“The costs of ensuring 100 percent accuracy … would far outweigh the benefit to the public.”
That’s how a top federal official explained opposition to a government watchdog’s call on her department to do a better job of accounting for spending on conferences.
The comment by Ellen Murray, the department’s assistant secretary for financial services and chief financial officer, came in response to an investigation by the inspector general of how government workers spent $1.4 million on conferences in 2012 that was never reported.
The IG recommended that HHS officials report actual conference costs instead of estimates after finding discrepancies in the actual costs for four of the events held that year. The four events included an international AIDS conference, an awards ceremony and two medical preparedness meetings.
In 2012, HHS sponsored 140 conferences that cost more than $100,000 each, according to the report. The agency spent more than $56 million on conferences that year.
In her response to the IG, Murray added that “striving for perfection would put the department at risk of not fulfilling the statutory requirement for a timely report,” citing the availability of data as a factor in its ability to produce accurate reports.
HHS failed to list $1.4 million between the four conferences that the IG reviewed for its report. The agency reported spending $15.8 million for those conferences on its website as required by new Office of Management and Budget rules.
Partly in response to public backlash over reports of the General Service Administration’s lavish Las Vegas conference in April 2012, OMB issued stricter requirements for approving and reporting such spending that May.
HHS officials expressed confusion over the new reporting guidelines and pointed to the fact that they were enacted after three of the conferences had taken place as reasons for the gaps in reporting, the IG said.
Despite the fact that HHS relied on contracts to fund some of its conferences, the agency failed to keep track of how much it paid contractors for individual events, the IG said.
Instead, HHS tapped some contractors to perform services for a variety of conferences over several years without specifying the costs for each conference, the report said.
For example, the agency did not report more than $500,000 it paid a contractor to assist with a July 2012 international AIDS conference in Washington because its contract with the company was spread over five years and didn’t spell out the specific cost of the event.
While most of the reported costs were allowable, the IG found food, travel and other expenses that the agency should not have funded. For a Los Angeles awards conference, for example, HHS overpaid a contractor by more than $31,000 for unallowable meal costs, duplicate travel expenses and administrative services.
The IG’s auditors were unable to determine whether costs for a nearly $3 million Nashville employee training summit were allowable because HHS had signed both a contract and a cosponsorship agreement with the organization providing the services.
The Chesapeake Health Education Program had provided services for HHS through a $4.8 million contract since 2007, but the 2009 cosponsorship agreement that split conference duties between the agency and the event cosponsor failed to mention that CHEP already had a contract with HHS to work at the summit.
“Neither the contract nor the cosponsorship agreement clearly defined a methodology for allocating the costs of the shared conference responsibilities,” the IG said.
HHS officials instead told the agency watchdog that “they generally charged conference costs to the contract as long as there were funds available and charged the cosponsorship agreement only when other funds were exhausted.”
The agency has been advised to take “particular care” when cosponsoring events with organizations like CHEP, which routinely seeks HHS contracts and grants, due to the “potential appearance of undue influence or preferential treatment,” the IG report said.
However, the agency has no guidelines to address situations where the cosponsor of an HHS event is also the agency’s contractor for conference services at the same event, the IG noted.
The IG recommended HHS force its contractors to quantify the services they provide for each conference and to direct agency officials who sign off on travel expenses not to authorize costs for meals that are already provided as part of the conference.
