GSA Chastened Over ‘Lavish’ Conference Expenses
|Date Posted: April 9, 2012|
Federal offices have to follow federal travel guidelines, and federal rates form the basis of tax treatment of private sector business travel reimbursements as well. But what happens when the federal government agency that develops travel policy goes astray from its own guidelines?
That’s what the General Services Agency (GSA) Inspector General’s office alleges the GSA division did when it sponsored a 2010 training conference for employees at a luxury resort just outside Las Vegas for west coast employees of the Public Building Service (PBS) of the GSA.
The report by GSA Inspector General (IG) Brian D. Miller, said that the expenses came to $822,751 for 300 attendees. It accused the GSA of not following its own travel policies, including exceeding per diem limits. The report -- noting that “the PBS Commissioner hosted an essentially celebratory party in his loft suite for GSA senior officials, at a cost of $1,960 -- is chock full of other details of the expenses the agency incurred at the M Resort of Henderson, Nev., and even includes photographs of luxury suites there. According to its website, the resort is 10 minutes south of Las Vegas McCarran International Airport, on the Las Vegas Strip.
The IG’s report, which called the GSA’s expenses “excessive, wasteful and in some cases impermissible,” is an embarrassment for the agency, which has been under orders by President Obama to tighten travel, entertainment and commuting policy across the federal government to save money and reduce pollution. The Obama administration, for its part, has been under political attack over the size of government in general, and over government waste.
To make matters worse, luxury travel and entertainment became taboo in both the public and private sectors after the onset of the recession in late 2008. That’s when some financial giants were discovered to have thrown lavish parties at luxury resorts even as the federal government was bailing them out with taxpayer money. Carmaker executives made a similar spectacle. Congress excoriated them for flying their private jets to the nation’s capital in order to ask for bailout funds. The next time the executives showed up on Capitol Hill, they drove from Detroit.
Miller said the GSA, “as the agency Congress has entrusted with developing the rules followed by other federal agencies for conferences, GSA has a special responsibility to set an example, and that did not occur here.”
So, what happened to the GSA for allegedly engaging in the same type of behavior that earned private companies a public lashing? GSA Chief Martha Johnson on April 2 wrote an official response to the IG’s report, outlining reforms the agency would take. In it, she said, “The excessive spending and other misconduct described in the report would be absolutely unacceptable under any circumstances. But it is especially egregious at a time when the fiscal constraints facing our nation demand that every dollar deliver the greatest value to the American taxpayer.” But the affair cost Johnson and at least two others their jobs. Later that day, the Washington Post reported that Johnson had resigned and that “two of her top deputies were fired and four managers were placed on leave Monday.”
What This Means
The GSA is in charge of developing and administering travel policy, including per diems -- daily rates for lodging, meals and incidental expenses related to travel, which may not be exceeded -- for the entire federal government workforce.
Managers in federal offices need to keep in mind that they still must comply with all rules governing business-related travel by federal employees. The rules still hold for private-sector employers, as well -- applying federal per diems is voluntary, but they form the basis of the tax treatment for reimbursement of qualified business-related travel expenses employees incur.
The abuses at the GSA do not change the rules. But they do provide an illustration of what can happen if the rules are not correctly applied.