Audit Report

Download PDF

Travel Expenses – Controller’s Office

 Objective: To determine whether travel expenses contained errors or evidence of fraud, either intentional or unintentional, and to evaluate the efficiency and effectiveness of the Controller’s Office’s system for processing these transactions.

The City and County of Denver has guidelines for all expending authorities, officers, employees, and contractors who travel for official business on behalf of the city. These guidelines are contained in Fiscal Accountability Rule 10.8 and a related procedure that accompanies the rule and governs travel for all city agencies.

The Controller’s Office establishes the rules for fiscal activities by maintaining the city’s Fiscal Accountability Rules.

The Controller’s Office Should Improve Its Monitoring of City Agencies’ Compliance with Travel Expense Rules

We uncovered missing supporting documentation and numerous instances when agencies did not comply with the city Fiscal Accountability Rule that governs travel.

We found the Controller’s Office has not updated this fiscal rule or its related procedure since 2013, and therefore, the policy and procedure do not reflect current practices. We also found:

  • The Denver Fire Department does not use the city’s financial management system of record to calculate per diem amounts, and as a result, the department applies inconsistent per diems when compared to other city agencies.

  • The city does not have a comprehensive communications strategy to keep employees informed of the city’s policy on expensing official travel.

  • Accounts payable services staff conduct random checks, but they do not systematically monitor for key indicators that would assess agencies’ compliance with city travel rules.

Travel Cards Are Not Canceled in a Timely Manner after an Employee Leaves Their Job with the City

Some city employees are issued credit cards for traveling on behalf of the city, but we found accounts payable services staff did not always cancel these cards in a timely manner once some employees stopped working for the city.

1.1  Update and Regularly Review Travel Policy – The city controller should update, revise, and regularly review Fiscal Accountability Rule 10.8 and its associated travel procedure to ensure they reflect current practices and Workday functionality. The Controller’s Office should also ensure the rule is regularly reviewed and updated in compliance with the city’s Fiscal Accountability Rule Overview.

At a minimum, the following policy best practices should be added to the updated fiscal rule and procedure in detail:

  • More specific requirements for submitting trip cost-estimates to agencies’ expending authorities as part of the preapproval process.
  • Requirements for submitting supporting documentation to an agency approver.
  • Specific designation that the agency is responsible for tracking the reconciliation and return of excess travel advances.
  •  Guidance on separating receipts of multiple travelers.
  • Guidance for calculating travel-related mileage reimbursements.
  • Guidance on where to start tracking mileage on a trip.

Agency Response: Agree, Implementation Date – Dec. 31, 2020

1.2  Require Workday for Travel Expensing – The city controller should require all city agencies to use the city’s system of record, Workday, instead of manual or other electronic forms for the entire travel expense cycle — including:

  • Spend authorizations if used for budget or preapprovals.
  • Expense recording.
  • Approvals for expense reimbursement or payment.

Agency Response: Agree, Implementation Date – July 16, 2018

1.3 Remove All Discontinued and Inactive Forms – The director of the Financial Services Division in the Controller’s Office should, upon regular review of Fiscal Accountability Rule 10.8 and on an ongoing basis, remove all discontinued and inactive forms related to official travel from the city website.

Agency Response: Agree, Implementation Date – Dec. 31, 2020

1.4 Ensure Consistent Calculations for Per Diems – The accounts payable services team in the Controller’s Office should work with the Denver Fire Department to bring the department’s wildland firefighting per diem calculation into Workday. The team should also ensure per diem rates are calculated consistently across all city agencies.

Agency Response: Agree, Implementation Date – Jan. 1, 2021

1.5 Specify Workday Use and Appropriate Per Diem Rate – The accounts payable services team in the Controller’s Office should clearly state in Fiscal Accountability Rule 10.8 and its associated procedure that Workday is to be used to enter per diem amounts and that location-specific U.S. General Services Administration rates — which include the higher rate when traveling to a specific city or county that has a higher rate — must be used for all employees.

Agency Response: Agree, Implementation Date – Dec. 31, 2020

1.6 Improve Employees’ Awareness of Workday Functionality – The accounts payable services team in the Controller’s Office should improve job aids and other trainings available to city employees about how to enter per diem amounts in Workday. Specifically, there should be more detail about how to enter per diem amounts when traveling to multiple destinations during the same trip and how to remove specific meals from daily per diem amounts.

Agency Response: Agree, Implementation Date – Dec. 31, 2020

1.7 Develop Communications Strategy – The Controller’s Office should work with the Department of Finance to develop a comprehensive communications strategy and use multiple communications channels to inform all city employees who could be subject to travel about the details of Fiscal Accountability Rule 10.8 and its related procedure. The strategy should include regular communications to employees that update and remind them of travel rules and also inform them of issues that Controller’s Office staff identify as problems when analyzing travel performance measures throughout the year.

Agency Response: Agree, Implementation Date – Dec. 31, 2020

1.8 Develop Travel Training – The Controller’s Office should develop a travel training that every city employee is required by policy to take when planning to travel on official business for the city. This training should be completed as part of onboard training or before an employee takes their first trip.

Agency Response: Agree, Implementation Date – Jan. 31, 2021

1.9 Use Key Performance Metrics to Measure Agencies’ Compliance – The accounts payable services team in the Controller’s Office should develop, collect, monitor, and analyze key performance metrics to measure city agencies’ and employees’ compliance with Fiscal Accountability Rule 10.8 and its associated procedure. At a minimum, metrics should include performance measures such as:

  • Obtaining documented preapproval or spend authorization for travel.
  • Submitting expenditures for reimbursement within 30 days.
  • Providing sufficient supporting documentation.

Agency Response: Agree, Implementation Date – Jan. 31, 2021

1.10 Communicate Noncompliance Quarterly – Using the Financial Network email list or other targeted emails, the Controller’s Office should communicate at least quarterly any trends in noncompliance and provide guidance on the corrective action needed for agencies to comply with Fiscal Accountability Rule 10.8 and its associated procedure.

Agency Response: Agree, Implementation Date – Jan. 31, 2021

2.1 Review Controls for Travel Card Reconciliation – The accounts payable services team in the Controller’s Office should evaluate and improve their monthly process for ensuring travel cards are canceled in a timely manner after an employee ceases to work for the city. Supporting documentation for this reconciliation should be retained. The team should also ensure all travel cards listed in Workday are accounted for in Citibank’s system and that all cards listed in the Citibank system are accounted for in Workday.

Agency Response: Agree, Implementation Date – Nov. 30, 2020

The objective of our audit of travel expenses in the City and County of Denver was to determine whether travel expenses contained errors or evidence of fraud, either intentional or unintentional, and to evaluate the efficiency and effectiveness of the Controller’s Office’s system for processing these transactions. I am pleased to present the results of this audit.

We found the Controller’s Office needs to improve how it monitors city agencies’ compliance with the Fiscal Accountability Rule that governs travel transactions. We also found the Controller’s Office has not updated that fiscal rule or its related procedure in seven years; the office needs to update both and more effectively communicate the rule and procedure to all city employees. In addition, we noted the Controller’s Office conducts random checks to see whether agencies comply with travel rules, but the office lacks systematic monitoring to track noncompliance. We also found the Controller’s Office allowed the Denver Fire Department to deviate from the city’s per diem policy and that the fire department inaccurately calculated some per diems. Lastly, our testing revealed some employees had access to city travel cards long after leaving their jobs with the city, although we found no evidence of misuse or fraud.

City travel dropped in 2020 due to the COVID-19 pandemic. However, by implementing recommendations for stronger monitoring and communication, for improving automated controls over per diem calculations, and for ensuring compliance with the Fiscal Accountability Rule, the Controller’s Office will be better equipped going forward to record and monitor travel expenses for the city and to communicate travel policy and procedure to all city employees.

This performance audit is authorized pursuant to the City and County of Denver Charter, Article V, Part 2, Section 1, “General Powers and Duties of Auditor.” We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

We extend our appreciation to the personnel in the Controller’s Office who assisted and cooperated with us during the audit. For any questions, please feel free to contact me at 720-913-5000.

Follow-up report

A follow-up report is forthcoming. 

Audit Team: Katja E. V. Freeman, Cody Schulte, Todd Green, Rob Farol, Dave Hancock
Methodological Support: Samuel Gallaher, William Morales