Review of Travel Payment Processing

Transcription

1 Exhibit 1 Review of Travel Payment Processing March 16, 2015 Report No Office of the County Auditor Evan A. Lukic, CPA County Auditor

2 Table of Contents Executive Summary... 1 Purpose and Scope... 1 Methodology... 2 Background... 2 Findings... 5 Recommendations... 7 Appendix A - Travel Request and Voucher Form... 8

3 Executive Summary This report presents the results of our review of the travel payment process. The objective of this review was to determine whether travel payments are processed in compliance with applicable County policies and Florida Statues. We also reviewed entertainment expenses associated with reimbursement requests for employees of the Convention and Visitor s Bureau (CVB). Our review covered payments processed during the 18 month period from October 1, 2012 through March 31, We reviewed 40 travel and entertainment expense items totaling $257,900 and found general compliance with County travel policy and State Statutes documentation requirements; however, we noted the following exceptions: Some travel transactions did not comply with the County s travel policy relative to proper documentation, approval and timely submission, Some travel and entertainment expenses for CVB employees did not comply with Florida Statutes documentation requirements, and Quarterly reports of employees travel were not provided to the Board as required by County policy. We recommend the Board of County Commissioners direct the County Administrator to take steps to ensure that: 1. Travel and entertainment expenses comply with Florida Statutes and County Policy, and 2. Travel expenses are reconciled to the County s financial system, and reported to the Administration and the Board on a quarterly basis. Purpose and Scope The objective of this review was to determine whether travel payments are processed in compliance with applicable County policies and Florida Statues. We also reviewed entertainment expenses associated with reimbursement requests for employees of the CVB. Our review covered payments processed during the 18 month period from October 1, 2012 through March 31,

4 Methodology To accomplish our objective, we: Reviewed o Broward County Administrative Code, Section 3.10, County Employee Travel, Section 18.30, County Commissioners Travel, Section 20.28, Travel Policy, and Section 20.29, Reports o State of Florida Administrative Code, Chapter 69I-42, o Accounting Division s Internal Control Handbook (ICH), Chapter 3.13, o Florida Statutes , Per diem and travel expenses of public officers, employees, and authorized persons, o Florida Statutes , Sections 9a. to 9c., County Tourism Promotion Agencies, o Accounting Division s Quarterly Travel Reports to County Administration for four quarters ended June 30, 2013, September 30, 2013, December 31, 2013 and March 31, 2014, and o A sample of 40 reimbursement requests including: 30 paid through Travel Request and Voucher (TR) forms, 7 paid by County Purchasing Cards (P-Card), and 3 paid by Direct Payment Voucher. Interviewed Accounting Division staff. Background Broward County employees are authorized to be paid for job-related travel (such as business, education and conference). The associated travel expenses are requested, approved and paid through the following process. Pre-Travel Process Prior to travel, the employee is required to complete and sign the top portion of a TR form (a blank TR form can be found at Appendix A on page 8). The employee s signature on the form certifies that the expenses serve a public purpose, authorized by law and necessary to perform the responsibilities of their position. Travel Advances An employee that is not assigned a County procurement card may request a travel advance to cover authorized expenses such as hotel fees, airfare or meals. If the employee requests a travel advance, the employee is required to check the appropriate box on the TR form and enter the amount requested. 2

5 Agency Review and Approval The TR is required to be approved by the Director or designee. If an advance is requested by the employee, the Director or designee must approve the advance amount. Approval by the Director or designee serves as authorization for the employee to be absent from work and certifies that the estimated travel expenses are reasonable and necessary for the performance of the employee s responsibilities. After approval, the agency submits the TR form to the Accounting Division s Accounts Payable Section for processing. Accounts Payable staff are required to review for completeness, approval and reasonableness, enter the information in an Access database, copy the TR and return the original to the agency for post-travel submission of actual expenses. If an advance is requested, the Accounts Payable staff enters the advance amount in the Advantage Financial system (Advantage) for payment processing. After the check is generated, an Accounts Payable staff notifies the agency and the employee is required to sign a pickup log validating receipt of the check. Post-Travel Process After travel is complete, the employee is required to submit an approved final TR form to Accounts Payable within 10 working days documenting the actual expenses including items paid with County issued credit cards. Accounts Payable staff are required to review the TR package to ensure proper authorization, compliance with County policy and State Statutes regarding documentation requirements and enter actual expenses in the Access database. If no amount is due to or from the employee, the TR form is filed by Accounts Payable. If an amount is owed to the employee, Accounts Payable staff enter the approved reimbursement amount in Advantage to generate a check to the employee. If an amount is due to the County, the employee s reimbursement check must accompany the TR form for any amount of travel advance in excess of actual expenses. The TR form is copied and the copy and the check are forwarded to the Records and Treasury Division for deposit. Travel Paid by County Purchasing Cards Travel-related expenses can either be reimbursed through the process explained above, or paid by the County s Purchasing Cards (P-Cards). P-Cards are County credit cards that allow employees to make convenient purchases of non-recurring and low dollar value goods and services, or pay for travel related expenses. If the employee uses the P-cards for travel, the employee must list the expense on the TR form under the section Charges to County Credit Card, and attach proper supporting documentation. Travel Reporting As stated previously, Accounts Payable staff records estimated travel costs in an electronic database which is updated with the actual expenses on the post-travel TR form. Quarterly, the Accounting Division is required to prepare a summary report of County employee travel and the County Administrator is required to provide the report to the Board of County Commissioners quarterly. 3

6 Total Travel Expenditures Table 1 below, shows the County employee s travel and entertainment expenses of approximately $3.16 million during the 18 month period reviewed. Table 1 Travel and Entertainment Expenses FY 2013 and FY 2014 (Six Months Ended March 31, 2014) Fiscal Year Advantage Reports FY 2013 $ 2,193,100 FY 2104 (6 months ended ) $ 970,184 Total $ 3,163,284 Source: Advantage Financial System The pie chart below depicts the breakdown of the $3.16 million by agency, including the five County agencies with the highest expenses. Other Agencies $1,196,164 (38%) Travel Expenses by Agency CVB $967,320 (30%) Transit $101,121 Aviation (3%) $442,537 (14%) WWS Port Everglades $121,350 (4%) $334,794 (11%) Source: Prepared by the County Auditor s Office with information from Advantage Financial System 4

7 Findings In order to evaluate compliance and controls over the payment process of travel and entertainment expenses, we reviewed a sample of 40 randomly and judgmentally selected reimbursement requests totaling $257,900. Our sample included 30 travel expenses reimbursed through TR forms, seven paid by County P-Cards, and three paid by Direct Payment Vouchers (DVs). The sample included 16 from employees of the Convention and Visitor s Bureau (CVB) and 24 from eleven other County agencies. Our review found general compliance with County travel policy and Florida Statutes; however, we noted the following exceptions: Finding 1: Some travel transactions did not comply with the County s travel policy relative to documentation, approval and timely submission. The Accounting Division s ICH 1 requires employees to report travel expenses on a TR form, provide support for travel expenses, obtain proper approval and file a final TR form within ten working days after completing travel. Our review found the following: One TR form totaling $10,282 was not approved by agency personnel and another TR form included $200 without documenting the nature of the expense. 21% of the dollar amounts sampled for P-cards or DVs included travel expenses and training registration that were not reported on TR forms. State statutes and County policy require County personnel to report all travel related expenses on a TR form. Failure to account for all expenses on a TR form weakens controls over the travel payment process, creates the opportunity for duplicate payments and unnecessarily complicates reporting of travel costs. 23 (58%) final TR forms reviewed were not submitted to the Accounting Division within the 10 day period established in County policy. Accounting staff acknowledged the late submissions and stated that timely submission of the final TR form was more critical when employees received travel advances. However, due to the large number of P-Cards, few employees now request travel advances. Delays in submitting final travel expenses impact the timeliness of recording travel expenses in the accounting records and information that should be provided to Administration and the Board. 1 Accounting Division s ICH, Volume 6, Chapter 3, Sections 13.4.A, 13.5A, 13.6.B and 13.6.C. 5

8 Finding 2: Some travel and entertainment expenses for CVB employees did not comply with Florida Statutes documentation requirements. We reviewed 16 TRs totaling $212,950, for travel and entertainment expenses for employees of the CVB. We found that $3,776 (2%) of business entertainment expenses and employee meals were not supported by detailed receipts or did not specify the names, titles or connection to the tourism industry of those entertained as required by Florida Statutes. Further, due to lack of the required documentation, we were unable to ascertain if the expenditures were in compliance with Florida s statutory requirements for reimbursement of travel and entertainment. Section , Florida Statutes, subsection 9 a. states agencies created for the purpose of tourism promotion by a county levying the tourist development tax, such agencies are authorized and empowered to: (a) Provide, arrange, and make expenditures for transportation, lodging, meals, and other reasonable and necessary items and services for such persons, as determined by the head of the agency, in connection with the performance of promotional and other duties of the agency. However, entertainment expenses shall be authorized only when meeting with travel writers, tour brokers, or other persons connected with the tourist industry. All travel and entertainment-related expenditures in excess of $10 made pursuant to this subsection shall be substantiated by paid bills therefor. Complete and detailed justification for all travel and entertainmentrelated expenditures made pursuant to this subsection shall be shown on the travel expense voucher or attached thereto Finding 3: Quarterly reports of employees travel were not provided to the Board as required by County policy. Broward County Administrative Code Section 3.10.d and Section b require quarterly reporting of employee travel expenses to the County Administrator and to the Board of County Commissioners (Board). Our review found the Accounting Division did not provide quarterly travel reports to County Administration for one 2 of the six quarters reviewed. Further, the amounts reported did not agree to travel expenses recorded in the County s financial system. We also noted that none of the quarterly travel reports during our review periods were provided by County Administration to the Board as required by County policy. 2 One missing report was for the quarter ended December 31,

9 Recommendations We recommend the Board of County Commissioners direct the County Administrator to take steps to ensure that: 1. Travel and entertainment expenses comply with Florida Statutes and County Policy, and 2. Travel expenses are reconciled to the County s financial system, and reported to the Administration and the Board on a quarterly basis. 7

10 Appendix A - Travel Request and Voucher Form Source: Accounting Division Travel Request and Voucher Form

11 Office of the County Auditor Board Action Agenda Item #46 May 24, 2016 A. MOTION TO FILE Review of Travel Payment Processing (Report No. 16-1). ACTION: (T-10:29 AM) Approved. VOTE: 7-0. Commissioner LaMarca and Vice Mayor Sharief were inaudible during the vote. 46. B. MOTION TO ADOPT County Auditor s Recommendations. ACTION: (T-10:29 AM) Approved. VOTE: 7-0. Commissioner LaMarca and Vice Mayor Sharief were inaudible during the vote. Attachments Exhibit 1 - Review of Travel Payment Processing (Report No. 16-1) Exhibit 2 - Management's Response