We appreciate the evaluation and recommendations by the OIG contained in the draft report entitled, “The FDIC’s Management of Travel Costs” issued August 16, 2005. The Division of Finance (DOF) welcomes the opportunity to continually improve management of travel costs whenever possible.

The above referenced report included five (5) recommendations. Below please find each recommendation followed by DOF’s response.

OIG Recommendation #1: Evaluate reinstating the FDIC’s travel policy requiring mandatory use of the national travel agency for making hotel reservations while conducting examinations of financial institutions.

Management Response: DOF has given considerable thought to reinstating the policy requiring mandatory use of the national travel agency by the Division of Supervision and Consumer Protection (DSC) travelers conducting examinations of financial institutions, and is keenly aware of the financial impact of the decision to indefinitely suspend this policy. However, given the numerous complaints made by DSC examiners as well as the negative impact this policy had on morale among DSC examiners, DOF does not intend to reinstate the policy at this time.

DSC represents DOF’s largest customer base. Therefore, a primary goal of DOF travel programs must be to meet the needs of this group. Most examiners stay at small hotels in rural areas that are not listed in the computer reservation systems used by travel agencies to make reservations and typically do not offer commissions, Therefore, if SatoTravel is used to make reservations at these properties, the traveler must either wait to receive an e-mail confirmation from the agent or hold on the phone while the agent locates the number to the property and then calls and makes a reservation. Given the limited access to e-mails that can exist while examiners are at a bank. checking e-mail to see if a reservation has been made is not a viable option.

Additionally, holding on the phone also is not making the best use of an examiner’s time when the examiner can call the property directly and make a reservation in less time. While it is true that suspending the referenced policy has resulted in an overall increase in the cost to administer the national travel agency program^{[ 1 ]}, the increased cost is not significant enough to warrant the additional time examiners would have to spend making hotel reservations through SatoTravel or the increase in customer complaints and declining morale that would result from a reinstatement of this policy. We do not believe that re-instating this policy would be in the best interest of customer service and DSC concurs with our evaluation.

OIG Recommendation #2: Encourage FDIC travelers to use hotels that offer commissions for all lodging reservations.

Management Response: We concur with this recommendation. DOF cannot mandate the use of such hotels without first satisfying its collective bargaining obligations. However, DOF can certainly encourage travelers to use hotels that offer commissions via a global e-mail advising travelers of the benefits of booking commissionable properties. In addition, if the new online reservation system is implemented, the global e-mail announcing its implementation will include information on how to identify and select SatoTravel hotel rates. SatoTravel rates are special rates negotiated by SatoTravel with individual hotels. These rates are all at or below per diem and are always commissionable. A global e-mail advising travelers of the benefits of using commissionable properties will be transmitted by October 28, 2005.

Implementation of the online booking tool is contingent upon the results of the test which begins on September 12th and will last approximately 60 days. RESX is the product currently under consideration. If the test is successful, the product will be implemented throughout FDIC.

OIG Recommendation #3: Provide information, guidance, and training to FDIC employees to ensure that they understand how to use SatoTravel’s online reservation system and its capabilities so that FDIC can increase usage of the system.

Management Response: We concur with this recommendation. As noted in the audit report, DOF is currently evaluating RESX, an online reservation system being offered to FDIC by SatoTravel. If the decision is made to implement RESX, a user guide (which has already been developed) will be posted on the DOF travel web site. Travelers will be advised via global e- mail to read the user guide prior to making reservations in the online system. In addition, a help desk number and e-mail address will be provided to FDIC travelers. General information and usage tips will be provided to travelers in the global e-mail. This information also will be posted on the DOF travel web site.

Completion of this task is contingent upon the successful testing and implementation of RESX, the online reservation system currently under consideration by DOF, but we anticipate the online system to be implemented before December 31, 2005.

OIG Recommendation #4: Conduct an analysis to determine the cost-benefit of making the government travel card mandatory for all FDIC travel.

Management Response: We concur with this recommendation. DOF will work with Bank of America to determine the cost benefit of making the government travel card mandatory for all FDIC travel. If the analysis shows a financial benefit sufficient to warrant a policy change, such a change could not be implemented until DOF met its collective bargaining obligations. Initial estimates indicate that the resulting increase in rebates would not be sufficient to warrant a change in policy that is likely to be detrimental to the morale of FDIC travelers. DOF will complete this analysis by January 31, 2006.

OIG Recommendation #5: Research GSA’s eTravel program to determine whether the program could improve or replace the FDIC’s current travel program.

Management Response: We concur with this recommendation. A process improvement study of the travel processing system has already been planned for 2006. The study will review the benefits of each of GSA’s eTtavel programs. GSA offers three separate programs which were developed by three outside contractors, EDS, CWGT, and Northrup Grumman. In addition to the GSA programs, the study will review other commercial travel processing systems. Our existing Electronic Travel Voucher System (ETV) will also be studied to determine the feasibility of adding those capabilities that are available on GSA’s programs which are not available on ETV. Those capabilities include:

1. A Travel Reservation Module;
2. Web-based accessibility;
3. Split Payment Processing. This is the ability to designate which portion of a travel voucher reimbursement should be paid directly to the travel credit card company and which portion should be paid directly to the employee.

Once this study has been completed, estimated to be by September 30, 2006, a recommendation will be made to management on which approach best meets the needs of the FDIC.