A new investigative report from the Treasury Inspector General for Tax Administration (TIGTA) reveals charges of “excessive spending” by the Internal Revenue Service related to a 2010 conference held in Anaheim, Calif.
The report, released Tuesday afternoon, details the $4.1 million spent on that conference, including what TIGTA calls "questionable expenses" for planning trips, outside speakers, video productions and promotional items and gifts for IRS employees.
The report looked at IRS travel spending more broadly between 2010-12, but focused on the Anaheim conference because it was the most expensive and TIGTA received requests from Congress to investigate it. Overall, TIGTA found the IRS held 225 conferences in that two-year period for a total estimated cost of $49 million.
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The Anaheim conference was attended by more than 2,600 IRS employees of the Small Business/Self Employed division and was held at local Marriott, Hilton and Sheraton hotels.
This comes in the face of a trend toward cost-reduction in conference spending -- according to TIGTA, $37.5 million was spent on conferences in Fiscal Year 2010, versus $4.8 million in Fiscal Year 2012.
Other key findings on the Anaheim conference based on the TIGTA audit:
- IRS management provided documentation showing the final total costs of the conference at $4.1 million; however TIGTA could not be certain that this amount represents a full accounting of the conference costs.
- IRS management did not use, as required by policy, its own employees to assist in searching for the most cost-effective conference location. Instead, they hired outside event planners who were not under contract with the IRS and had no incentive to negotiate more favorable room rates. The three hotels -- not taxpayers -- paid the event planners an estimated $133,000 commission based on the cost of rooms paid for by the IRS.
- Instead of negotiating for lower room rates to reduce conference expenses, the IRS instead accepted concessions for free breakfasts, free drink coupons and suite upgrades provided by the hotels.
- The IRS reported that it spent $50,187 on videos for the conference, but was unable to provide any details supporting this cost. These included the Star Trek and Gilligan's Island parodies, as well as a dance party video.
- IRS management contracted with 15 outside speakers for presentations at a total cost of $135,350. Costs for outside speakers included a $17,000 fee for a keynote speaker whose presentation included creating six paintings of famous people to reinforce his message of finding creative solutions to challenges. Two of the paintings were given away at the conference, three were donated to charity, and one was lost, according to IRS management. Another keynote speaker was paid $27,500 which included a $2,500 fee authorized for first-class airfare.
- IRS employees made three planning trips at a cost of approximately $35,800 prior to the conference.
- The IRS also paid over $30,000 for 45 IRS employees who resided in the Anaheim-area to stay at the hotels and incur per diem expenses while at the conference.
Numerous gifts/promotional items were provided to attendees at an estimated cost of more than $64,000. Those promotional items and gifts included:
- 2,804 "brief bags" with an imprinted logo that were provided to all attendees at an estimated cost of $15,669.
- 2,800 hard-covered spiral journals with a conference logo imprinted. The IRS paid $2,449 for 505 journals. (Sponsors also contributed to this cost.)
- 800 lanyards, 75 travel mugs and 75 picture frames/clocks with imprinted logos.
What if anything has changed in recent months? In February 2011, the IRS attempted to reduce spending on travel and conferences by setting new guidelines.
TIGTA made nine recommendations to the IRS concerning all future conferences. Officials say the IRS agreed to those and states that it has begun taking corrective steps.
This story was originally published on Tue Jun 4, 2013 1:48 PM EDT