Audit showed 93 percent of sampled payments violated agency policy or Comptroller’s Directives
Hundreds of thousands of dollars spent on flights, hotels, and travel without proper approval, justification, or support
New York City Comptroller Scott M. Stringer released a new audit that found the City Department of Education (DOE) failed to comply with its own rules and City guidelines for the approval and payment of travel and conference expenses. In Fiscal Year 2017 DOE paid 42,508 travel expense vouchers, totaling over $20 million. The Comptroller’s office audited $1,060,056 worth of those payments and found that 93 percent failed to comply with DOE’s own rules, directives of the City Comptroller’s office, or both.
Among the noncompliant payments were:
- $14,023 in overcharges that DOE paid to two vendors, including an $11,913 overpayment to a Brooklyn hotel for a meeting space;
- $233,167 in payments to hotels and other venues for DOE meetings with no effort—as required by the rules—to find free and low-cost space in DOE buildings or other institutions, including $12,883 DOE spent on an overnight staff retreat at the Tarrytown House Estate on the Hudson in violation of DOE guidelines;
- $269,684 for 11 purchases that required, but lacked, written bids, such as a $17,847 catering bill, and a $99,716 payment to a Brooklyn hotel for a conference on the core curriculum; and,
- $14,956 in credit card charges with no supporting documentation, including $2,821 in charges at a resort in Nashville, Tennessee.
The Comptroller’s office also identified $60,422 in wasted public funds resulting from DOE’s prepayment of nonrefundable charges for a proposed trip to Cuba for 16 students and 6 staff members. When the Chancellor canceled the trip, DOE lost the $60,422 and then spent an additional $97,000 for a replacement trip to Brazil for most of the same group. The audit found an inconsistency in DOE’s policies for the preapproval of international travel that allowed the wasteful spending to occur without Chancellor-level approval.
“When it comes to our schools, every single dollar counts. We can’t afford to waste dollars that should go to our kids and classrooms,” said Comptroller Stringer. “As a public school parent, my top priority is making sure that all New York City students have opportunity and the tools and resources they need to learn and excel. As Comptroller, rooting out waste and fraud is one our office’s most important responsibilities. DOE’s failure to follow its own policy and keep close track of spending shows a disregard for taxpayers and ends up costing our students most.”
DOE is expected to comply with a set of requirements for travel expenses and fund-administration established by City Comptroller’s directives, which are binding guidelines for spending. The agency’s established policy for payment of employees’ travel expenses requires all travel to be approved ahead of time. Requests are processed in DOE’s electronic Travel Reimbursement and Approval Certification (TRAC) system, which also tracks travel and conference expenditures, including those charged to its agency credit card.
However, the Comptroller’s audit revealed DOE failed to follow its policy, approving 14 payments worth $221,638 without evidence that the expenditures had been authorized by the appropriate DOE officials. The agency also failed to maintain one or more required items of supporting documentation for 43 travel expense payments, totaling $246,799.
Other instances of noncompliance found that DOE:
- Paid $42,743 for employees to attend out-of-town conferences and training programs without the written justification required by DOE policy to show that the expenses were necessary for the employees’ professional and educational enhancement;
- Approved payment of $12,245 for out-of-town lodging and meals, which exceeded the maximum allowable rate of $9,315 by $2,930 (a 31 percent increase) without the required justification and approvals;
- The audit also found that DOE incorrectly reported travel expenses in its accounting system and consequently overstated its travel expenditures by more than $3 million in Fiscal Year 2017.
To address these issues, the Comptroller’s Office made the following recommendations:
- Recoup the overcharges of $14,023 that DOE paid to vendors as identified in this audit.
- Ensure proper justification for staff’s out-of-town travel was obtained and documented in the appropriate records relating to the travel expense before approving payment.
- Obtain proper approval from DOE’s Division of Financial Operations (DFO) before approving or paying a lodging charge for an employee at a rate that exceeds the applicable United States General Services Administration (GSA) rate.
- Ensure that all required approvals are obtained before travel commences and before the agency incurs expenses for lodging, meals, and conference attendance.
- Ensure that supporting documentation for travel and related expenses is properly maintained and available for audit and other authorized purposes.
- Consider requiring approval by the Chancellor or his or her designee for student trips that involve international or overnight travel and any trip for which a concern about security or safety is identified.
Read the audit and a full list of recommendations here.
