Federal workers misuse travel charge cards

Thousands of federal workers are paying their government travel bills late, and a handful are using their government travel charge cards to pay for personal items and trips, federal officials told lawmakers Tuesday. The 1998 Travel and Transportation Reform Act ordered the General Services Administration to require federal employees to use government charge cards, instead of personal credit cards, for travel expenses. Ideally the law would allow agencies to take advantage of rebates offered by charge card companies, officials said at a House hearing. The more the government uses travel charge cards, the more money agencies can earn back in rebates. But, while employees are using the government cards, they're not always using them correctly. "Lagging agency oversight and employee misuse of the travel card program is not allowing the government to maximize this potential savings," said Rep. Stephen Horn, R-Calif., chairman of the House Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations. In fiscal 2000, federal employees and agencies put $4.7 billion in travel expenses on government charge cards. Agencies can earn millions of dollars in rebates when they pay their bills early and electronically. In most cases, agencies reimburse employees for travel expenses and then the employees pay the bills. Officials from the General Services Administration testified that as of March, federal employees were delinquent in paying more than $25 million on their travel card accounts. Federal agencies were delinquent in repaying more than $12 million in travel expenses for which they are responsible. During an investigation of travel charge card misuse at the Corporation for National and Community Service, eight employees admitted to using their cards for improper expenses, such as a hotel room in another state for family members, a family vacation, medicine for a parent and personal gifts. One employee put about $22,442 in personal charges on his government charge card. The corporation dismissed two of its employees. Two other employee dismissals are pending, one employee resigned, one employee retired, one employee got a letter of counseling and one employee received verbal counseling. Corporation IG Alan Boehm testified that several factors contributed to misuse of the travel cards, including giving cards to employees who don't travel and not reviewing travel card expenses. At the Defense Department, 40,000 workers have defaulted on more than $53 million in travel expenses, according to Clifford Skelton, an executive at Bank of America. "I am most concerned by a department whose culture is defined by discipline … and there is more than $50 million in defaults," Rep. Adam Putnam, R-Fla. said. Defense Finance and Accounting Service Director Jerry Hinton told committee members that his agency had recently worked out an agreement with Bank of America to regain control of the situation. The new plan includes increased attention from agency management, deactivating infrequently used cards, garnishing salaries for accounts more than 120 days past due, establishing direct payment systems to the bank, reducing credit limits on individual cards and increasing late and returned check fees. "We're trying to be proactive," Hinton testified. "We want to give them as much help as we can." But federal officials' interpretation of the reconciliation rule is the main cause of much of the back debt, Skelton said. Rather than pay bills as they come due and then reconcile their records, most agencies insist upon reconciling their records before sending payment to the bank. This causes delinquent balances to grow. "The bottom line is, we need accountability in the federal government in regard to travel policy," Skelton said.