The Board Should Enhance Its Policies and Procedures Related to Conference Activities

Introduction

Objectives

The Office of Inspector General (OIG) conducted an evaluation of the Board of Governors of the Federal Reserve System’s (Board) conference activities.¹ Our objectives were to review the Board’s policies and procedures to determine the requirements for Board-sponsored conference activities and to assess the Board’s compliance with the relevant requirements.

We initiated this evaluation, in part, to determine whether the Board experienced challenges similar to the issues outlined in the U.S. General Services Administration (GSA) OIG’s 2012 Western Region’s Conference management deficiency report.² The GSA’s 2012 report, which resulted in significant congressional and public scrutiny of GSA’s conference spending, found that the agency’s spending on conference planning was “excessive, wasteful, and in some cases impermissible.”

Because the Board does not have agency-wide policies and procedures specific to conference planning, our evaluation focused on policies and procedures that guide Board divisions engaged in such activities. To accomplish our objectives, we reviewed the Board’s Official Meals Expenses Policy, Acquisition Policy, Records Policy and Procedures Manual and the Procurement section’s Procurement Procedures to identify risks and corresponding controls. To gain detailed knowledge of the Board’s conference-related activities, we interviewed staff involved in coordinating conferences for the various Board divisions that held conferences. We performed detailed transaction testing to assess the effectiveness of controls, the accuracy of costs reported, and compliance with conference-related policies. The scope of our evaluation covered the period from January 1, 2010, to June 30, 2012, and included 728 conferences totaling $1,922,427. For additional information regarding our scope and methodology, see appendixes A and B.

Background

The Board follows a decentralized process for initiating and procuring conference-related services. Board divisions can (1) procure conference-related services directly or (2) request assistance from Visitor Services, a section within the Office of the Secretary. Visitor Services can assist divisions by providing a variety of professional management services for conferences and special events sponsored by the Board, such as preparing budgets, selecting and reserving Board and non-Board facilities, planning menus, and making food service arrangements. Visitor Services also advises conference organizers within Board divisions on the customs and conventions for Board-sponsored events.

The Board encourages divisions to use Board facilities for conference activities. According to data obtained from Board Division Administrators, the Board hosted at its facilities 673 conferences costing approximately $1,429,505 during the period covered by our evaluation. Board divisions also reported hosting at non-Board facilities 33 conferences costing approximately $361,544 during the same time frame.³

The Board’s Conference-Related Policies and Procedures

Although the Board has not established an agency-wide policy or process for conference-related activities, specific Board policies and procedures contain requirements applicable to various aspects of conference activities. We identified four such documents.⁴

• The Official Meals Expenses Policy outlines the expectations for providing meals to visitors, guests, and employees in conjunction with official business, such as conferences. The policy requires that food and beverage request forms be submitted to Food Services online 10 working days prior to holding an event at a Board facility. For conferences held at non-Board facilities, a food and beverage request, a request for site recommendation and approval, and a list of participants must be submitted to Visitor Services at least 25 working days in advance of the event. The policy states that alcohol cannot be served at events where only Board employees are present. Further, for events where alcohol is served, service is limited to a 90-minute period and cannot begin before 5:30 p.m. These requirements apply to events held at Board and non-Board facilities.
• The Acquisition Policy outlines expectations for acquiring supplies, services, construction, and real property. For single purchases of $5,000 or less, Board employees may use their purchase card. For single purchases exceeding $5,000, the policy requires a contracting officer to solicit bids to identify and review quotes from at least three vendors and select the one that best meets the Board’s needs. Further, oral solicitation of bids is acceptable for the acquisition of supplies or services costing less than $25,000; however, a written solicitation of bids is required for purchases of $25,000 to $49,999. Additional procedures apply for purchases of $50,000 or more.⁵
• The Procurement Procedure details how to process purchase requisitions and the resulting contract in accordance with the Board’s Acquisition Policy and Small and Disadvantaged Business Policy. Submission of a purchase requisition notifies Procurement that a purchasing requirement exists and that budget money has been approved for that requirement. The purchase requisition contains a description of the good or service to be procured, a recommended vendor, and the price/cost estimate. The procedure also describes how to initiate a purchase order, which is a contract between the Board and a vendor.
• The Board’s Records Policy and Procedures Manual requires the agency to follow the National Archives and Records Administration’s (NARA) general schedule for retaining procurement documents.⁶ The NARA General Records Schedule details specific retention periods for procurement-related records, including solicited and unsolicited bids and proposal files.
• The Board’s Executive Function Records Retention and Disposition Schedule requires visitor services’ event planning files to be maintained for at least three years. According to the policy, event planning files can include scheduling memorandums, hotel accommodation documents, lists of attendees, correspondence, and final program schedules.

We referenced an additional guideline related to records retention to help inform our evaluation. The Federal Reserve Administration Manual is a Board policy that requires each Federal Reserve Bank to maintain records on discretionary expenditures and to control expenditures through policies that have been approved by the Reserve Bank’s board of directors. The policy states that Reserve Banks should maintain records on discretionary expenditures, including events that provide meals, in a manner suitable for review and for responding to congressional inquiries.

The Board’s Process for Planning Conferences

According to the Official Meals Expenses Policy, the Board may provide meals to visitors and guests for events held at both Board and non-Board facilities. When planning for an event, divisions must submit a food and beverage request and, to the extent practicable, use Board facilities.

We identified that there are various ways in which divisions can procure services for conferences held at non-Board facilities. Depending on the amount of the transaction, divisions can use purchase cards or coordinate with the Procurement section to acquire conference-related services. Divisions can use a Board purchase card for procuring conference-related services for a single purchase of $5,000 or less.⁷ When a single purchase exceeds $5,000, divisions can initiate a request—which includes food and beverage requirements, event date and time, meeting space requirements, and number of attendees—for conference services through Procurement. Divisions can also request an increase in their single-purchase card transaction limit to initiate a transaction that exceeds the $5,000 limit. In addition, divisions may procure conference-related services with the assistance of Visitor Services.

Oversight of Board Events Where Alcohol Is Served 

For events where alcohol is served, alcohol service may not begin before 5:30 p.m. and is limited to 90 minutes. These requirements apply to events held at Board and non-Board facilities. For events held at Board facilities, Food Services staff is responsible for ensuring compliance with these requirements, and according to Visitor Services staff, this responsibility lies with the host division for events held at non-Board facilities. Further, Visitor Services staff indicated that the start time and length of the alcohol service is specified in the contract with the vendor.

• 1. Although the Federal Travel Regulation does not apply to the Board, to establish consistency in identifying conference activities for our evaluation, we referenced the definition of conferences therein. The Federal Travel Regulation defines a conference as “a meeting, retreat, seminar, symposium, or event that involved attendee travel. The term ‘conference’ also applies to training activities that are considered to be conferences under 5 C.F.R 410.414." Return to text
• 2. This report was issued on April 2, 2012, and can be found at http://www.gsaig.gov/index.cfm/oig-reports/miscellaneous-reports/. Return to text
• 3. Based on the report provided by Board Division Administrators, we could not determine the location of 22 conferences with a total cost of approximately $131,378. These conferences are excluded from the figures above. Return to text
• 4. Our office performed a separate review of the Board’s purchase card program that included a review of the Board’s compliance with requirements in the Purchase Card Procedures. As a result, we did not assess the Board’s compliance with these requirements.  The report was issued on March 29, 2013 and can be found at http://oig.federalreserve.gov/reports/board-executive-summary-20130329a.htm. Return to text
• 5. During the period of our review, the Board did not hold any conferences with a single transaction cost above $50,000. Return to text
• 6. NARA is the nation’s recordkeeper for all documents and materials created in the course of business conducted by the U.S. government. Return to text
• 7. In general, the Board issued-purchase card limit is $5,000. Return to text