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By Lauren R. Taylor Government Executive May 1, 2002

Frugal travelers can pocket some of what they save the government.

w ave the government travel dollars and some of that money might end up in your own pocket. A little-known program allows agencies to reward frugal travelers for their efforts to keep costs down.

Two laws gave birth to the gain-sharing program. Title 5 of the U.S. Code authorizes agencies to pay cash to employees who "contribute to the efficiency or economy of government operations." And the 1994 Federal Acquisition Streamlining Act, which includes a mandate to promote frequent traveler programs, directed the General Services Administration to issue guidelines on gain-sharing to agencies. GSA has an agencywide gain-sharing program, as do the departments of Justice and Education. Other agencies offer gain-sharing, but in some cases it is limited to a single office or division. These include the Centers for Disease Control and Prevention, the Federal Aviation Administration, and the Energy, Agriculture and Treasury departments.

Rules Of The Road

Throughout government, some of the basic rules of gain-sharing apply. Employees are eligible for cash awards of up to 50 percent of the amount they save. Employees can save two ways: by using an airline ticket earned with frequent flier miles or spending less than the maximum on lodging. They can save on lodging expenses by staying with family or friends, choosing hotels with rates that are lower than per diem or sharing rooms. Any extra money spent on transportation to stay at a hotel with a cheaper rate is deducted from the amount saved.

Most programs require travelers to save a certain amount before they can get money back. Education Department employees, for example, must save at least $400 in a fiscal year before they can apply for a cash award. Most agencies have decided that processing an award for smaller amounts isn't worth the administrative cost.

In fiscal 2000, Education gave $25,109 to 24 employees who participated in the program. Participation peaked in 1998 with 36 employees. "The people who use it have gotten some nice awards," says Jeanne Johnson, a financial manager who oversees Education's program. Justice handed out about $100,000 to 110 people for saving more than $200,000 in 1997, the last year for which figures are available.

Dubious Rewards

Although the amounts saved by this program aren't huge, Justice finance staffer Mark Rodeffer considers it successful because it costs the department virtually nothing. Each traveler's administrative office processes the awards, and the amount of additional work is minimal, he says. Though it looks like a simple win-win deal, gain-sharing has its detractors. Chief among them are those who think people shouldn't be rewarded for spending the taxpayers' money wisely. "In my office," says a financial officer at the Energy Department, "we feel that government travelers should have a desire to be good stewards and make the best economic decisions. We didn't like the idea of incentivizing what should be expected." Others are frustrated because only frequent travelers, most of whom are managers, can effectively benefit from gain-sharing programs. Thus gain-sharing looks like something managers cooked up to reward themselves, one critic says. And although the structure of the program is simple, "it can be an accounting and administrative nightmare," says one federal travel expert who asked not to be named. Gain-sharing also suffers from a lack of visibility. An Education staffer calls the department's initiative a "stealth" gain-sharing program. "I tried to find out about the program after hearing that they existed in other departments," says the employee. "Neither my supervisor nor the executive officer knew about it." And Defense civilians, who make up the government's largest workforce, are ineligible for the program. The department's Joint Travel Regulation, which covers such workers, says that when travelers stay with family or friends on a business trip, their per diem lodging expense is considered to be zero. The big question is what will happen to gain-sharing now that federal workers are allowed to keep frequent flier miles earned on business travel for personal use. "People are not going to give the government a free trip," says the travel expert. "Gain-sharing may just go out the window." But people like Julie Yeager Arthur, an institutional improvement specialist for Federal Student Aid in Seattle, may keep gain-sharing alive. She expects to continue turning in her frequent flier miles to Education. Arthur travels so much she doubts she could take enough time off to use all her miles for personal travel. "Besides," says Arthur, "when I have time off, I like to stay home."

All Charged Up

b ank of America, which issues travel cards to more than 400,000 Army employees, has given the government until the end of May to figure out how to pay millions of dollars in delinquent bills. Otherwise, the bank plans to cancel the cards. The bank threatened to close off the accounts on March 25, but it granted a 60-day stay of execution, says Sue McIver, director of the Services Acquisition Center at the General Services Administration. The center oversees government travel contracts. In fiscal 2001, Defense Department employees spent $3.4 billion with travel cards.

The 1998 Travel and Transportation Reform Act requires federal employees to use government charge cards, instead of personal credit cards, for travel expenses. In most cases, agencies reimburse employees for travel expenses and the employees pay the bills. But late payments and allegations of card abuse, particularly at the Defense Department, have tarnished the program's reputation. Pentagon officials have formed a task force to find ways to reduce abuse of government charge cards, including purchase and travel cards. "Money lost this way is the kind of money that can be spent on bombs, bullets and whatever else is needed," Defense Comptroller Dov Zakheim told reporters at a March press conference. "We are not going to let the grass grow under our feet on this one." The task force's recommendations are due in late May. A year ago, Defense Finance and Accounting Service Director Jerry Hinton told House legislators that the Pentagon had crafted a plan to solve the problem. The plan included:
  • Increased attention from agency managers.
  • Deactivation of infrequently used cards.
  • Garnishment of salaries for workers whose accounts were more than 120 days overdue.
  • Establishment of direct payment systems to banks.
  • Reduced credit limits.
  • Increased fees for late and returned checks.
But at a March 13 hearing, Sen. Charles Grassley, R-Iowa, said that 46,572 Defense employees had defaulted on more than $62 million in travel expenses as of November. Recommendations the task force is studying include making supervisors who sign off on purchases pay for unauthorized purchases out of their own pockets and making charge card abuse a specific offense under the Uniform Code of Military Justice. The move would strengthen the Pentagon's ability to punish and prosecute employees, according to Zakheim. Another suggestion is to suspend security clearances for people who misuse the cards. More than 90 Defense employees are under investigation for misuse and abuse of government charge cards. A bank has never canceled an agency or department travel card account, McIver says. "Employees are on travel all around the world," she says. "Credit cards are an important way the [government] does business."

- Kellie Lunney and Tanya N. Ballard

FOR MORE INFORMATION

Laws: www.opm.gov/perform/articles/112.htm and www.access.gpo.gov/uscode (Title 5, Part III, Subpart C, Chapter 45, Subchapter 1). Contacts: Jeanne Johnson at Education (jeanne_johnson@ed.gov) or Mark Rodeffer at Justice (Mark.H.Rodeffer@usdoj.gov).

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