Senate Finance Committee Report – A Review of IRS Travel – December 14, 2016

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Senate Finance Committee Report – A Review of IRS Travel – December 14, 2016

CFEG reports that on December 14, 2016 the Senate Finance Committee (“the Committee) issued a Majority Staff Report titled, “A Review of IRS Travel.” The complete report may be found by clicking the link below. CFEG will highlight some of the Committee’s findings.

The Committee has an obligation to conduct oversight of all agencies within its jurisdiction, including their use of taxpayer funds. The Committee found that some of the IRS employees appeared to be incurring unusually high travel costs while on long-term travel. In September 2016, these initial findings led the Committee to again write to the IRS to ask for all supporting travel documentation for all trips taken in Fiscal Year (“FY”) 2015 by 15 of these employees to better understand the drivers of these unusually high costs.

The Committee found that the IRS has not routinely taken the steps allowable to reduce its travel related per diem expenditures. Despite having instituted internal guidance limiting executive travel and realigning executive posts of duty (“PODs”) in FY 2013, the Committee found evidence that some IRS executives are still not geographically located where their primary job duties are.

The Committee found that if the IRS would simply follow its own internal guidance without exception and institute best practices from other agencies, it could see significant cost savings among all employees who travel for significant amounts of time during the year, not just those traveling for more than half of the year.

In FY 2015, the IRS had 27 employees who traveled 125 business days or more at a total cost of over $1.4 million. The average cost of each trip was approximately $52,800 with an average trip length of 207 days.

The Committee reported that Federal employees traveling to Washington for a month can spend up to $7,099 per month on lodging alone. However, the Committee concluded that there is no  sees circumstance where an employee living in Washington on a month by month basis would ever need to spend $7,099 per month on rent. The Committee found based on its research that lodging selected by these IRS employees often appeared to be excessive and inappropriate. The lodging accommodations sought by the 15 IRS employees were broken into three distinct groups:  employees who lived in hotels, those who rented apartments or homes, and those who lived in corporate or extended stay housing (henceforth referred to as “extended stay housing”).

For example, one employee spent 168 days in FY 2015 at the Grand Hyatt in Washington at a total cost to taxpayers of $38,799.12. Another employee moved among several hotels in the Washington area before primarily residing at the Ritz Carlton – Pentagon City in Virginia. The employee’s hotel bills for the fiscal year totaled $72,544, $43,726 of which was for the Ritz Carlton – Pentagon City.

For example, one IRS employee rented a $1.07 million, four bedroom townhouse in Arlington, VA for a year at a rate of $4,950 per month. The other employee completed two separate details in Washington and then in Chicago, renting what appear to be luxury apartments in both cities. For example, while in Washington, the employee signed a nine-month apartment lease at a new apartment complex in downtown Washington at a rate of $3,110 per month. The employee then obtained an 11-month lease in a similar style apartment building located in downtown Chicago, overlooking the Chicago River at a rate of $4,605 per month.

In another example, the Committee found that an IRS employee on detail to Washington lived in Arlington, VA at an Oakwood ExecuStay property for six and a half months. The employee was charged on a daily rate equal to the maximum allowable per diem amount instead of seeking a discount for six and a half months of continuous housing. The employee’s rent amounts ranged from $4,956 per month to $7,099 per month. The total cost of the IRS employee’s six and a half month stay in Arlington was $39,871.

The Committee concluded that the IRS travel policies as well as the actual long-term travel habits of some of its employees have led to a number of troubling findings. The Committee found that a number of employees who travel more than half of the year and the cost at which they do so is simply unacceptable. The Committee found that the IRS has the tools within its grasp to significantly reduce travel per diem rates and yet it elects not to do so. The Committee also found that the IRS must also better emphasize the personal responsibility of each and every IRS employee to spend taxpayer funds as they would their own. The Committee saw far too many examples of “excess costs resulting from … luxury accommodations or services unnecessary or unjustified in the performance of official business” on the part of IRS employees during the course of this review, a direct violation of FTR Section 301-2.4.

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Categories: Fraud, Waste and Abuse

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