The CFPB Should Strengthen Internal Controls for Its Government Travel Card Program to Ensure Program Integrity

Appendix B Management's Response

CONSUMER FINANCIAL PROTECTION BUREAU
1700 G Street, N.W., Washington, DC 20552 

September 30, 2013

Mr. Mark Bialek
Inspector General
Board of Governors of the Federal Reserve System and
Consumer Financial Protection Bureau
20th and C Streets, NW
Washington, DC 20551

Dear Mr. Bialek,

Thank you for the opportunity to review and comment on the Office of the Inspector General’s draft report “The CFPB Should Strengthen Internal Controls for Its Government Travel Card Program to Ensure Program Integrity." We have reviewed the report and concur with the draft recommendations.

We are pleased that your review did not identify any weaknesses that are material or significant to the Bureau’s financial operations. As discussed in your report, in FY2012, travel comprised approximately three percent of the Bureau’s incurred expenses. Nevertheless, we agree with the process improvements included in your recommendations and are already taking action to strengthen the internal controls around the Bureau travel card program.

In an effort to enhance the Bureau’s travel program overall, several months ago the Bureau established an internal working group to evaluate the existing program and identify opportunities for improvement. As a part of this process, the Bureau is reviewing existing travel program controls and will develop new or adjust existing policies and procedures, as appropriate, to incorporate your recommendations. The following comments provide additional detail on our planned actions to enhance our processes and controls.

Thank you again for your review.

Sincerely,

 /signed/

Stephen Agostini  
Chief Financial Officer

Recommendation 1. Collect reimbursements from cardholders who received payments for unallowable expenses and research and collect reimbursement from the two cardholders who used credit hours as leave while on official travel and claimed reimbursement for lodging and M&IE.

Recommendation 2. Conduct an audit of the remaining 183 instances in which cardholders took eight or more hours of leave during an official business trip to determine whether cardholders claimed and received reimbursement for unallowable expenses.

Recommendation 3. Coordinate with the OHC to develop disciplinary actions that may be taken against cardholders who use their GTC for unauthorized transactions and include these guidelines in the Travel Card policy.

Recommendation 4. Require the Travel Office to provide to cardholders periodic reminders on the proper use of the GTC, including the policy associated with laundry expenses.

Recommendation 5. Coordinate with the OHC to obtain personnel leave data and require the Travel Office to expand the monthly cardholder statement review to include cardholders on leave in order to identify potential cases of unauthorized or fraudulent use and incorporate this requirement in the draft internal procedure.

Recommendation 6. Update the Travel Card policy to include the requirements in recommendations 7 and 8 below.

Recommendation 7. Require cardholders to note on the travel authorization any days of anticipated leave while on business travel and to note on the travel voucher any days of leave taken while on business travel.

Recommendation 8. Require cardholders’ supervisors to review and approve travel authorizations and travel vouchers in GovTrip in a timely manner and, as a part of that review and approval, verify that expenses anticipated or incurred on days of leave are allowable.

The Bureau concurs with the objectives of these recommendations and is in the process of enhancing its travel program to mitigate the identified risks and promote greater accountability in the use of Bureau resources. This summer, the Bureau initiated a voucher post-payment validation process for certain travel vouchers in order to verify claimed amounts for reimbursement. Furthermore, as noted above, the Bureau established an internal group to evaluate the travel program and identify opportunities for improvement. Informed by the Bureau’s internal review and the OIG’s review, the new policies and procedures will address the recommendations above, including enhanced controls to better monitor travel card usage and identify potential cases of improper usage; periodic trainings and reminders on travel card policies and procedures; and recoupment of reimbursements for unallowable expenses. Most notably, the Bureau is developing a travel approval process modeled after the practices of other federal financial regulators involving an open travel authorization for all employees followed by supervisor review and approval of travel vouchers. This process would eliminate the need for cardholder supervisors to review and approve individual travel authorizations. The Bureau anticipates implementing the new travel program, including the modified authorization and voucher processes, over the next several months.

Recommendation 9. Require the Travel Office to verify that new cardholder account cash-advance limits are set at prescribed amounts and periodically review cardholders’ cash-advance transactions to ensure that the prescribed limits are not exceeded.

Recommendation 10. Require the Travel Office to ensure that all GTC accounts for employees are closed immediately upon separation and revise the internal draft travel procedure to include this requirement.

Recommendation 11. Ensure that cardholders’ supervisors review and approve travel vouchers in GovTrip consistent with recommendation 8.

Recommendation 12. Ensure that the Travel Office sends past-due notifications to cardholders, their supervisors, the CFO, and the OHC as required in the Travel Card policy.

Recommendation 13. Provide periodic refresher training for both cardholders and their supervisors on

1. the CFPB’s Travel Card policy and procedures.
2. the submission, review, and approval of completed travel authorizations and vouchers in GovTrip.

Recommendation 14. Finalize and approve the internal draft travel procedure.

The Bureau concurs with the objectives of these recommendations and is in the process of enhancing its travel program to mitigate the identified risks and promote greater accountability in the use of Bureau resources. As discussed above, these updated policies and procedures will address the recommendations above, including enhanced controls to monitor, verify, and provide notification regarding a cardholder’s account status; periodic trainings and reminders on travel card policies and procedures; and a modified travel approval process involving an open travel authorization for all employees followed by supervisor review and approval of travel vouchers. The Bureau anticipates implementing the new travel program, including the modified authorization and voucher processes, over the next several months.