TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION

Office of Audit

Highlights

International Travel Claims with Unallowable OR Unsupported Expenses
Were Certified for Payment by Approving Officials

Final Report issued on June 10, 2019

Highlights of Reference Number:  2019-10-015 to the Commissioner of Internal Revenue.

IMPACT ON TAXPAYERS

The IRS spent nearly $5 million associated with almost 1,600 international travel claims during Fiscal Years 2016 and 2017.  IRS employees travel internationally to secure records for tax cases, to meet with foreign officials on tax matters, and to participate in conferences.  Inappropriate travel expenditures do not promote economic and efficient use of publicly funded resources and put the IRS at risk of making improper payments.

WHY TIGTA DID THE AUDIT

The overall objective of this review was to assess the effectiveness of controls over employee international travel claims for the period October 1, 2015, through September 30, 2017.

WHAT TIGTA FOUND

TIGTA’s review of a statistically valid sample of 106 employee international travel claims, and an additional nine claims with a value of $10,000 or more, identified certain control weaknesses in IRS travel programs.  Specifically, IRS officials approved travel vouchers and certified employee reimbursement for unallowable or unsupported expenses.

TIGTA identified unallowable expenses for 20 (17 percent) of the 115 claims examined.  These claims included employee use of business class airfare upgrades without proper justification, expenses claimed in excess of allowable limits, and claims for certain miscellaneous expenses (e.g. dining charges to entertain a foreign official and traveler vaccinations).  Based on the sample results, TIGTA estimates that the IRS reimbursed employees for almost $36,000 in unallowable expenses during Fiscal Years 2016 and 2017.

Using the same sample, TIGTA identified that the approving officials certified claims for reimbursement without complete supporting documentation for 25 (22 percent) of the 115 international travel claims.  While the IRS was subsequently able to locate adequate support for all but one travel claim, it did not have the documentation for approximately $34,000 in expenses at the time the claims were certified for reimbursement.

In addition, TIGTA found that 20 (17 percent) of the 115 claims reviewed, representing nearly $910,000 in international travel, did not include a complete Form 1321, Authorization for Official Travel, with all required approval signatures.  These forms are required to be completed prior to official travel to ensure that travelers have managerial authorization to perform international travel, funds are available for the travel, and required travel documents, such as passports, have been obtained.

WHAT TIGTA RECOMMENDED

TIGTA made eight recommendations to strengthen IRS international travel controls, including enhancing travel policies and procedures, pursuing collection of amounts TIGTA identified that were reimbursed to employees in excess of allowable travel claims, and issuing a memorandum to travelers and approving officials reemphasizing that Form 1321 must be completed prior to embarking on international travel.

IRS management agreed with TIGTA’s recommendations and indicated it has taken several actions to improve its international travel policies and procedures that include establishing an inventory of international travel requests received by the International Travel Office to ensure all requests and Form 1321’s are processed timely.  Also, the IRS provided that its business class travel review processes are also being strengthened.

READ THE FULL REPORT

To view the report, including the scope, methodology, and full IRS response, go to:

https://www.treasury.gov/tigta/auditreports/2019reports/201910015fr.pdf.

 

Phone Number   /  202-622-6500

E-mail Address  /  TIGTACommunications@tigta.treas.gov

Website             /  https://www.treasury.gov/tigta