An IRS contractor billed the agency $782,000 in dubious labor and travel charges between 2001 and 2006, according to a report by the Treasury Inspector General for Tax Administration.
TIGTA initiated an audit in 2006 to determine whether the vouchers submitted under the contract and paid by the IRS were accurate, supportable and allowable. The report does not identify the contractor by name, but according to a spokesman, it was ITS Services.
The IRS paid the contractor a total of $5,249,111.36 for 150 invoices submitted between March 2001 and July 2006.
TIGTA selected a random sample of 18 invoices totaling $1,237,480.37, or 24 percent, of the total expenses represented by the invoices, and identified approximately $782,000 in unsupported labor and travel charges. The labor charges were considered questionable because the records did not provide the necessary documentation to support that the charges were accurate and allocable to the contract. The travel charges were considered questionable because there were no receipts provided to support items such as airfare, lodging, mileage, and car rental charges, and TIGTA found instances of the contractor exceeding the standard allowable per diem rate.
TIGTA recommended that the IRSs procurement director have a contracting officer review the questionable charges and initiate recovery actions.
In response, the IRS agreed with TIGTAs recommendation and plans to work with the contractor to obtain additional documentation, determine the amount of recoverable costs, and take action to recover those costs.
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