Office of Audit
UNDERCOVER TRAVEL EXPENSES WERE GENERALLY SUPPORTED;
HOWEVER, CONTROLS COULD BE IMPROVED
Final Report issued on May 15, 2020
Highlights of Reference Number:† 2020-10-030 to the Commissioner of Internal Revenue.
IMPACT ON TAXPAYERS
In performing the law enforcement mission of the IRS, Criminal Investigation (CI) performs various undercover operations.† In Fiscal Year 2018, the IRS spent more than $1.3 million through imprest (cash) funds on undercover confidential operations, including associated travel costs.† It is critical that CI maintains proper oversight over imprest funds in order to promote the economic and efficient use of publicly funded resources and prevent improper payments.
WHY TIGTA DID THE AUDIT
This audit was initiated to determine whether CIís use of imprest funds for confidential travel expenses supporting undercover operations complies with IRS, Department of the Treasury, and Federal financial and travel policies.
WHAT TIGTA FOUND
CIís undercover travel expenses were generally supported by adequate documentation based on our review of 49 Fiscal Year 2018 vouchers that included undercover travel expenditures.
However, controls over undercover travel expenditures and the CI investigative imprest fund could be enhanced in several key areas.† Specifically, CI procedures do not require advance approval for hotel rooms exceeding per diem and the use of luxury rental cars. †During our review of CIís undercover confidential travel expenses, TIGTA determined that 33 (67 percent) of the 49 vouchers reviewed had one or more instances of agents renting hotel rooms with costs in excess of the General Services Administration limits.† TIGTA also identified the use of luxury vehicles without documented management approval.
In addition, 26 (53 percent) of 49 vouchers reviewed were supported by travel receipts for which the travel reservations contained the agentsí actual names and, in some cases, indicated that the agents were Government employees or that the travel was Government related. †This practice raises concerns that either agent safety was potentially compromised or the imprest fund may have been used unnecessarily.† Finally, quarterly audits of CI imprest funds were not always staffed to maximize independence, and as a result, the effectiveness of these reviews was compromised.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the Chief, CI: †1) require managementís approval for reserving hotel rooms exceeding the applicable temporary duty location rate and the use of luxury vehicles, and require agents to include managementís prior approval in their travel voucher documentation, and 2) periodically assess undercover travel on a function-wide basis to identify potential areas for improved efficiency, to identify best practices to ensure agentsí safety, and to ensure that the investigative imprest fund is only used when needed to maintain the security of undercover operations.
TIGTA also recommended that the Commissioner, Small Business/Self-Employed Division, clarify internal guidance to ensure that the audit team assigned to perform CI imprest fund audits rotates assignments in a way that maximizes independence.
IRS management agreed with the recommendations and has taken or plans to take corrective actions.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number ††/† 202-622-6500
E-mail Address †/† TIGTACommunications@tigta.treas.gov
Website†††††† ††††††/† https://www.treasury.gov/tigta