Taxpayer-funded travel has been out of control at San Diego State University, with executive staff and faculty spending greater than allowed amounts on hotel rooms and business-select class airfare without adequate receipts and justification.
To make matters worse, university administrators have been using subordinates to sign off on travel expenses, creating potentially costly and illegal conflicts of interest.
So says an audit conducted by the California State University's office of Audit and Advisory Services and the trustee's committee on audit.
"We reviewed travel expenses for 173 campus-funded and 37 auxiliary-funded business trips that took place between June 1, 2012, and May 31, 2014," says the recently released report, dated December 3, 2014.
According to the document, nine travel expense claims of the sample "included lodging costs that exceeded the maximum rate of $175 per night, without a pre-approved exception request."
Excessive lodging tabs "ranged from $181 per night to $279 per night, excluding taxes."
In addition, the audit sample found that 12 travel claims paid by the university and an additional 11 claims paid by a so-called campus auxiliary organization such as the non-profit Campanile Foundation, "included reimbursement for early flight check-in fees ($12.50 per one-way flight), business-select economy class airfare, or choice seating without a documented explanation or justification included with the [travel claim]."
According to the Southwest Airlines website, business select fares include special "fly-by" access to flights, as well as priority boarding, additional frequent flier points, and a premium alcoholic beverage on the flight..
Sixteen other claims paid by the campus "contained a transaction of $25 or more that was not supported by a detailed, itemized receipt," and 27 claims "were approved more than 30 days after the end of travel."
Agnes Wong Nickerson, the university’s associate vice president for financial operations, told auditors that "there were valid reasons for the exceptions made when processing the cited expenditures, but these reasons might not have been sufficiently documented due to oversight."
She added that late submissions of the travel claims were "due to oversight."
Notes the audit: "Inadequate completion and review of [travel expense claims] increases the risk of unauthorized, unnecessary, or non-business travel expenditures and noncompliance with applicable policies."
Under state laws and regulations, the university is required to maintain Travel Authorization forms documenting expenditures, but auditors discovered major gaps there as well.
"We reviewed 210 trips for executives and found that the related [travel authorization] form was inadequate for 52 campus-funded trips and 30 auxiliary-funded trips," the auditors discovered.
According to the audit, travel authorization forms "for 39 campus-funded trips and nine auxiliary-funded trips were not signed by the appropriate approver.”
Added auditors, “Of these, five TA forms for campus-funded trips and one TA form for an auxiliary-funded trip were dated after the travel occurred, and two TA forms for campus-funded trips and nine TA forms for auxiliary-funded trips were not fully completed."
Auditors also found that the authorization forms "for an additional 10 campus-funded trips and six auxiliary-funded trips were dated after the travel occurred," and that forms, "for an additional three campus-funded trips and six auxiliary-funded trips were not fully completed."
Documentation for nine auxiliary-funded trips could not be found at all, the audit said.
Says the audit: "Inadequate travel approvals may increase the risk that employees will not be appropriately insured on the trip, and increases the risk of unapproved or unnecessary travel expenditures and noncompliance with campus and CSU policy."
Even when documents were filed on time, many were signed by employees under the supervision of those making the travel claims.
"We reviewed 210 travel claims and found 101 instances where executives’ [travel expense claims] were approved by an assistant vice president, associate vice president, or accounts manager who had authority to approve travel expenses, but who reported directly or indirectly to the traveler,” the audit says.
"The practice of allowing subordinates to approve [travel expense claims] does not comply with California State University travel policy and creates a potential conflict of interest."
Controls on travel expenses run up by husbands and wives of SDSU executives were also problematic, according to the audit.
"Neither the Campanile Foundation nor the San Diego State University Research Foundation had adequate written policies or procedures addressing the payment or reimbursement of spousal travel," the audit found.
"Travel policies did not specifically address requirements for spousal travel, such as the documentation required to substantiate the business purpose of the trip and definition of the appropriate approvers for these travel expenses."
Concludes the document, "The lack of written policies and procedures related to the reimbursement of spousal travel costs at the auxiliary organization increases the risk of noncompliance with CSU and Internal Revenue Service requirements."
SDSU officials agreed with the findings and vowed to change the university's "policies and procedures " by April 30, according to the audit.
No estimated number of total undocumented trips taken or amount of wasted taxpayer money over the years as a result of the bad practices was given.