Watchdog raps Homeland Security for conference fees

The Homeland Security Department improperly collected more than $200,000 in conference fees between 2005 and 2007 and now must return those funds to the Treasury, according to a new report from the inspector general.

The report found that DHS had violated the federal Miscellaneous Receipts Statute by improperly collecting $211,000 in fees from its annual Process Control Systems Forum -- a conference focused on strengthening the nation's computer systems -- and then failing to remit those funds to the Treasury as required.

The watchdog determined, however, that DHS had not violated the 1870 Anti-Deficiency Act because there are enough appropriated funds available from the department's budget to reimburse the Treasury.

During the three-year period, the Homeland Security Advanced Research Projects Agency hired a private contractor to collect fees from nonfederal conference attendees to defray costs related to hotel charges, food and refreshments.

"While there are some instances in which an event planner may retain personal convenience fees from conference attendees for meals and not violate the Miscellaneous Receipts Statute, that is not the case here," the IG said. "The contractor did not collect the fees for its own use, but on behalf of the government. Without specific statutory authority, neither DHS nor the contractor acting on its behalf was permitted to collect conference fees from its attendees to defray the official costs of conferences."

DHS eventually received authority to collect conference fees though a provision in the department's fiscal 2010 appropriations. Fees must be credited to the appropriation or account from which the costs of the conference are paid. When the amount of fees collected exceeds actual costs, the excess amount must be returned to taxpayers.

The officials responsible for planning the forum between 2005 and 2007 are no longer with the department. But officials now responsible for organizing the conference told investigators that the previous managers might not have been aware of the statutory violation, the report said. Nonetheless, the department agreed with the IG's findings and pledged to return the funds to the Treasury.

Rep. Bennie Thompson, D-Miss., chairman of the House Homeland Security Committee, said the report indicates that the department's financial management system still lacks proper oversight of its travel practices.

The IG told the Homeland Security Subcommittee on Management, Investigations and Oversight during a December 2009 hearing that the department spent more than $110 million on conference-related activities from fiscal 2005 through fiscal 2007. Data on conference spending did not contain sufficient supporting documentation and was "unreliable, unverifiable and provided little assurance that all conference and related costs were tracked and accounted for properly," the 2009 report said.

Homeland Security's chief financial officer issued a departmentwide policy on employee travel expenses and conference planning in October 2008. But Thompson wants the department to do more.

"Taken together, this report and our hearings reveal an overarching need for the department to improve its financial management practices and develop a centralized system to ensure that travel and conferences -- which are often necessary parts of employee development and stakeholder outreach -- are properly used by employees and properly budgeted by management," Thompson said. "In December, the inspector general recommended a centralized system, and the department must take steps to create such a system. We look forward to the creation -- in the near term -- of a centralized and accountable travel and conference office."