Purpose

To determine whether the use of travel monies by selected government employees complied with rules and regulations and is free from fraud, waste, and abuse. The audit covers the period July 1, 2008 to August 14, 2013.

Background

New York State's executive agencies spend between $100 million and $150 million each year on travel expenses. These expenses, which are discretionary and under the control of agency management, include car rentals, meals, lodging, transportation, fuel, and incidental costs such as airline baggage and travel agency fees. As part of a statewide audit initiative to determine whether the use of travel money by selected government employees was appropriate, we audited travel expenses for the highest cost travelers in the State, each of whom incurred over $100,000 in travel expenses during the three-year audit period, as well as other outliers.

As a result of our analysis, we examined the travel expenses of three State Education Department (Department) employees with outliers in the areas of train fare and fuel expense. We also reviewed and considered the possible tax implications of travel and work locations for one of the three employees. In total, we examined $100,908 in travel costs associated with these three individuals.

Key Finding

We found the travel expenses for two of the three Department employees selected for audit adhered to State travel rules and regulations. However, the travel expenses for one employee implicated the Internal Revenue Service "tax home" rules for 2009 and are taxable as income. As a result, the travel reimbursements made to the employee were reported to the taxing authorities and an amended W-2 was issued. The travel expenses for 2010 may also trigger the Internal Revenue Service "tax home" rules and may be taxable as income. If so, the travel reimbursements made to the employee may have to be reported to the taxing authorities and an amended W-2 issued.

Key Recommendation

Work with the Comptroller's Division of Payroll, Accounting and Revenue Services to take any additional necessary corrective action related to the potential taxable status of employee travel expenses.

Other Related Audits/Reports of Interest

Department of Labor: Selected Employee Travel Expenses (2012-S-75)
Office of Court Administration: Selected Employee Travel Expenses (2012-S-96)