Exceptions to travel regulation requirements were noted
No detailed written marketing plan or budget to support charges
Personal use of government charge card
Authority has established additional controls
The business purpose of an Authority event was not clear
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FINDINGS, CONCLUSIONS, AND
RECOMMENDATIONS
INADEQUATE CONTROL OVER CERTAIN TRAVEL EXPENSES
The Illinois Development Finance Authority (IDFA) did not have adequate controls
over certain employee expenses charged to travel. Under the State Finance Act, the
Authority is required to follow the travel reimbursement guidelines established by the
Governor’s Travel Control Board.
The Authority states that it finds it essential to conduct business meetings and
generate contacts in an environment that is generally accepted by the financial community.
Such meetings are often conducted outside of the office at luncheons or dinners. As a
result, certain expenditures were incurred that the Authority believes fall outside of the
travel reimbursement guidelines. However, the Authority did not request exceptions to the
rules for these expenditures, and policies of the Board did not support the manner in
which these expenditures were approved and reimbursed.
During our audit, we tested all travel vouchers and travel-related credit card charges
for one employee for Fiscal Year 1998. We noted the following exceptions:
- There were no receipts for expenditures totaling $7,083 charged to a credit card and on
reimbursement reports. Receipts are required for expenses exceeding $10. While the
Authority agreed that actual, carbon copy receipts were not always attached, IDFA
maintained that it has photocopies of all credit card charges sufficient to demonstrate
full accountability for its business and marketing expenses.
- Meals totaling $3,321 charged on a credit card and meals totaling approximately $1,939
charged to a private club did not always list the business purpose of the meeting or the
person in attendance. IDFA agreed that it did not always include the business purpose and
persons in attendance on the prescribed travel forms, but responded that sufficient
documentation in other acceptable accounting formats is available to demonstrate full
accountability.
However, we were not furnished the additional documentation in other formats referred to
in the Authority’s response, and regardless of such other documentation, the failure
to list the business purpose of the meeting or the person in attendance at the meal is a
clear violation of the travel regulations and/or good business practices.
- There were 28 instances in which per diem was claimed in addition to meals charged on
credit cards. IDFA stated that it contests the implication that because IDFA has a
marketing expense budget, it has somehow deliberately double billed for meals. IDFA agreed
that a few clerical errors were made; however, IDFA noted that a complete analysis of the
expense reports submitted by the employee has been completed and the employee, according
to audit review, did not receive $263 to which the employee was entitled. At this point, a
full reconciliation has been made and no amounts are due to/from the employee.
Nevertheless, we stand by our finding. In 28 instances, meals were charged on credit cards
in addition to per diem being charged. This constitutes double billing. Further, the
Authority did not produce a written detailed marketing plan or an approved detailed
marketing budget to support the specific credit card charges in question.
- Meals totaling $180 for State employees and officers which were not reimbursable under
travel regulations were charged on a credit card. IDFA agreed that the expenses were
incurred; however, they state they were marketing expenses, not travel expenses subject to
the travel guidelines. IDFA stated it has appropriated funds for marketing expenses to
enable its employees to conduct meetings with professionals at luncheons and dinners when
the purpose of such meetings is related to official IDFA business.
- Charges for Friday night stays at employee-owned lodging in Springfield totaling $300
were not adequately supported. IDFA indicated that the employee worked on Saturday and
they provided documentation intended to support the business purpose of the Friday night
stays as necessary to conduct official business.
In fact, the itineraries provided for review did not indicate that the employee worked on
Saturday. Also, the Authority did not provide any additional information to support that
the employee worked on Saturday, and per diem was not claimed for the time claimed to be
worked on Saturday.
- On one occasion, the Authority was charged $74 for a "no show" at a hotel.
Travel regulations do not allow for room guarantee charges. IDFA agreed that this was a
clerical error.
- The Governor’s Travel Control Board states that a government charge card may only
be used for business related travel expenses, but there were personal charges on the
government credit card. However, the Authority did not reimburse the employee for personal
charges. To avoid this problem in the future, IDFA stated it has canceled its government
charge card.
We recommended the Authority comply with the travel regulations of the Travel
Regulation Council and the Governor’s Travel Control Board and reimburse only those
travel expenses that are allowable, adequately supported, reasonable, and necessary.
Exceptions to specific provisions of the travel regulations should be requested and
approved in advance from the Travel Control Board. Further, marketing expenses should
comply with good business practices by being supported with adequate documentation of the
purpose of the expenditures. (Finding 98-1, pages 15-20)
In its response the Authority points out that it has statutory authorization to
establish its own budget for allowable expenditures. The Authority states that it has
established additional controls and that it has revised its reimbursement forms to include
the business purpose of meetings, names of persons in attendance, and certification that
the expenditure does not cover alcoholic beverages. Separate forms are being established
for marketing and travel expenditures. Also, the Governor’s Travel Control Board has
been contacted for a review of the Authority’s procedures.
PAYMENT OF QUESTIONABLE EXPENDITURES
The Authority paid various expenses totaling $3,058 for an event held in Southern
Illinois to honor a senior Authority employee who was leaving the Authority after 25 years
of employment.
Travel expenses totaling $1,368 were reimbursed to 12 employees. Related expenses for
the event totaling $1,393 were paid by the Authority for car rentals, a band, room rental,
and food for attendees. In addition, the Authority paid $297 towards the purchase of a
watch for the retiring employee. The State Finance Act states that all reimbursed travel
expenses must be defined for a valid business purpose. The business purpose associated
with this event is unclear. (Finding 98-2, page 20)
We recommended the Authority adhere to the State’s requirements for reimbursement
of only travel expenses and related expenses that are business related.
The Authority disagreed with the finding and stated that it believed the
business/marketing purpose of this meeting was clear. The Authority agreed that as part of
this event an employee was honored for his 25 years of service to the Authority, but the
Authority stated it authorized the event and payments of related costs as a marketing
opportunity for the Authority to meet and discuss financing services with a large and
targeted audience in Southern Illinois.
OTHER FINDINGS
The remaining findings are less significant and are being given appropriate
attention by the Authority. We will review progress toward implementing these
recommendations in our next compliance audit. The responses were provided by the
Authority’s Executive Director, Mr. Bobby J. Wilkerson.
AUDITORS’ OPINION
Our auditors state the June 30, 1998 financial statements of the Authority are
fairly presented.
___________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KMM:pp
SPECIAL ASSISTANT AUDITORS
KPMG Peat Marwick, LLP were our special assistant auditors for this audit. |
