US govt. employees spent extra $1M to fly first class: Report

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What would your boss say if you submitted an expense report that included a $9,000 travel upgrade? That's exactly what at least one government employee did in the past few years.

Government employees spent an extra $1 million tax dollars to fly first class between 2012 and 2014, and based on a sample, more than half those upgrades were unjustified, according to a government watchdog report released this month.

The Office of Inspector General (OIG) of the Department of Commerce, a government watchdog, audited the federal agency's travel log between Oct. 1, 2012, and March 31, 2014. The report shows that in 56 percent of cases, employees of agencies such as the Census Bureau and Patent and Trademark Office have been fudging their expense reports to fly first or business class.

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Usually, employees are expected to act as a "prudent person" would, according to policy. But they can get premium-class flights if no coach class options are available, if travel time is in excess of 14 hours, or health or security reasons require the upgrade, the report said.

In "unjustified" arrangements, employees submitted outdated or incomplete medical forms, opted for direct flights over connections, or spent the weekend in their destination before returning home, for instance.

Some of the oversights included an approved medical exemption that was sent from a "questionable email address," rather than a traditional form. In another instance, a flier booked their trip from New York to South Korea less than 24 hours in advance—much less than the 30 days recommended. In many cases, reasons provided for a trip had errors or were absent altogether.

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The OIG concluded that the Department of Commerce could have saved at least $112,000 on a sample of 87 of the 245 premium-class flights by clarifying policies, such as what excuses are acceptable for upgrades and who can authorize travel expenses.

In response, the Department of Commerce said it is looking to revise its handbook—something that all companies should consider, said Tim Hird, executive director for Robert Half Management Resources, which consults with white-collar firms on managing high-level professionals.

"Among our clients, companies have put more and more emphasis on expense policies," Hird said. Travel is typically the biggest expense for his clients, but many companies now outsource to third-party programs that only book flights that meet company guidelines.

"We see now more and more that expense reviews are automated," Hird said. "There are companies now out there that specialize in this technology, which can drive efficiency and increase accuracy."

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Indeed, government employees are not the only ones guilty of business expenses bordering the unscrupulous. A Robert Half study of 1,600 financial executives found items such as kids' birthday gifts, adult movies, family vacations, pet food and even a tepee on expense reports.

Of course, it's not the first, or most severe, time that government employees have been caught behaving badly.

Three years ago, General Services Administration (GSA) employees were under fire for a conference in Las Vegas that cost $823,000 in tax dollars. GSA head Martha Johnson resigned and eight employees were placed on administrative leave after the 2010 incident came to light.

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Since then, the many government agencies have made moves toward transparency, embracing initiatives like "Yelp for Government," where users can review government agencies.

The House Oversight Committee, another internal watchdog group, recently held a "Worst Places to Work in the Federal Government" hearing, to pressure federal agencies that "have deep, systemic problems that are hampering employee success, driving away good employees and creating environments where cases of misconduct and mismanagement go unaddressed."

"The vast majority of federal employees are honest, hard-working people who want to be good stewards of American taxpayers' dollars," North Carolina Rep. Mark Meadows, a Republican, said of the hearing in a statement. "But there is great frustration when bad actors are not punished and ongoing remain unaddressed."

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Hird said that as organizations look to modernize their expense reporting, they should ensure a feedback system for employees to voice whether policies are realistic, and make sure written travel policies are clear and oft discussed.

"Automated systems are not the only answer," Hird said. "It has to start with the companies taking ownership for their policies. You're ultimately responsible for being your organizations' financial steward, and expenses are an important process that can really affect the bottom line."