Board Report: 2014-FMIC-B-009 June 30, 2014
We found that divisions were unable to provide accurate and complete documentation to support the conference-related expenses reported to the OIG. Additionally, we found that staff involved in planning conferences were unsure as to which division is responsible for retaining the supporting documentation. The Board’s Records Policy and Procedures Manual requires that the Board follow the NARA General Records Schedule regarding the retention of official procurement-related records. Additionally, the Board Records Retention and Disposition Schedule requires visitor services records to be retained for at least three years. The Federal Reserve Administration Manual, which is issued by the Board, directs Reserve Banks to maintain records on discretionary expenditures, including those for meetings and functions, in a manner suitable for review and for responding to inquiries from Congress. The Board does not provide the same level of detail, however, in its own record retention policy and schedule. The divisions’ inability to provide accurate and complete documentation to support conference-related expenses could impair the Board’s ability to accurately track and appropriately manage conference costs and could hinder its ability to accurately respond to oversight-related requests.
Divisions were unable to provide the OIG with all requested procurement and visitor services’ documentation for conferences with final payments made within three years of our request. Moreover, we found that divisions did not accurately report costs to the OIG for 24 of the 30 conferences. Specifically, in the information provided to the OIG, divisions underreported by $67,606 costs for 12 conferences and overreported by $65,140 costs for 12 conferences. For example, one division omitted $11,900 in mobile streaming expenses from conference costs. In another instance, one division reported $12,000 in honorarium expenses that were paid for by an external organization.
The Board follows the NARA General Records Schedule for retaining official procurement-related records. In accordance with the policy, records related to procurement for transactions at or below the simplified acquisition threshold of $50,000 should be retained for three years after final payment. Further, the Board’s Records Retention and Disposition Schedule requires visitor services records to be retained for at least three years. The Board’s schedule identifies documents that are considered visitor services records, which include scheduling memorandums, hotel accommodation documents, and lists of attendees. However, the Board’s Records Retention and Disposition Schedule does not specifically identify each division’s responsibility for retaining visitor services records. As a result, we found that divisions were uncertain which Board entities were responsible for retaining official documentation. Board divisions referred to various sections of the Board as the responsible entity: (1) the division initiating and hosting the event; (2) the Procurement section, which is responsible for the procurement of goods and services exceeding $5,000; or (3) Visitor Services, which may provide support to divisions hosting conferences. The divisions stated that they were unable to provide complete documentation for a variety of reasons, such as records not having been maintained following an employee’s separation from the Board, and food and beverage forms not having been submitted.
The Board has underscored to the Reserve Banks the importance of recordkeeping and the responsibility for retaining documentation by establishing guidelines in the Federal Reserve Administration Manual. The manual requires Reserve Banks to maintain records for meetings and functions in a manner suitable for review and for responding to inquiries from Congress. In addition, the manual specifies that if a Reserve Bank hosts an event in the facility of another Reserve Bank, the governing administrative policies will be those of the Bank at which the event is held. Further, the Board requires the sponsoring Reserve Bank to retain all appropriate expense documentation. However, the Board does not provide the same level of detail in its own record retention policy and schedule.
We recommend that the Secretary of the Board
The Secretary of the Board concurs with this recommendation. In his response, the Secretary of the Board stated that the Office of the Secretary has prepared additional guidance for divisions on managing event-planning records and intends to use feedback from the divisions to take additional steps to implement the recommendation.
We believe that the actions described by the Office of the Secretary are responsive to our recommendation. The OIG intends to follow up on the Office of the Secretary’s actions to ensure that this recommendation is fully addressed.
