by the act, GSA 
incorporated its requirements into the Federal Travel Regulation, which 
governs travel and transportation and relocation allowances for all 
federal government employees, including overall policies and procedures 
governing the use of government travel cards. Agencies are required to 
follow the requirements of GSA’s Federal Travel Regulation, but can 
augment these with their own implementing regulations. 

In accordance with the act, HHS employees are required to use the travel
card for official travel expenses, including cash advances through ATM
machines. Travelers do not have to use their travel cards for laundry 
and dry cleaning, parking, taxi, tips, meals when the use of the card 
is not practical, and in cases where the vendor does not accept the 
card. The travel card is not to be used for personal purchases or ATM 
withdrawals unrelated to official travel. In fiscal year 2001, HHS had 
almost 40,000 individually billed travel card accounts and about $73.4 
million in related travel card charges. 

Travel cardholders are responsible for paying their travel card bills 
upon receipt of their monthly statements. The bank may suspend an 
account if payment for any undisputed principal amount is not received 
within 60 calendar days from the closing date on the statement on which 
the unpaid charge first appeared. Suspension means the cardholder will 
be unable to use the travel card until the bank receives payment. The 
bank may cancel an account if (1) the account has been suspended twice 
during a 12-month period for nonpayment of undisputed principal amounts 
and is past due again with payment not received within 45 calendar days 
from the closing date on the billing statement in which the charge 
first appeared or (2) the account is 126 days past due from the closing 
date on the billing statement in which the unpaid charge first 
appeared. When the card is canceled due to nonpayment, the bank may 
report the delinquency to credit bureaus and refer the account to 
collection agencies. If an account becomes 180 days past due, the bank 
can write off the account. 

HHS component agencies receive quarterly rebates from U.S. Bank based
on the volume of transactions incurred using the card and on cardholders
paying their monthly travel card bills on time. The rebate amount is
reduced if significant numbers of cardholders do not pay their bills on 
time. 

Each of the component agencies has program coordinators [Footnote 4] 
who are responsible for the travel card program in their offices. We 
were told that individuals were given this responsibility as a 
collateral duty, in addition to other travel-related or administrative 
duties. [Footnote 5] The program coordinators monitor travel card 
usage, serve as focal points for answering questions, submit travel 
card applications to the bank on behalf of the travelers, issue travel 
cards, and retrieve the cards from employees when they leave HHS. 
Program coordinators told us they monitor travel card usage by 
reviewing monthly reports from U.S. Bank, mainly to identify delinquent 
cardholders. Once the delinquent cardholders are identified, the 
program coordinators told us that they contact the cardholders and 
their supervisors to take action to get the bills paid. 

Travel Process: 

Each of the five component agencies we reviewed has its own travel
process and system, although they all operate similarly. In most cases,
travel orders and travel vouchers are prepared and approved 
electronically. When a cardholder is required to travel for official 
government purposes, either administrative staff or the traveler 
prepares a travel order by entering travel information in the component 
agency’s automated travel system. The information entered includes 
duration and points of travel, amounts of per diem and ATM advances 
authorized, and mode of travel. The travel order is then automatically 
routed to the appropriate authorizing official(s) for approval. 

Within 5 working days of return, the traveler is required to submit a
voucher claiming allowable expenses incurred while on travel. The
traveler (or the agency’s administrative staff) prepares a travel 
voucher, which includes an itemized list of travel expenses. The 
automated system routes the travel voucher to one or more persons for 
approval. The final approving official, depending on the component 
agency, may be the traveler’s supervisor or a staff member in the 
travel/financial management office. The approving official is to ensure 
proper receipts are attached, per diem rates are correct, and expenses 
are properly claimed. 

The voucher is then routed to the payment office for reimbursement to 
the traveler. Some vouchers are selected for audit either before or 
after payment is made, depending on the component agency. These audits 
are to consist of a complete, thorough review of the voucher, including 
verifying that (1) correct per diem rates were used, (2) applicable 
receipts are attached and the amounts claimed on the voucher are 
supported by the receipts, (3) all other expenses are properly claimed, 
and (4) calculations are correct. The vouchers selected for audit 
include (1) all vouchers for senior executive staff and political 
appointees, (2) all vouchers over $1,500 or $2,500, depending on the 
component agency, (3) all relocation vouchers, and (4) a sample of the 
remaining vouchers. In accordance with the Travel and Transportation 
Reform Act of 1998 and implementing federal regulations, HHS has 30 
days after the traveler submits a proper travel voucher to reimburse 
the traveler. 

Scope and Methodology: 

We selected five HHS component agencies for review based on the amount
of travel card activity and delinquency rates in fiscal year 2001. 
Table 1 shows the amounts of travel card activity for these component 
agencies in fiscal year 2001. These five component agencies, which 
incurred approximately 370,000 transactions in the amount of $48.8 
million, covered nearly 70 percent of HHS’s travel card activity in 
fiscal year 2001. 

Table 1: Fiscal Year 2001 Travel Card Activity at HHS Component 
Agencies Selected for Review: 

Component agency: Centers for Medicare and Medicaid Services (CMS); 
Number of travel card transactions: 68,248; 
Dollar value of transactions: $9.0 million. 

Component agency: Food and Drug Administration (FDA); 
Number of travel card transactions: 83,552; 
Dollar value of transactions: $14.2 million. 

Component agency: Indian Health Service (IHS); 
Number of travel card transactions: 99,167; 
Dollar value of transactions: $7.6 million. 

Component agency: National Institutes of Health (NIH); 
Number of travel card transactions: 43,173; 
Dollar value of transactions: $7.6 million. 

Component agency: Office of the Secretary (OS); 
Number of travel card transactions: 75,700; 
Dollar value of transactions: $10.4 million. 

Source: U.S. Bank data provided by HHS. 

[End of table] 

To determine whether HHS has an effective process for monitoring its
travel card program to minimize delinquency rates, write-offs, and
unauthorized use of the card, we obtained an understanding of the travel
card program, both departmentwide and for the five individual component 
agencies. We interviewed HHS staff and officials and reviewed HHS’s
departmentwide and individual component agencies’ policies and
procedures to identify procedures for monitoring their travel card
programs. We also obtained data from GSA on delinquency rates and 
writeoffs and compared HHS to other federal agencies. We did not assess 
the reliability of the GSA data. 

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. To select the 
sample, we obtained (1) a database of HHS travel card transactions for 
fiscal year 2001 from U.S. Bank, the contractor that administers the 
HHS travel card program, and (2) lists of fiscal year 2001 travel 
orders and vouchers from the five component agencies. From the U.S. 
Bank data, we selected random samples of travel card transactions for 
each of the five component agencies. Using the list of travel orders 
and vouchers and information about each travel card transaction (i.e., 
date of transaction, location of merchant, etc.), we determined whether 
the selected transactions were for expenses of official travel. We also 
used information provided by the component agencies about individual 
transactions to determine whether they were authorized. Using the U.S. 
Bank data, we determined whether those cardholders who used their 
travel cards for unauthorized purposes paid their bills timely. 

To determine whether controls over travel voucher processing are 
effective in helping ensure that travelers are not receiving 
reimbursements in excess of proper travel expenses, we identified the 
travel voucher covering each of the transactions in our statistical 
sample and tested whether the reimbursement amount was proper. For each 
voucher in the sample, we verified that correct per diem rates were 
used, verified that ATM cash withdrawal fees were calculated correctly, 
determined if the necessary receipts were attached and the correct 
amounts were claimed on the voucher, and verified that the calculations 
on the voucher were accurate. 

Appendix I provides further detail on our scope and methodology. We
conducted our work from May 2002 through November 2002 in accordance
with generally accepted government auditing standards. We requested
comments on a draft of this report from the Secretary of Health and 
Human Services or his designee. We received written comments as well as
separate technical comments which we have considered and incorporated
into our report as appropriate. We have reprinted the written comments 
in appendix II. 

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 [Footnote 6] and write-off rates. 
[Footnote 7] For the past 2 years, HHS’s delinquency rates and write-
off rates have been lower than the governmentwide rates. HHS’s lower 
delinquency and write-off rates indicate that its monitoring process is 
effective, but also can be attributed to demographics of the workforce. 
Travel card program coordinators monitor monthly bank reports to 
identify delinquent cardholders and follow up with them to get their 
bills paid. However, because the monitoring efforts focus primarily on 
delinquencies, some unauthorized use goes undetected. We found 
unauthorized transactions such as charges for personal meals and 
charges for business-related purposes that should not have been paid 
for with the travel card. In assessing the impact that unauthorized use 
had on the travel card program, we determined that the majority of the 
employees responsible for the unauthorized use paid their bills timely, 
thus having minimal effect on the rebate amount. However, when 
employees use their travel cards for unauthorized purposes, it 
increases the risk that they could become delinquent and have their
accounts written off, thus reducing the agency’s future rebates. 

Monitoring Process Is Generally Effective: 

Travel card program coordinators monitor monthly bank reports to 
identify delinquent cardholders. According to the program coordinators, 
when they identify these cardholders, they take action, such as 
contacting the cardholders and their supervisors to inform them that 
they need to pay their travel card bills so that the delinquencies do 
not continue. These procedures have been effective in minimizing HHS’s 
delinquency rates and write-off amounts. At the end of fiscal year 
2001, HHS’s delinquency rate was lower than the governmentwide rate. 
Figure 1 shows HHS’s delinquency rates for fiscal years 2001 and 2002 
(through August) compared to the governmentwide rates, excluding HHS, 
and to the rates of other civilian agencies, excluding HHS. 

Figure 1: HHS Delinquency Rates for Fiscal Years 2001 and 2002 Compared 
to Governmentwide Rates: 

[Se PDF for image] 

This figure is a multiple line graph. The vertical axis of the graph 
represents percent from 0 to 15. The horizontal axis of the graph 
represents four fiscal year quarters: FY 01, first and third quarters; 
FY 02 first and third quarters. Lines depict delinquency rates in three 
categories: HHS; Civilian agencies, excluding HHS; Governmentwide, 
excluding HHS. 

Source: GSA data. 

[End of figure] 

Paying travel card bills on time and, thus, maintaining low delinquency 
and write-off rates is important to the travel card program because 
banks that administer the program offer agencies incentives in the form 
of rebates. The GSA master contract requires the banks to pay a 
quarterly rebate to agencies and GSA related to card usage. The rebate 
to the agency is reduced, or eliminated, if significant numbers of an 
agency’s cardholders do not make timely payments. 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. Table 2 shows a comparison, based on the 
best available data, of the amount and percentage of write-offs since 
inception of the travel card contract on November 30, 1998, through 
August 2002 to total charges over a similar period for HHS, 
governmentwide excluding HHS, and other civilian agencies excluding 
HHS. [Footnote 8] 

Table 2: Write-offs of Travel Card Charges (Cumulative: fiscal years 
1999 through 2002): 

Agency: HHS; 
Travel card write-offs[A]: $885,534; 
Travel card charges[B]: $307,709,183; 
Write-offs as a percentage of charges: .288%. 

Agency: Governmentwide, excluding HHS; 
Travel card write-offs[A]: $79,732,485
Travel card charges[B]: $18,066,158,852
Write-offs as a percentage of charges: .441%. 

Agency: Civilian agencies, excluding HHS; 
Travel card write-offs[A]: $18,172,713; 
Travel card charges[B]: $5,976,032,608; 
Write-offs as a percentage of charges: .304%. 

Source: GSA data. 

[A] Amount of write-offs since inception of the travel card program in 
November 1998. 

[B] Amount of travel card charges for fiscal years 1999 through 2002 
(as of August). 

[End of table] 

The monitoring process that HHS has in place for its travel card program
has helped it achieve better-than-average travel card performance. HHS
designates program coordinators to monitor the travel card program in
each HHS component agency and take corrective or disciplinary action
when necessary. Each month, U.S. Bank sends reports to the department 
and to the component agencies. These reports contain information on
delinquencies and details on each cardholder’s travel card usage. The
department’s Office of Financial Policy also sends a monthly report 
that it prepares based on U.S. Bank data to each of the component agency
program coordinators, which summarizes data on delinquencies and 
writeoffs. The Office of Financial Policy includes messages with these 
reports reminding each component agency about the need to monitor the 
travel card program effectively. 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. One program coordinator told us he specifically 
looks for potential unauthorized or personal use by all cardholders by 
checking the location where transactions occurred (to detect purchases 
in the local area where employees work) and the name of merchants where 
transactions occurred. However, others only focused on delinquent 
cardholders. 

Program coordinators issue messages to all staff reminding them of their
responsibility to pay their travel card bills on time and that the card 
is to be used only for authorized expenses related to official travel. 
In addition, U.S. Bank staff, departmental staff, and component agency 
program coordinators participate in monthly conference calls to discuss 
issues related to travel card policy and identify areas where 
additional monitoring may be needed. 

As monitoring procedures have identified agency- or employee-specific
problems, component agencies have implemented corrective or 
disciplinary actions to address the problems. For example, at the
beginning of fiscal year 2002, IHS limited ATM withdrawals to $60 per 
day not to exceed $360 per week, from the prior limits of $300 per day 
not to exceed $600 per week. It also lowered the credit limit for most 
of its cardholders to $3,500 per month. The limits had been as high as 
$15,000. In addition, the IHS program coordinator sends letters to 
cardholders, their supervisors, and unit managers containing specific 
details of the problems and actions that can or will be taken. These 
additional controls may have contributed to the decrease in IHS’s 
delinquency rate from almost 11 percent at the end of fiscal year 2001 
to 3.8 percent in August 2002. 

CMS staff members told us of recent actions taken by CMS related to its
travel card program. CMS has designated a staff member to work full-time
on monitoring travel card use and delinquencies. They also told us that
CMS lowered the travel card monthly purchase limits to $7,500 from prior
limits that were as high as $25,000. 

HHS component agencies have also taken disciplinary action against
cardholders who become delinquent and in danger of having their accounts
canceled or written off and who use their travel cards for unauthorized
purposes. These actions range from verbally reprimanding employees to
canceling travel card accounts. Specific examples are discussed in the
next section. 

In addition to monitoring travel cards and taking action when problems 
arise, HHS staff members responsible for the travel card program told us
that low delinquency and write-off rates can also be attributed to the
demographics of its workforce. They told us that most HHS employees in
the component agencies we reviewed whose jobs require travel tend to be
mid- to higher-level workers who have many years of work experience and
higher rates of pay. An exception is IHS, which had the highest 
delinquency rates of the five component divisions we reviewed. 
[Footnote 9] According to IHS officials, its traveling workforce tends 
to be less experienced and lower paid than employees in the other 
component agencies. We found similar circumstances during our review of 
travel at the Army. [Footnote 10] We reported that most of the 
cardholders responsible for the Army’s high delinquency and write-off 
rates were young, low- and mid-level enlisted military personnel with 
relatively low incomes and little experience in handling personal 
finances. 

HHS continues developing plans to implement more controls over its 
travel card program. In June 2002, HHS established a remedial action 
plan for its travel card program in response to the Office of 
Management and Budget’s (OMB) request that all federal agencies develop 
remedial action plans to ensure the integrity of their travel card 
programs. In its plan, HHS listed some other controls it is 
implementing HHS-wide, including the following: 

* Adjusting spending limits—HHS will work with U.S. Bank to review
spending patterns of cardholders and to establish criteria for lowering
authorized spending limits. 

* Putting a message on billing statements—HHS will work with U.S. Bank
to use the billing statement message space to remind cardholders to file
timely vouchers and pay travel card bills on time. 

* Canceling cards that are used infrequently—Departmental management
will ask component agencies to consider deactivation, or cancellation,
of infrequently used travel cards. 

HHS has also established a goal for further reducing its delinquencies. 
In its letter to OMB, HHS noted that although it recognizes that there 
will always be some delinquencies, the department has established a 
goal of reducing its delinquency rate to 1 percent or less by September 
30, 2003. We agree that the delinquency rate should be minimal because 
the program is designed so that employees receive reimbursement for 
their travel expenses, which they are to use to pay their travel card 
bills. Implementing its planned actions and continuing its monitoring 
efforts will be key to HHS achieving this goal. 

Despite Monitoring Efforts, Unauthorized Use Still Occurs: 

Federal regulations, HHS policies, and the agreement a cardholder signs
with U.S. Bank when obtaining a travel card all state that the travel 
card may be used only for official travel-related expenses. For each of 
the five component agencies, we tested a random sample of 86 fiscal 
year 2001 travel card transactions (for a total of 430 transactions) to 
determine whether the transactions were for authorized purposes related 
to official government travel. At each of the five HHS components we 
reviewed, we found transactions that we characterized as unauthorized, 
either because we determined that they were for personal use or the 
component agencies were unable to provide approved travel orders or 
other documentation to demonstrate that the transactions were official 
travel expenses. Table 3 shows the estimate of unauthorized fiscal year 
2001 travel card transactions. [Footnote 11] 

Table 3: Estimate of Unauthorized Fiscal Year 2001 Travel Card 
Transactions: 

Component agency: CMS; 
Estimates of the percentage of unauthorized travel card 
transactions[A]: 17%. 

Component agency: FDA; 
Estimates of the percentage of unauthorized travel card 
transactions[A]: 17%. 

Component agency: IHS; 
Estimates of the percentage of unauthorized travel card 
transactions[A]: 22%. 

Component agency: NIH; 
Estimates of the percentage of unauthorized travel card 
transactions[A]: 19%. 

Component agency: OS; 
Estimates of the percentage of unauthorized travel card 
transactions[A]: 7%. 

Source: GAO analysis. 

[A] See app. I for confidence intervals associated with these 
estimates. 

[End of table] 

Unauthorized transactions we identified that were for personal use
included charges for lodging, meals, and ATM withdrawals unrelated to
official government travel. In some of these cases, cardholders 
indicated that they inadvertently used the travel card, rather than 
their personal credit card. For other transactions, the component 
agency provided documentation, such as a local travel voucher, that 
indicated the transaction was business related but was unauthorized. 
Table 4 shows the number of the unauthorized transactions (out of the 
86 tested at each component agency) we identified in the following 
categories: (1) personal, (2) business related but unauthorized, and 
(3) charges for which the component agencies did not provide us with 
adequate documentation to make such a determination. 

Table 4: Number and Category of Unauthorized Travel Card Transactions: 

Component agency: CMS; 
Category of unauthorized use: Personal use: 1; 
Category of unauthorized use: Business related: 2; 
Category of unauthorized use: Inadequate support: 12; 
Category of unauthorized use: Totals: 15. 

Component agency: FDA; 
Category of unauthorized use: Personal use: 1; 
Category of unauthorized use: Business related: 1; 
Category of unauthorized use: Inadequate support: 13; 
Category of unauthorized use: Totals: 15. 

Component agency: IHS; 
Category of unauthorized use: Personal use: 14; 
Category of unauthorized use: Business related: 0; 
Category of unauthorized use: Inadequate support: 5; 
Category of unauthorized use: Totals: 19. 

Component agency: NIH; 
Category of unauthorized use: Personal use: 10; 
Category of unauthorized use: Business related: 4; 
Category of unauthorized use: Inadequate support: 2; 
Category of unauthorized use: Totals: 16. 

Component agency: OS; 
Category of unauthorized use: Personal use: 3; 
Category of unauthorized use: Business related: 1; 
Category of unauthorized use: Inadequate support: 2; 
Category of unauthorized use: Totals: 6. 

Component agency: Total; 
Category of unauthorized use: Personal use: 29; 
Category of unauthorized use: Business related: 8; 
Category of unauthorized use: Inadequate support: 34; 
Category of unauthorized use: Totals: 71. 

Source: GAO analysis. 

[End of table] 

IHS had the marginally highest rate of unauthorized use, 19 of the 86
sampled transactions. We estimate that 22 percent [Footnote 12] of IHS 
travel card transactions for fiscal year 2001 were for unauthorized 
purposes. Most of the IHS unauthorized use was for personal purchases, 
such as gas and ATM charges, or purchases made while on local travel. 
In one of these cases, IHS told us that the employee was terminated in 
October 2001 for misuse of his travel card. In another case, IHS told 
us the card had been canceled, and in a third case, the employee had 
received a verbal reprimand for the personal transaction. In other 
cases, IHS told us the matter was referred to the cardholder’s 
administrative officer to determine action. 

At NIH, we found that 16 of the 86 sampled transactions we reviewed were
considered unauthorized use of the travel card. We estimate that 19
percent [Footnote 13] of the NIH travel card transactions for fiscal 
year 2001 were used for unauthorized purposes. Ten of the 16 
unauthorized transactions were for personal charges, including a charge 
at The Sports Authority. Four of the 16 were for business-related 
purposes, such as using the card for parking and registration fees for 
local meetings. This may indicate that some cardholders are not aware 
that these types of charges are unauthorized. 

At CMS and FDA, we estimate that 17 percent [Footnote 14] of travel 
card transactions for fiscal year 2001 at each component were for 
unauthorized purposes. These instances of unauthorized use mainly 
represent transactions for which the component agencies did not provide 
documentation to support that the transactions were authorized and for 
official travel or were unauthorized. 

At OS, we estimate that 7 percent [Footnote 15] of fiscal year 2001 
travel card transactions were unauthorized. We identified personal 
charges for gas and ATM withdrawals and one business-related 
transaction for parking at a meeting. 

In some cases, the component agencies had already identified
unauthorized transactions that were in our sample and had taken action,
and in other cases, the component agencies were not aware of the
unauthorized use until we brought it to their attention. For example, 
one of the transactions in our NIH sample was a personal purchase of 
gasoline. NIH provided documentation showing that the cardholder had 
several prior instances of personal use of the card and had been 
delinquent in paying his travel card bill. NIH canceled his travel card 
in June 2002, and the employee voluntarily resigned. For two other 
unauthorized transactions in our sample, NIH told us that the purchases 
were not identified until we started our review. NIH also told us that 
in June 2002, it sent a document containing the policy on proper use of 
the travel card to all cardholders who had to certify that they read 
and understood the rules. 

In addition to our assessment of unauthorized use, we took steps to
determine the potential impact that these instances of unauthorized use
had on the travel card program. Specifically, we determined whether the
employees responsible for the unauthorized use were late in paying their
bills or had their accounts written off. This is key because 
unauthorized use of the travel card by itself has no direct negative 
monetary affect on the government unless the cardholders do not pay 
their bills on time. Delinquencies and write-offs affect how the bank 
calculates the amount of an agency’s rebate. We reviewed U.S. Bank data 
for fiscal year 2001 to determine whether those cardholders in our 
sample whose transactions were personal, unauthorized, or undocumented 
paid their bills on time. Of the 71 unauthorized or undocumented 
transactions that we reviewed, 3 were made by cardholders who did not 
pay their bills timely and had their accounts written off. These 3 
write-offs totaled $13,446. 

While the majority of the cardholders in our samples who used their 
travel cards for unauthorized and personal purposes paid their bills 
timely, using the card for these purposes is against government 
regulations. Because HHS’s monitoring efforts focus on identifying 
delinquent accounts, they may not identify the majority of personal and 
other unauthorized use. Although HHS’s delinquency rates are 
comparatively low, left unchecked, personal and other unauthorized use 
of travel cards has the potential to increase delinquencies and write-
offs in the future. 

Controls over Travel Voucher Processing Could Be Improved: 

To assess whether controls over travel voucher processing were effective
in helping to ensure that travelers were not receiving reimbursements 
for unallowable expenses or in excess of proper travel expenses, 
[Footnote 16] we tested 349 travel vouchers [Footnote 17] related to 
the sample of travel card transactions we discussed earlier. While we 
did not find any cardholders who were reimbursed for outright 
unallowable expenses, we did find some errors that were not caught 
during the voucher review process, resulting in reimbursements that 
exceeded proper expenses. The two most common types of errors we 
identified were reimbursement for (1) per diem in excess of authorized 
amounts and (2) items such as telephone calls and hotel taxes that the 
hotel charged to the traveler, and then credited to the traveler’s 
account. We could not determine the validity of some reimbursements 
because the component agencies did not provide us with all the receipts 
supporting the reimbursement amounts. Without the proper supporting 
documentation, neither we nor the travel voucher reviewers can 
determine with certainty whether reimbursements of travel expenses are 
proper and correct. 

Table 5 shows the estimate of travel vouchers in which the reimbursement
amounts were in excess of proper travel expenses or were not properly
supported. 

Table 5: Estimate of Travel Vouchers Related to Fiscal Year 2001 Travel 
Card Transactions That Were in Excess of Proper Travel Expenses or Were 
Not Properly Supported: 

Component agency: CMS; 
Estimates of the percentage of travel vouchers that were overstated or 
were not properly supported[A]: 10%. 

Component agency: FDA; 
Estimates of the percentage of travel vouchers that were overstated or 
were not properly supported[A]: 13%. 

Component agency: IHS; 
Estimates of the percentage of travel vouchers that were overstated or 
were not properly supported[A]: 9%. 

Component agency: NIH; 
Estimates of the percentage of travel vouchers that were overstated or 
were not properly supported[A]: 10%. 

Component agency: OS; 
Estimates of the percentage of travel vouchers that were overstated or 
were not properly supported[A]: 6. 

Source: GAO analysis. 

[A] See app. I for confidence intervals associated with these 
estimates. 

[End of table] 

Table 6 gives a breakdown of the number of vouchers that we reviewed in
which the reimbursement amounts were in excess of proper travel
expenses or were not properly supported. 

Table 6: Number of Travel Vouchers Related to Fiscal Year 2001 Travel 
Card Transactions That Were in Excess of Proper Travel Expenses or Were 
Not Properly Supported: 

Component agency: CMS; 
Reimbursement exceeds proper expenses: 3; 
Not properly supported: 4; 
Totals: 7. 

Component agency: FDA; 
Reimbursement exceeds proper expenses: 2; 
Not properly supported: 7; 
Totals: 9. 

Component agency: IHS; 
Reimbursement exceeds proper expenses: 6; 
Not properly supported: 0; 
Totals: 6. 

Component agency: NIH; 
Reimbursement exceeds proper expenses: 6; 
Not properly supported: 1; 
Totals: 7. 

Component agency: OS; 
Reimbursement exceeds proper expenses: 3; 
Not properly supported: 2; 
Totals: 5. 

Component agency: Total; 
Reimbursement exceeds proper expenses: 20; 
Not properly supported: 14; 
Totals: 34. 

Source: GAO analysis. 

[End of table] 

As table 6 shows, the main reason for problems at FDA was poor record
retention. FDA did not provide sufficient documentation (mainly required
receipts for expenses like lodging and airfare) to determine whether the
reimbursements were proper. The most common type of problem that we
identified in testing vouchers for IHS and NIH was that per diem was
reimbursed for 1 day more than the number of days of actual travel or in
excess of authorized amounts. At IHS, three vouchers we tested included
reimbursement amounts totaling $95 related to excess per diem, and five 
NIH vouchers we tested included reimbursement amounts totaling $378
related to excess per diem. This situation should have been identified 
in the process, either by employees when they signed the vouchers before
submitting them for review, or by the reviewers before the vouchers were
paid. 

The problems we found in testing vouchers for CMS and OS were lack of
receipts and excess reimbursement for items such as telephone calls and
hotel taxes that the hotel charged to the traveler, and then credited 
to the traveler’s account. The amount of excess reimbursement by CMS 
for items credited to hotel bills was about $33 and the amount for OS 
was about $159. We also found that CMS improperly reimbursed about $12 
to a traveler for fees claimed on the voucher twice, and OS paid about 
$12 in excess per diem. 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. Reimbursing employees for amounts that exceed 
proper expenses potentially reduces the amount of travel funds 
available during the year for other important mission-related 
activities requiring travel. 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. 

Conclusions: 

HHS’s process for monitoring its travel card program has been effective 
in reducing delinquencies and write-offs. However, because the focus is
primarily on identifying and addressing existing delinquencies as 
opposed to preventing or detecting unauthorized use, unauthorized use 
is not always identified. Unchecked, unauthorized use could lead to 
increased delinquencies and write-offs, thus reducing the rebates HHS 
earns on its travel card program. In addition, while component agencies 
have controls over travel voucher processing, these controls were not 
always effective in ensuring that per diem amounts claimed were proper 
and that reimbursements did not include amounts for which travelers had 
received credits on their hotel bills. Also, weaknesses in controls 
related to record retention impede reviewers’ ability to ensure that 
travel voucher reimbursement amounts are proper and accurate. 

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. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, which are reprinted in
appendix II, HHS concurred with our recommendations and stated that it 
is working to implement them. According to HHS, some of the component
agencies we reviewed are taking, or have taken, various actions to
implement our recommendations. These actions should help to reduce
unauthorized and personal use of travel cards and help ensure that
travelers are not receiving reimbursement in excess of proper travel
expenses. We urge HHS to ensure that the recommendations are addressed
departmentwide. 

In separate technical comments, CMS took issue with three transactions
that we determined to be unauthorized because the agency did not provide
supporting documentation. As stated in our report, we characterized
certain transactions as unauthorized because we determined that they
either were for personal use or the component agencies did not provide 
us an approved travel order or other documentation to demonstrate that 
the transaction was an official travel expense. 

These three transactions did not have cardholder names associated with
them in U.S. Bank’s database. CMS stated that it could not provide
documentation to support the transactions without a traveler name, and
therefore, these transactions should not be considered errors. We 
disagree. 

We had several conversations with representatives from U.S. Bank about
the data. Based on other data elements in its database, U.S. Bank
representatives told us that they had determined the transactions were
made with travel cards issued to CMS employees. CMS and the bank were
both aware of the account numbers associated with these three
transactions and other transaction information such as the merchant name
and address and transaction date. This information would have provided
them an avenue to ascertain the cardholder names. 

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 7 days 
after its date. At that time, we will send copies to interested 
congressional committees, the Secretary of Health and Human Services, 
and the Director of the Office of Management and Budget. Copies will 
also be made available to others upon request. In addition, this report 
will be available at no charge on GAO’s Web site at [hyperlink, 
http://www.gao.gov]. 

Please contact me at (202) 512-9508 or by E-mail at calboml@gao.gov if 
you or your staff has any questions concerning this report. An 
additional GAO contact and staff acknowledgments are provided in 
appendix III. 

Sincerely yours, 

Signed by: 

Linda M. Calbom: 
Director, Financial Management and Assurance: 

[End of section] 

Appendix I: 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, 
writeoffs, 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. We selected five HHS component agencies to review based on 
the amount of travel card activity and delinquency rates in fiscal year 
2001. Table 7 shows the amounts of travel card activity for these 
component agencies in fiscal year 2001. These five component agencies, 
which incurred approximately 370,000 transactions in the amount of 
$48.8 million, covered nearly 70 percent of HHS’s travel card activity 
in fiscal year 2001. 

Table 7: Fiscal Year 2001 Travel Card Activity at HHS Component 
Agencies Selected for Review: 

Component agency: Centers for Medicare and Medicaid Services (CMS); 
Number of travel card transactions: 68,248; 
Dollar value of transactions: $9.0 million. 

Component agency: Food and Drug Administration (FDA); 
Number of travel card transactions: 83,552; 
Dollar value of transactions: $14.2 million. 

Component agency: Indian Health Service (IHS); 
Number of travel card transactions: 99,167; 
Dollar value of transactions: $7.6 million. 

Component agency: National Institutes of Health (NIH); 
Number of travel card transactions: 43,173; 
Dollar value of transactions: $7.6 million. 

Component agency: Office of the Secretary (OS); 
Number of travel card transactions: 75,700; 
Dollar value of transactions: $10.4 million. 

Source: U.S. Bank data provided by HHS. 

[End of table] 

To determine whether HHS has an effective process for monitoring its
travel card program to minimize delinquency rates, write-offs, and
unauthorized use of the card, we obtained an understanding of the travel
card program, both departmentwide and for the five individual component
agencies. We interviewed HHS staff members and officials and reviewed
HHS’s departmentwide and individual component agencies’ policies and
procedures to identify procedures for monitoring their travel card
programs. We also obtained data from the General Services Administration
on delinquency rates and write-offs and compared HHS to other federal
agencies. 

To determine the extent of unauthorized use of travel cards during 
fiscal year 2001, we tested random samples of travel card transactions 
from each of the five component agencies. To select the samples, we 
obtained (1) a database of HHS travel card transactions for fiscal year 
2001 from U.S. Bank, the contractor that administers the HHS travel 
card program, and (2) lists of fiscal year 2001 travel orders and 
vouchers from the five component agencies. We verified that the 
population of transactions in the database agreed with control totals 
for the number and amount of transactions provided by U.S. Bank. We 
were not able to verify the completeness of the lists of travel orders 
and vouchers. 

From the U.S. Bank data, we selected random samples of 86 travel card
transactions for each of the five component agencies, for a total of 430
transactions. Then, based on the date of the transactions and the dates 
of travel, we identified the travel order related to each transaction. 
We asked the component agencies to provide the travel order, travel 
voucher, and all documentation and receipts supporting the amount 
claimed on the travel voucher for each of the sampled transactions. 
Because we were not able to ensure that the lists of travel orders were 
complete, in cases where we could not identify a related order, we 
provided the component agencies with information on the transactions, 
including cardholders’ names and account numbers, merchant names and 
addresses, and dates of transaction, so that they could try to identify 
the related orders through other means. In some cases, the component 
agencies were able to locate the related travel orders and vouchers, 
and they provided the documents to us, or they provided us with 
documentation stating that the transactions were not for authorized 
expenses related to official travel. In other cases, the component 
agencies provided us with travel orders and vouchers, but we determined 
that they did not relate to the transactions, or the component agencies 
did not provide any documentation for some transactions. We concluded 
that a transaction was an authorized use of the travel card if there 
was an approved travel order related to the transaction. We concluded 
the transaction was unauthorized if (1) the component agency 
acknowledged unauthorized use, (2) the travel order we were provided 
did not relate to the transaction, or (3) we were not provided with any 
documentation. Table 8 shows the results of our tests, including the 
point estimates and the two-sided, 95 percent confidence intervals for
fiscal year 2001 travel card transactions that were unauthorized. 

Table 8: Estimates of Fiscal Year 2001 Unauthorized Travel Card 
Transactions: 

Component agency: CMS; 
Number of unauthorized transactions: 15 of 86; 
Estimate of percentage of unauthorized transactions: 17%; 
Confidence interval at a 95 percent confidence level: 10% to 27%. 

Component agency: FDA; 
Number of unauthorized transactions: 15 of 86; 
Estimate of percentage of unauthorized transactions: 17%; 
Confidence interval at a 95 percent confidence level: 10% to 27%. 

Component agency: IHS; 
Number of unauthorized transactions: 19 of 86; 
Estimate of percentage of unauthorized transactions: 22%; 
Confidence interval at a 95 percent confidence level: 14% to 32%. 

Component agency: NIH; 
Number of unauthorized transactions: 16 of 86; 
Estimate of percentage of unauthorized transactions: 19%; 
Confidence interval at a 95 percent confidence level: 11% to 29%. 

Component agency: OS; 
Number of unauthorized transactions: 6 of 86; 
Estimate of percentage of unauthorized transactions: 7%; 
Confidence interval at a 95 percent confidence level: 3% to 15%. 

Source: GAO analysis. 

[End of table] 

To determine the potential impact that the unauthorized transactions had
on the travel card program, [Footnote 18] we reviewed the U.S. Bank 
data and determined whether those cardholders who used their travel 
cards for unauthorized purposes paid their bills on time. Table 9 shows 
the number of cardholders with unauthorized transactions who were 
delinquent and who had their accounts written off during fiscal year 
2001. 

Table 9: Summary of Cardholders with Unauthorized Transactions Who Had 
Their Accounts Written Off during Fiscal Year 2001: 

Component agency: CMS; 
Number of unauthorized transactions (cardholders): 15; 
Number of cardholders who were delinquent: 5; 
Number of delinquent cardholders whose accounts were written off: 0; 
Total balances written off: [Empty]. 

Component agency: FDA; 
Number of unauthorized transactions (cardholders): 15; 
Number of cardholders who were delinquent: 4; 
Number of delinquent cardholders whose accounts were written off: 0; 
Total balances written off: [Empty]. 

Component agency: IHS; 
Number of unauthorized transactions (cardholders): 19; 
Number of cardholders who were delinquent: 12; 
Number of delinquent cardholders whose accounts were written off: 2; 
Total balances written off: $6,600.42. 

Component agency: NIH; 
Number of unauthorized transactions (cardholders): 16; 
Number of cardholders who were delinquent: 6; 
Number of delinquent cardholders whose accounts were written off: 1; 
Total balances written off: $6,845.23. 

Component agency: OS; 
Number of unauthorized transactions (cardholders): 6; 
Number of cardholders who were delinquent: 1; 
Number of delinquent cardholders whose accounts were written off: 0; 
Total balances written off: [Empty]. 

Component agency: Total; 
Number of unauthorized transactions (cardholders): 71; 
Number of cardholders who were delinquent: 28; 
Number of delinquent cardholders whose accounts were written off: 3; 
Total balances written off: $13,445.65. 

Source: GAO analysis of U.S. Bank data. 

To determine whether controls over travel voucher processing are 
effective in helping ensure that travelers are not receiving 
reimbursements in excess of proper travel expenses, we tested the 
travel voucher covering each of the authorized transactions in our 
samples to determine whether the reimbursement amount was properly 
supported and not overstated. For each voucher in the sample, we 
verified that correct per diem rates were used; verified that automated 
teller machine cash withdrawal fees were calculated correctly, ensured 
that the necessary receipts were attached and the correct amounts were 
claimed on the voucher, and verified that the calculations on the 
voucher were accurate. Table 10 shows the results of our tests, 
including the point estimates and the two-sided, 95 percent confidence 
intervals for fiscal year 2001 travel vouchers relating to
authorized travel card transactions. 

Table 10: Estimates of Travel Vouchers Relating to Fiscal Year 2001 
Travel Card Transactions That Were Not Properly Supported or Were 
Overstated: 

Component agency: CMS; 
Number of vouchers not properly supported or overstated: 7 of 67; 
Estimate of percentage of travel vouchers not properly supported or 
overstated: 10%; 
Confidence interval at a 95 percent confidence level: 4% to 20%. 

Component agency: FDA; 
Number of vouchers not properly supported or overstated: 9 of 70; 
Estimate of percentage of travel vouchers not properly supported or 
overstated: 13%; 
Confidence interval at a 95 percent confidence level: 6% to 23%. 

Component agency: IHS; 
Number of vouchers not properly supported or overstated: 6 of 67; 
Estimate of percentage of travel vouchers not properly supported or 
overstated: 9%; 
Confidence interval at a 95 percent confidence level: 3% to 19%. 

Component agency: NIH; 
Number of vouchers not properly supported or overstated: 7 of 67; 
Estimate of percentage of travel vouchers not properly supported or 
overstated: 10%; 
Confidence interval at a 95 percent confidence level: 4% to 20%. 

Component agency: OS; 
Number of vouchers not properly supported or overstated: 5 of 78; 
Estimate of percentage of travel vouchers not properly supported or 
overstated: 6%; 
Confidence interval at a 95 percent confidence level: 2% to 14%. 

Source: GAO analysis. 

[End of table] 

We conducted our work from May 2002 through November 2002 in
accordance with generally accepted government auditing standards. We
requested comments on a draft of this report from the Secretary of 
Health and Human Services or his designee. Written comments were 
received from HHS and are reprinted in appendix II. These written 
comments and separate technical comments we received are evaluated in 
the “Agency Comments and Our Evaluation” section near the end of our 
report. 

[End of section] 

Appendix II: Comments from the Department of Health and Human Services: 

Department of Health and Human Services: 
Office of the Inspector General: 
Washington, DC 20201: 

February 4, 2003: 

Ms. Linda M. Calbom: 
Director, Financial Management and Assurance: 
United States General Accounting Office: 
Washington, D.C. 20548: 

Dear Ms. Calbom: 

Enclosed are the department's comments on your draft report entitled, 
"Department of Health and Human Services: Controls Over Travel Program 
Are Generally Effective, But Some Improvements Are Needed." The 
comments represent the tentative position of the department and are 
subject to reevaluation when the final version of this report is 
received. 

The department also provided several technical comments directly to 
your staff. 

The department appreciates the opportunity to comment on this draft 
report before its publication. 

Sincerely, 

Signed by: 

Janet Rehnquist: 
Inspector General: 

Enclosure: 

[The Office of Inspector General (OIG) is transmitting the department's 
response to this draft report in our capacity as the department's 
designated focal point and coordinator for General Accounting Office 
reports. The OIG has not conducted an independent assessment of these 
comments and therefore expresses no opinion on them.] 

Comments of the Department of Health and Human Services on the General 
Accounting Office's Draft Report, "Department of Health and Human 
Services: Controls Over Travel Program Are Generally Effective, But 
Some Improvements Are Needed" (GAO-03-334): 

The Department of Health and Human Services (department) appreciates 
the opportunity to comment on this draft report. 

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 controls; 

* Require component agencies to issue an alert to voucher processing 
staff/reviewers reminding them to check vouchers for proper per diem 
amounts and amounts credited on hotel bills; 

* Require component agencies to 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. 

Department Response: 

The department concurs with these recommendations and is working to 
implement the GAO's recommendations. 

With regards to the first recommendation, the National Institutes of 
Health (NIH) plans to instruct their travel card coordinators to 
perform this sampling on a quarterly basis. The size of the sample will 
vary and assistance will be provided to the travel coordinators in 
determining an appropriate sample size. W hen the final GAO report is 
issued, NIH will summarize the recommendations and incorporate them 
into travel alerts. 

The Centers for Medicare and Medicaid Services (CMS) will work with 
U.S. Bank to develop specifications to generate a sample of travel card 
transactions. On a semiannual basis, CMS will try to match these 
transactions back to the travel orders and travel vouchers contained in 
its automated system. For those selected transactions, a review will be 
undertaken to determine if the travel reimbursements are proper 
according to Federal Travel Regulations (FTR) and existing policies and 
that all required receipts arc attached. 

With regards to the second and third recommendations, CMS plans to 
issue notices to travel approvers on an ongoing basis reminding them of 
their responsibilities when processing travel vouchers for 
reimbursements. These instructions will include an alert that vouchers 
be reviewed for proper per diem amounts and amounts credited on hotel 
bills. The instructions will also include the types of receipts that 
are required by FTR to support expenses claimed as well as length of 
time all receipts must be maintained to support amounts reimbursed. 

Also regarding the second and third recommendations, the Food and Drug 
Administration's (FDA) travel processes have changed significantly 
since fiscal year (FY) 2001, which was the year that the GAO reviewed 
for the audit. Since FY 2001, FDA has implemented an automated travel 
system, Travel Manager by Gelco, to process all FDA travel. Travel 
Manager obligates, authorizes, audits, and pays each voucher. In 
addition to the automated audit of every travel voucher to ensure 
compliance with the travel regulations and policies, FDA has developed 
a post-audit review that manually reviews a sufficient sample of all 
travel vouchers. Currently, Travel Manager has been implemented at 
approximately 50 percent of the agency. The FDA expects complete 
implementation of Travel Manager by the end of FY 2003. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Kimberly Brooks, (202) 512-9038: 

Acknowledgments: 

In addition to the contact named above, Sharon Byrd, Don Campbell,
Johnny Clark, Lisa Crye, Harold Fulk, Darren Goode, Kelly Lehr, Diane
Morris, Chanetta Reed, Taya Tasse, and Cynthia Teddleton made key
contributions to this report. 

[End of section] 

Footnotes: 

[1] U.S. General Accounting Office, Travel Cards: Control Weaknesses 
Leave Army Vulnerable to Potential Fraud and Abuse, GAO-02-863T 
(Washington, D.C.: July 17, 2002); Travel Cards: Control Weaknesses 
Leave Navy Vulnerable to Fraud and Abuse, GAO-03-148T (Washington, 
D.C.: Oct. 8, 2002); and Travel Cards: Control Weaknesses Leave Army
Vulnerable to Potential Fraud and Abuse, GAO-03-169 (Washington, D.C.: 
Oct. 11, 2002). 

[2] The amount of write-offs is for the period from the inception of 
the current travel card contract in November 1998 through August 2002. 
The total amount of travel card charges is for all of fiscal years 1999-
2001 and fiscal year 2002 through August. 

[3] See app. I for confidence intervals associated with these 
estimates. 

[4] Program coordinators are also called travel card coordinators, 
agency/organization program coordinators, and agency points of contact. 

[5] As we discuss later in this report, Centers for Medicare and 
Medicaid Services staff members told us that they have recently 
designated a staff member to work full-time on travel card monitoring. 

[6] An account is delinquent when it has a balance outstanding for 61 
or more days. The delinquency rate is the percentage of the travel card 
balances outstanding for 61 or more days. Under the terms of the 
cardholder’s agreement with U.S. Bank, payment of the travel card 
statement is due to U.S. Bank upon receipt. 

[7] The write-off rate is the total amount of unpaid travel card 
charges written off as a percentage of total travel card charges. 

[8] Governmentwide is defined as the 24 Chief Financial Officers Act 
agencies. However, the amounts of travel card charges for the Agency 
for International Development and the Office of Personnel Management 
were not available for fiscal year 1999, and Department of the Interior 
data were not available for fiscal year 2000 and Interior’s fiscal year 
2001 and 2002 amounts included amounts for some purchase card charges. 
We used cumulative write-off amounts because they were the best 
available data. 

[9] According to U.S. Bank data provided by HHS, at the end of fiscal 
year 2001, IHS’s delinquency rate was 11.6 percent while the rates for 
CMS, FDA, NIH, and OS ranged from 1.3 percent to 3.5 percent. 
Similarly, in August 2002, IHS’s delinquency rate was 3.8 percent and 
the other four component agency rates ranged from 1.5 percent to 2.9 
percent. 

[10] GAO-03-169. 

[11] For comparison, the estimate of the percentage of unauthorized use 
at four Army sites we reviewed and reported on earlier this year ranged 
from 15 percent at one site to 45 percent (at a 95 percent confidence 
level) at another site. At three Navy sites we reviewed and reported 
on, the estimate of unauthorized use ranged from 7 percent to over 26 
percent (at a 95 percent confidence level). 

[12] We are 95 percent confident that the actual percentage lies 
between 14 percent and 32 percent. 

[13] We are 95 percent confident that the actual percentage lies 
between 11 percent and 29 percent. 

[14] We are 95 percent confident that the actual percentage lies 
between 10 percent and 27 percent. 

[15] We are 95 percent confident that the actual percentage lies 
between 3 percent and 15 percent. 

[16] We found some underpayments but did not include them as errors. 

[17] The number of vouchers tested (349) is less than the number of 
transactions tested (430) because (1) there are no travel vouchers for 
the unauthorized transactions, (2) some authorized transactions, such 
as airfare, were charged, but then the trips were canceled so no 
vouchers were prepared, and (3) we did not receive complete copies of 
some vouchers from HHS, so we were not able to review them. 

[18] If cardholders do not pay their bills timely, the agency’s rebate 
amount can be reduced or eliminated. 

[End of section] 

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