IRS Spending Fracas Triggers Damage Control Effort

In the wake of the latest government meetings scandal, the U.S. Travel Association is urging government lawmakers not to “lose sight of the value that responsible travel and face-to-face meetings create for constituents.”

This time it’s the Internal Revenue Service that has come under fire for its expenditures on meetings. A report earlier this week from the U.S. Treasury Inspector General detailed excessive spending on conferences by the IRS.
 
U.S. Travel CEO Roger Dow acknowledged that the Inspector General’s report “describes instances of wasteful spending on the IRS employees,” and that “Congress and the IG should do all they can to root out wasteful spending.”

But Dow also urged lawmakers not to overreact, saying he hoped they would “not hamstring the effectiveness of federal agencies.”

$50 million tab
An audit issued by U.S. Treasury Inspector General J. Russell George reported that the IRS had spent nearly $50 million on 225 conferences during the fiscal years between 2010 and 2012.

A 2010 conference in Anaheim that cost $4.1 million was singled out for “questionable expenses.” Among them were $50,178 in video production, including a Star Trek parody, and $64,000 in “numerous gifts/trinkets for IRS employees.”

The audit also red-flagged the conference for hiring the services of two event planners who were not under contract with the IRS. The planners were reported to have received commission payments of $133,000. They had “no incentive  to negotiate a favorable room rate for the IRS,” the audit stated.

Cutting back
On a positive note, the audit said the IRS has taken steps to reduce its conference spending, cutting back from $37.5 million in 2010 to $4.8 million in fiscal 2012, a reduction of 87%.

The Treasury Department announced that a more rigorous approval process is now in place for any meetings that cost over $25,000.

Dow: Meetings are needed
In cautioning against overreaction to excesses at the IRS, Dow said that meetings are “often the efficient and effective way for government professionals to accomplish their roles.”

Meetings and business travel are crucial for delivering such important services as disaster relief assistance, safety inspections, corporate training on taxes and government regulations and services for the military, he said.

Lessons for the private sector
In making his case, Dow pointed to the adverse effects on the private sector from reductions in meetings and business travel.

Dow cited a study conducted by Oxford Economics of companies that reduced business travel spending in 2007. While just 4% of the companies said the cutbacks had helped company performance, 57% said the reductions in travel had a negative impact.

The IRS fracas comes little more than a year after reports of a lavish GSA gathering in Las Vegas sent government meetings into a tailspin, resulting in widespread cutbacks. (See: GSA Fallout Wreaks Havoc With Government Meetings)