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TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
Review of the August 2010
Small Business/Self-Employed Divisions
Conference in Anaheim, California
May 31, 2013
Reference 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 | [email protected]
Website | http://www.treasury.gov/tigta
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HIGHLIGHTS
REVIEW OF THE AUGUST 2010 searching for the most cost-effective location as
SMALL BUSINESS/SELF-EMPLOYED required. Instead, SB/SE Division management
DIVISIONS CONFERENCE IN approached two non-governmental event
ANAHEIM, CALIFORNIA planners to identify a suitable off-site location forthe conference. These two planners were not
Highlightsunder 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, 2013based 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 Financial lower lodging rate to reduce conferenceOfficer. expenses if it had not used non-governmental
event plannersand eliminated some of theIMPACT 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 over
conference spending. WHAT TIGTA RECOMMENDED
WHY TIGTA DID THE AUDIT TIGTA recommended that the IRS verify thatcosts are being tracked for recent conferences;This audit was initiated to identify the IRSstrack conference attendance; ensure that
spending on conferences during Fiscal applicable IRS personnel are used to plan futureYears 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) Divisions 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 executives In their response to the report, IRS management
and managersat a reported cost of $4.1 million agreed with all of TIGTAs recommendations.at the Marriott, Hilton, and Sheraton hotels The IRS plans to issue additional guidancelocated in Anaheim, California. Procedures at related to conference spending and attendance,the time of the conference did not require IRS tracking Continuing Professional Educationmanagement to track and report actual credits, the use of event planners, soliciting hotelconference costs. As a result, TIGTA could not room upgrades, video productions, planningvalidate the conference cost reported by the trips, and the conference approval process. TheIRS. IRS also stated that it plans to issue Forms W-2
to all applicable employees. TIGTA determined that the IRS did not useavailable internal personnel to assist in
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DEPARTMENT OF THE TREASURY
WASHINGTON, D.C. 20220
TREASURY INSPECTOR GENERAL
FOR TAX ADMINISTRATION
MEMORANDUM FOR
FROM: SUBJECT:
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Review of the August 2010
Small Business/Self-Employed Divisions
Conference in Anaheim, California
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Review of the August 2010
Small Business/Self-Employed Divisions
Conference in Anaheim, California
Table of Contents
Background
Results of Review
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Small Business/Self-Employed Divisions
Conference in Anaheim, California
Appendices
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Small Business/Self-Employed Divisions
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Abbreviations
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Small Business/Self-Employed Divisions
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Background
Figure 1: Top Three Conferences Based on Estimated CostHeld at a Single Location During FYs 2010 Through 2012
Operating
Division Name/Purpose of Event Date Location Participants
Estimated
Cost
Source: Chief Financial Officer, November 2012.
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Promoting Efficient Spending
Management Deficiency Report: GeneralServices Administration Public Buildings Service 2010 Western Regions ConferenceDepartment of Veterans Affairs Administrative Investigation of the
FY 2011 Human Resources Conferences in Orlando, FloridaPromoting Efficient Spending to Support AgencyOperations
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Results of Review
The Anaheim Conference Was Approved by Both Internal RevenueService Deputy Commissioners
Conference Costs Were Primarily Paid Through Unused FundingOriginally Intended for Hiring Enforcement Employees
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Conference Costs Were Not Adequately Tracked and Monitored
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Recommendations
Recommendation 1:
Managements Response:Reissued Interim Guidance on the Approval Process for Event-Related Spending
Recommendation 2:
Managements Response:
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Credit for Continuing Professional Education forCertified Public Accountants.
The Process Used to Select Anaheim As the Conference Site Did NotFollow Established Guidelines
IRS personnel responsible for identifying conference space were not used
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Non-governmental event planners representing the IRS were not under contractand were paid $133,000 by the conference hotels
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Recommendations
Recommendation 3:
Hosted or Sponsored Conference Planning and Approval
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Managements Response:Acquiring Training, Meeting and ConferenceSpaceLeadership andEducation, Selection of Off-Site Locations and Facilities for Training
Recommendation 4:
Managements Response:Reissued Interim Guidance on the Approval Process for Event-Related Spending, Leadership and Education, Selection of Off-Site Locations and Facilitiesfor Training,
Planning Trips Were Made for the Conference
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Recommendation
Recommendation 5:
Managements Response:Leadership and Education, Selection of Off-SiteLocations and Facilities for Training,
Fifteen Outside Speakers Were Contracted for the Conference
Request, Authorization, Agreement & Certification of Training
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The conference featured 15 speakers at a cost of $135,350
Two keynote speakers were featured
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Figure 2: One of Six Paintings Created During the Keynote Presentation
Source: Recorded conference sessions.
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Star Trek Parody and SB/SE Shuffle Videos Were Produced for theConference
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RecommendationRecommendation 6:
Managements Response: etc.
A Substantial Number of Internal Revenue Service EmployeesReceived Hotel Upgrades
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Figure 3: A Presidential Suite at the Hilton Hotel
Source: Hilton website shown with permission from the Hilton Hotels and Resorts.
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Recommendation
Recommendation 7:
Managements Response: Leadership and Education,Selection of Off-Site Locations and Facilities for Training,
Acquiring Training, Meeting and Conference Space,
Local Employees Were Granted Authorization to Stay at theConference Hotels
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Wage and Tax Statement
RecommendationRecommendation 8:
Managements Response:
Several Meals and a Welcome Reception Were Provided During theConference
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Other Expenses Related to the Conference
An exhibitor hall was used at significant additional cost
i.e.
The exhibit featured engaging activities, such as an outer space galaxy challengegiveaway, Los Angeles Angels baseball ticket giveaway, and a time capsule (to share
visions of SB/SE in 2020), as well as booths, displays, and an assortment of information
about the work of SB/SE. The Information Galaxy was attended by over 1,800individuals who visited booths hosted by SB/SE operating units and other IRS business
units, executives, and senior managers. In addition to the Information Galaxy, it featured
networking opportunities, educational workshops and forward-looking technology.
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Promotional items/gifts were provided to IRS employees
Automated response tools were rented
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Recommendation
Recommendation 9:
Managements Response:Reissued Interim Guidance on the Approval Process for Event-Related Spending,
Leadership andEducation, Selection of Off-Site Locations and Facilities for Training,
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Appendix I
Detailed Objective, Scope, and Methodology
etc
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Internal controls methodology
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Appendix II
Major Contributors to This Report
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Appendix III
Report Distribution List
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Appendix IV
Internal Revenue Service Conferences
Held During Fiscal Years 2010 Through 20121
FY Name Division
Estimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
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FY Name DivisionEstimated
Cost Attendees Venue Location
Grand Total Estimated Cost for 225 Conferences $48,631,799
Source: Chief Financial Officer, November 2012.
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Appendix V
Legend for Abbreviations Listed in Appendix IV
Acronym Definition
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Acronym Definition
Source: IRS Intranet.
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Appendix VI
Internal Revenue Service Conferences
Held During Fiscal Years 2010 Through 2012
Ranked by Highest Average Cost Per Event
IRS Operating Division
Number
of Events Total Cost
Average
Cost
Per Event
Totals 225 $48,631,800 $216,141
Source: Chief Financial Officer, November 2012.
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Appendix VII
Summary of Costs
for the Anaheim Conference
Category Cost
Total Costs $4,133,183
Source: SB/SE Division management. Costs are rounded.
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Appendix VIII
Guest Speakers Procured
for the Anaheim Conference
Guest Speaker Cost Service Provided Topic
Total Costs for Guest Speakers $135,350
Source: IRS sole-source justification documents; Standard Forms 182, Request, Authorization, Agreement &
Certification of Training; and SB/SE Division management. Total costs are rounded up.
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Appendix IX
Anaheim Conference Agenda
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Anaheim Conference Agenda
Source: SB/SE Division management.
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Appendix X
Anaheim Conference Workshops
on August 25, 2010
Workshop Title Speaker Times
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Workshop Title Speaker Times
Source: SB/SE Division management.
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Appendix XI
Managements Response to the Draft Report
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