The U.S. House of Representatives Committee on Oversight and Government Reform during a hearing last week blasted the Internal Revenue Service for excessive spending on a 2010 conference in Anaheim.
The furor over that event, including a now-infamous Star Trek parody training video, echoes criticism of a controversial General Service Administration conference held the same year that ultimately led to GSA administrator Martha Johnson's resignation.
Acting IRS commissioner Danny Werfel, on the job only since May 22 when he replaced Steve Miller, who was ousted the wake of an unrelated IRS scandal, told the committee that he is out to change the culture of the agency.
He also explained that IRS "travel and training expenses have dropped more than 80 percent since 2010." That reduction coincides with the larger government-wide effort to reduce travel expenses.
During opening remarks, committee chairman Rep. Darrell Issa (R-Calif.) called the 2010 conference "maliciously self-indulgent." Rep. John Mica (R-Fla.) said that "the IRS has taken government arrogance and wasteful spending to an absolutely incredible level."
The event is being scrutinized because at a cost reported by the IRS of $4.1 million, it was the most expensive held by the agency during fiscal years 2010 through 2012.
According to an audit by the U.S. Treasury Inspector General for Tax Administration, the total cost likely was higher partly because employee travel expenses totaled more than the $3,752,000 reported by IRS Small Business/Self-Employed Division management.
"We could not obtain reasonable assurance that this amount represents a full and accurate accounting of the conference costs," according to the TIGTA report. "Although IRS management established an internal tracking code for employees to charge their conference travel, we determined that this code was not always used as required."
According to inspector general J. Russell George's testimony, presented during the hearing, "by reviewing travel voucher documentation, we determined that IRS management understated the cost for all employees' travel by approximately $93,000. The lack of adequate tracking of costs may be due to the lack of a requirement that IRS management track and report actual conference costs."
That audit also found that employees spent more than $50,000 producing the Star Trek training video and another during which attendees learned the "Cupid Shuffle" dance.
IRS spent another $135,000 on speakers and $64,000 on such attendee giveaways as leather bags and plastic squirting fish, cited repeatedly by committee members as examples of frivolous expenditures.
Though the IRS has been criticized for allowing employees attending the event to stay in hotel suites, George explained that deals struck with Anaheim hotels included room upgrades at no extra charge.
"As part of its agreement with the Anaheim hotels, the IRS received certain concessions including several food and beverage requests," according to his prepared testimony. "This included a welcome reception with food and cocktails, daily continental breakfast, as well as beverages and snacks during morning and afternoon breaks. We believe the IRS may have been able to negotiate with the hotels to get a reduced room rate if some of these services were not included and event planners were not used. Additionally, a substantial number of IRS employees received hotel room upgrades. As part of the agreement signed with the hotels, the IRS received up to 132 upgraded rooms each night, as well as 10 free rooms. As part of the agreement, the hotels charged the IRS the federal government rate of $135 per night for paid rooms including suites."
"However," he added, "the solicitation and use of hotel room upgrades increases the perception of wasteful spending and should be carefully considered in the future."
'No swag' On Werfel's watch
Changes already are underway. According to George's testimony, IRS conference spending "has gone from approximately $38 million in FY 2010, to approximately $6 million in FY 2011 and $5 million in FY 2012.
The IRS attributes this reduction in spending in part to enhanced controls" including "a number of policy and guidance documents to minimize spending on travel and conferences" that were issued in February 2011.
He added that the IRS in November 2011 "issued guidance to further reduce all travel and training by 10 percent; and in December 2011, the IRS established new procedures requiring Deputy Commissioner approval of conference-related activities."
Additional event spending guidance came from the IRS CFO in March 2012.
"I believe the procedures issued since the Anaheim conference occurred will help to ensure that some of the questionable expenses we identified do not happen again," he added. "However, notwithstanding these recent actions, we identified additional improvements needed."
In his testimony, Werfel noted that "sweeping new spending restrictions have been put in place at the IRS, and similar large-scale meetings did not take place in 2011, 2012 or 2013. ... The IRS has taken bold steps to ensure travel and conference spending is appropriate, limited, and undergoes a thorough review and approval process."
He specified that "training travel alone has been reduced by $83 million in the last two fiscal years," owing partly to remote conferencing alternatives. "We are conducting a review of travel expenses and are considering the potential for further reductions."
Werfel told the committee that he plans to ensure transparency and prudent fiscal planning, track spending and eliminate unnecessary spending and frivolous items. "I don't want any swag purchased at the IRS while I'm commissioner," he said.
ASAE Center for Association Leadership president and CEO John Graham told BTN that he had spoken with Werfel and they agreed on the importance of conference participation.
"We're human beings, we like interaction," Graham said, adding that budget cuts have "put a cloud over federal employees participating in conferences."
To help resolve that issue, ASAE earlier this year worked with the Office of Management and Budget on guidelines allowing federal employees to attend association conferences without exceeding budgets.
U.S. Travel Association president and CEO Roger Dow urged caution.
"It is incumbent on our leaders to not lose sight of the value that responsible travel and face-to-face meetings create for constituents," according to his statement. "It is often the most efficient and effective way for government professionals to accomplish the requirements of their roles."
The TIGTA audit of the Anaheim conference came not long after a separate TIGTA report detailed misuse of the IRS travel card program, which in fiscal year 2011 had 52,000 individually billed government-issued accounts and $121 million in related charges.
That report found that the IRS failed to use "aggressive steps" to address such misuse. TIGTA's report indicated that IRS management agreed to implement a series of recommended corrective actions.
Source: Business Travel News