Audit of Travel Expenses Relating to the 27th Annual Meeting of the Northwest Atlantic Fisheries Organization (NAFO)

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February 6, 2006

Background

• The annual Northwest Atlantic Fisheries Organization (NAFO) meeting is important to Canada’s interest in ensuring the protection and rebuilding of straddling fish stocks in the Northwest Atlantic Ocean. The 27^th Annual Meeting of NAFO was held in Tallinn, Estonia from September 19 to 23, 2005. The Department sent a delegation of 31 people, including two NAFO Commissioners, each with a precise role to play in the delegation. The total cost of sending the DFO delegation to the NAFO meeting was approximately $250,502.
• The Deputy Minister mandated the Audit and Evaluation Directorate to undertake an independent audit of the travel expenditures incurred by those who attended the NAFO 2005 annual meeting. The audit objective was to determine whether the travel arrangements were authorized appropriately and expenses were claimed in accordance with the travel policies.
• The audit team examined the travel authorization and expense claims of all 31 participants and interviewed participants regarding specific issues arising from the audit. In one instance, a traveller had combined other business travel with the NAFO meeting; in this regard, all the travel was audited. The audit work was completed in January 2006.

Assurance Statement

• Sufficient and appropriate audit work has been performed and evidence gathered to support the accuracy of the conclusions and findings contained in this audit report.
• We concluded that 24 delegates complied with the relevant travel guidelines and policies regarding pre-authorization of travel expenditures and provided adequate documentation in support of travel claims. However, we noted anomalies regarding the pre-authorization of combined business and personal travel and the absence of justification to support the class of air travel used.

Findings

• The following paragraphs describe the audit observations from our examination of the travel pre-authorizations and travel expense claims processed, including the airfare charges.

Pre-authorization of travel expenditures

• Twenty-nine of the travel authorizations were granted by the appropriate authorities before the trip and two others were not approved by the proper signing authority. Although policy allows for vacation leave during a business trip, for three delegates the Travel Authority and Advance (TAA) forms did not indicate their intention to take vacation leave. In four cases, it was not clear from the TAA which class of air travel was being authorized.

Documentation in Support of Travel Expense Claims

• As part of the Departmental measures to enhance accountability, all claims submitted were checked by Finance and Administration who carry out the verification of all international travel claims. Errors or omissions found during the verification process were corrected. All claims related to accommodation and transportation were supported by original documents. Exchange rates were included in the files for each participant and verified by Finance and Administration.

Airfares

• Airfare expenses totalled $158,766. Airfares pre-paid by the Department ranged from $1,473 to $9,374, with an average Economy Class fare of $2,128 and an average Business Class fare of $6,893. One flight, for $11,474, was not fully included in the figures because it involved travel to the NAFO meeting combined with other business. It should be noted that many variables other than Class govern the cost of a particular journey, including the dates it was booked and flown, the currencies used, and the routes chosen. We were advised by the government travel provider that it is not possible to obtain accurate retroactive information on fares.
• Our analysis showed that of the 31 delegates, 12 flew Economy Class, 6 Business Class, and 13 flew a combination of Business and Economy.
• The main TBS travel directive states that the standard for air travel is Economy Class. However, Business Class "shall be authorized where continuous air travel exceeds nine hours." Business travel "starts at the scheduled departure time, and ends with the arrival at destination or with an overnight stop or layover equivalent to an overnight stop." According to the TBS Policy on "Special Travel Authorities", a traveller with an occupation level of EX-1 in the Regions or EX-2 in NCR may travel Business Class.
• Five travellers were not entitled to fly Business Class based upon flight duration or their occupational level. For example, delegates flew Business Class on two legs of the return journey that involved over night stops, although each flight was less than the required nine hours and their occupational levels did not permit Business Class. In these cases, we have concluded that delegates were not fully aware of the TB Policy as it pertains to overnight stay, which constitutes a break in travel. Management action from a personnel and administrative perspective was taken to resolve this matter.
• Human Resources & Corporate Services Management has already implemented recommendation # 5 by issuing a Bulletin describing the key requirements relating to Business Class travel. It is also developing a Management Action for the other recommendations.

Recommendations

1. The Director General, Finance and Administration, should require that employees on travel status, as well as others for whom the Department is a sponsor, note the dates and locations of any time spent on personal business on their TAAs in the section describing the itinerary. This is designed to facilitate transparency and to facilitate the approval and correct processing of travel claims.
2. The Director General, Finance and Administration, should require travelers who combine a business trip with vacation leave to include in their TAAs a comparison by the government travel agency of the costs of the airfare with and without the segments for personal travel. In this way the Department can clearly determine whether additional costs have been incurred that can be charged back to a traveler.
3. Responsibility Centre Managers should ensure that the classes for all legs of air trips be clearly identified in the TAA before signing for Section 32.
4. The Director General, Finance and Administration, should ensure reference is made in the Travel Policy to the requirements regarding vacation arrangements that are currently specified in the Business Travel and Vacation Leave Qs & As.
5. The Acting Assistant Deputy Minister, Human Resources and Corporate Services should send a memorandum to all Assistant Deputy Ministers and Regional Directors General describing the key requirements relating Business Class travel and asking them to inform their responsibility centre managers of these requirements.

MANAGEMENT ACTION PLAN

Recommendations	Management Action Plan	Officer of Prime Interest	Initial Target Date	Actions Completed	Date Completed
1. The Director General, Finance and Administration, should require that employees on travel status, as well as others for whom the Department is a sponsor, note the dates and locations of any time spent on personal business on their TAAs in the section describing the itinerary. This is designed to facilitate transparency and to facilitate the approval and correct processing of travel claims	The DFO Travel Policy will be amended to require that employees on travel status, as well as others for whom the Department is a sponsor, note the dates and locations of any time spent on personal business on their TAAs in the section describing the itinerary.	Director General, Finance & Administration	March 3, 2006	The DFO Travel Policy was amended. Bulletin issued March 3, 2006	March 3, 2006
2. The Director General, Finance and Administration, should require travelers who combine a business trip with vacation leave to include in their TAAs a comparison by the government travel agency of the costs of the airfare with and without the segments for personal travel. In this way the Department can clearly determine whether additional costs have been incurred that can be charged back to a traveler.	The DFO Travel Policy will be amended to require travelers who combine a business trip with vacation leave to include in their TAAs a comparison by the government travel agency of the costs of the airfare with and without the segments for personal travel. This requirement will allow RCMs who sign section 34 and Accounting personnel who verify travel claims, to ensure that travelers pay for any airfare costs associated with personal travel.	Director General, Finance & Administration	March 3, 2006	The DFO Travel Policy was amended. Bulletin issued March 3, 2006	March 3, 2006
3. In addition, Responsibility Centre Managers (RCMs) should ensure that the class for all legs of air trips be clearly identified in the TAA before signing for Section 32.	The DG, F&A will publish a bulletin In the Loop advising managers and travelers of the DFO Travel Policy requirements regarding personal travel combined with a business trip. The bulletin will also address the meaning of continuous air travel in context of stopovers and Business Class fares.	Director General, Finance & Administration and RCMs	March 3, 2006	Bulletin issued March 3, 2006	March 3,2006
4. The Director General, Finance and Administration, should ensure reference is made in the Travel Policy to the requirements regarding vacation arrangements that are currently specified in the Business Travel and Vacation Leave Qs & As.	The DFO Travel Policy will be amended to address personal travel combined with a business trip and the required documentation.	Director General, Finance & Administration	March 3, 2006	The DFO Travel Policy was amended. Bulletin issued March 3,2006	March 3, 2006
5. The Acting Assistant Deputy Minister, Human Resources and Corporate Services should send a memorandum to all Assistant Deputy Ministers and Regional Directors General describing the key requirements relating Business Class travel and asking them to inform their responsibility centre managers of these requirements.	The Acting Assistant Deputy Minister, Human Resources and Corporate Services will send a memorandum to all Departmental Management Committee members (includes all Assistant Deputy Ministers and Regional Directors General) that describes the key requirements relating to Business Class travel and provides the relevant sections of the TB and DFO travel policies.	Acting Assistant Deputy Minister, Human Resources and Corporate Services	March 3, 2006	Memorandum to DMC was sent on April 4, 2006.	April 4, 2006
	A bulletin describing the key requirements relating to Business Class travel and the meaning of continuous air travel in context of stopovers will be also published In-the-Loop.			Bulletin issued March 3, 2006.