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201310037 Fr

201310037 Fr

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Published by Washington Examiner
201310037 Fr
201310037 Fr

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Published by: Washington Examiner on Jun 04, 2013
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07/10/2013

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TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION 
Review of the August 2010 Small Business/Self-Employed Division’s Conference in Anaheim, California 
May 31, 2013Reference Number: 2013-10-037
 
 This report has cleared the Treasury Inspector General for Tax Administration disclosure review processand information determined to be restricted from public release has been redacted from this document.
Phone Number | 202-622-6500 E-mail Address TIGTACommunications@tigta.treas.gov  Website | http://www.treasury.gov/tigt
 
HIGHLIGHTS 
 REVIEW OF THE AUGUST 2010
searching for the most cost-effective location as
SMALL BUSINESS/SELF-EMPLOYED
required. Instead, SB/SE Division management
DIVISION’S CONFERENCE IN
approached two non-governmental event
 ANAHEIM, CALIFORNIA
 
planners to identify a suitable off-site location forthe conference. These two planners were not
Highlights
 
under contract with the IRS; hence they had noincentive to negotiate a favorable room rate forthe IRS. Instead, the three hotels paid the eventplanners an estimated $133,000 commission
Final Report issued on May 31, 2013
based on the cost of rooms paid for by the IRS.Highlights of Reference Number: 2013-10-037 The IRS may have been able to negotiate ato the Internal Revenue Service Chief Financiallower lodging rate to reduce conferenceOfficer.expenses if it had not used non-governmentalevent planners
 
and eliminated some of the
IMPACT ON TAXPAYERS
negotiated concessions provided by the hotels(
e.g.
, daily continental breakfast, a welcomeExcessive spending by Federal agencies onreception with two drink coupons for allmanagement conferences has been highlightedattendees, a significant number of suiteby recent Inspectors General reports and theupgrades)
.
TIGTA also identified othersubject of congressional hearings. Effectivequestionable expenses related to the conferencecost management is especially important givenincluding planning trips, outside speakers, videothe current economic environment and focus onproductions, an information corridor, andefficient spending. TIGTA identified severalpromotional items and gifts for IRS employees.ways the IRS could enhance controls overconference spending.
WHAT TIGTA RECOMMENDEDWHY TIGTA DID THE AUDIT
 TIGTA recommended that the IRS verify thatcosts are being tracked for recent conferences; This audit was initiated to identify the IRS’strack conference attendance; ensure thatspending on conferences during Fiscalapplicable IRS personnel are used to plan future Years 2010 through 2012. Our primary focusconferences; develop procedures outlining thewas on the August 2010 Small Business/appropriate use of non-governmental eventSelf-Employed (SB/SE) Division’s All Managersplanners for IRS conferences; establishConference in Anaheim, California. Thisprocedures related to planning trips, informationconference was selected because TIGTAcorridors, videos, and other technology for futurereceived an allegation of excessive spendingconferences; evaluate whether hotel upgradesand it was the most expensive conferenceshould be used for future conferences; andduring this period.ensure that taxable travel is identified and
WHAT TIGTA FOUND
Forms W-2,
Wage and Tax Statement
, areissued to applicable employees. The SB/SE Division conducted a conference foran estimated 2,609 SB/SE Division executivesIn their response to the report, IRS managementand managers
 
at a reported cost of $4.1 millionagreed with all of TIGTA’s recommendations.at the Marriott, Hilton, and Sheraton hotels The IRS plans to issue additional guidancelocated in Anaheim, California. Procedures atrelated to conference spending and attendance,the time of the conference did not require IRStracking Continuing Professional Educationmanagement to track and report actualcredits, the use of event planners, soliciting hotelconference costs. As a result, TIGTA could notroom upgrades, video productions, planningvalidate the conference cost reported by thetrips, and the conference approval process. TheIRS.IRS also stated that it plans to issue Forms W-2to all applicable employees. TIGTA determined that the IRS did not useavailable internal personnel to assist in
 
DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
 
TREASURY INSPECTOR GENERALFOR TAX ADMINISTRATION
May 31, 2013
MEMORANDUM FOR
CHIEF FINANCIAL OFFICER 
FROM:
 
Michael E. McKenneyActing Deputy Inspector General for Audit
SUBJECT:
 
Final Audit Report – Review of the August 2010 Small Business/Self-Employed Division’s Conference in Anaheim, California(Audit # 201310024)This report presents the results of our review to identify the Internal Revenue Service’s (IRS)spending on conferences during Fiscal Years 2010 through 2012 and review selected conferencesto determine whether the conferences were properly approved and the expenditures wereappropriate. Our review focused on the Small Business and Self-Employed Division’s AllManagers Continuing Professional Education Conference in Anaheim, California, fromAugust 24 through 26, 2010, and addresses the Major Management Challenge of AchievingProgram Efficiencies and Cost Savings.This audit focused on the Anaheim conference because it was the most expensive IRSconference held during the three-year period (Fiscal Years 2010 through 2012) and because theTreasury Inspector General for Tax Administration (TIGTA) received an allegation of excessivespending related to this conference.In its response, the IRS indicated that the use of event planners, the receipt of room upgrades,and the welcome reception and breakfast provided by the hotels did not entail the use of anyadditional Government resources. TIGTA disagrees with this statement. As noted in this report,TIGTA believes that the costs for the conference could have been reduced if the IRS had notrequested the numerous concessions from the Anaheim hotels and had instead negotiated for alower room rate. The requests for proposal sent by the event planners to the hotels on behalf of the IRS specifically requested numerous upgraded rooms and other concessions but specifiedthat per diem, the most that the IRS could pay for each room, would be paid. Further,Department of the Treasury guidance implemented in November 2012 places limitations on theuse of event planners because their use can increase costs. As noted in our report, event planners

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