INTERNAL AUDIT REPORT TRAVEL MANAGEMENT IN UNOPS HEADQUARTERS, COPENHAGEN

Transcription

1 INTERNAL AUDIT REPORT OF TRAVEL MANAGEMENT IN UNOPS AT HEADQUARTERS, COPENHAGEN Final Audit Report No. IAIG/3103 Issue Date: 4 October 2013

2 Contents I. Executive summary... 2 II. Audit report Audit objective Audit scope Audit methodology Overview of travel management in UNOPS... 4 III. Detailed assessment Travel framework Travel service delivery Travel information management Annex 1. Definitions of audit terms ratings and priorities Annex 2: Summary of responses to the survey questionnaire Annex 3. Glossary Audit report no. IAIG/3103: travel management in UNOPS 1

3 Report on the internal audit of travel management in UNOPS I. Executive summary Introduction As part of its annual work plan for 2013, the Internal Audit and Investigations Group (IAIG) conducted a performance audit of travel management at UNOPS Headquarters in Copenhagen, Denmark. The audit covered the period from 1 January 2011 to 31 May On-going and planned developments of internal controls were taken into consideration. Travel is an important component of UNOPS activities. Travel, whether to participate in a conference or meeting, monitor programme implementation or provide advice, training or assistance, is a means for organizations to fulfil their mandates. Access to economical, convenient and efficient air travel services is important in the effective administration of UNOPS s mandate and programmes. UNOPS Headquarters, Copenhagen has non-exclusive long term agreements with four travel agencies 1 for the provision of travel management services. This enables the Agency to consolidate its travel requirements and achieve cost efficiency and an improved and more personal service. The contract also includes the provision of Management Information Services. The current contract was signed in April 2009 and is valid until April 2014, with optional extensions for one-year periods depending on satisfactory performance. UNOPS Headquarters also has an agreement with Van Breda International for the provision of travel insurance services for all UNOPS personnel on duty travel, and since January 2011 has had an agreement with Van Breda for the provision of its Global Travel Account Services through American Express, which is valid until December The audit was carried out in accordance with the International Standards for the Professional Practice of Internal Auditing. These standards require that IAIG plans and performs the audit to obtain reasonable assurance on the adequacy and effectiveness of governance, risk management, and control processes. Audit rating In IAIG s opinion, the overall level of internal control over the governance, risk management and control processes of Travel Management in UNOPS Headquarters is partially satisfactory 2 in providing reasonable assurance regarding the effective management of air travel activities. This opinion is based on limited scope audit procedures which were performed on a sample basis. The IAIG review indicated that the use of the Travel Registration Tool (TRT) as an automated travel system would provide significant opportunities for reducing the number of steps and streamlining the format of documents, so as to save on time and costs. IAIG has identified 14 steps 3 which are duplicated or redundant and could be removed without significantly affecting the risks involved in the travel management process. IAIG has also identified at least four documents 4 that can be moved to an electronic format to save time and enhance data retention. Further, IAIG estimated a potential cost saving in lieu of insurance payment to the extent of USD (for the period ). 1 Net Travel, Via Travel, Vejle Rejser and Carlson Wagonlit 2 See definitions in Annex 1 3 Please refer to Chart B: the purple highlighted processes. 4 Travel Request form, Travel Authorization form, etc. Audit report no. IAIG/3103: travel management in UNOPS 2

4 Key audit issues and recommendations The audit report contains nine recommendations, five of which are considered high priority and the remaining four of which are medium priority. Function Travel Framework Audit issue and recommendation The Director, Corporate Support Practice Group, should consider reducing ticketing costs by improving the planning of travel through the following measures: a) Administer Quarterly Travel Planning for all Headquarters Units, or alternatively consider the amendment of Organizational Directive (OD) 11 to mandate booking of airline tickets sufficiently in advance (preferably 21 days or more); and b) Ensure that requests for Official Duty Travel not included in approved Quarterly Travel Plans (ad-hoc travel) are submitted for the approval of the respective competent authority as per OD 11. The Director, Corporate Support Practice Group, should ensure that: a) Travel expenditure reports are periodically generated and reported as necessary; b) Periodical reports are requested from the travel account holder and used for the intended purposes; such reports would cover the sectors most travelled, the airlines most used, the average price of tickets, the split of expenditures per airline, and Savings Assessment Reports (SAM) for carbon emission for each quarter. The Director, Corporate Support Practice Group should review the existing travel structure at Headquarters and make recommendation for change to a more efficient structure. Travel Service Delivery Travel Information Management The Director, Corporate Support Practice Group, should: a) Analyse the frequently travelled destinations, and based on the analysis develop guidelines for price ceilings; and b) Investigate the key drivers of the differences in pricing on the major routes and consider negotiations with the principal carrier. The Director, Corporate Support Practice Group, should ensure that travel processes are supported by an appropriate electronic platform for: a) Generating travel requests and preparing travel authorizations; b) Operating as a single point repository of documents related to travel as per AI/CSG/2010/02 (rev. 1) on official duty travel ; c) Functioning as a management information system; d) Serving as a monitoring tool for travel insurance and security; and e) Serving as a reporting tool for CO2 emission in accordance with AI/CSG/2010/02 (rev. 1) on official duty travel. The medium priority recommendations include issuing guidelines to clarify the concept of most direct and economical route and absolute entitlement and to regulate the use and distribution of frequent flyer miles/points among Headquarter units, request and receive the full range of services specified in the contract with travel service providers, and examine the issue of payment of insurance charges for personnel on office duty travel. Audit report no. IAIG/3103: travel management in UNOPS 3

5 II. Audit report Audit objective At the 2012 Global Management Meeting, UNOPS Senior Management agreed on six must wins, one of which was Optimized Internal Processes. The general objective of this audit is to contribute to the achievement of this must win. The specific objective of the audit is to improve the efficiency of the travel management process with a view to making the travel process less time-consuming and costly, yet maintaining the internal controls required to address operational risks. Audit scope The scope of the audit was limited to reviewing the official travel expenditure undertaken from Headquarters (HQ) from January 2010 to May 2013, which totalled USD 3.4 million 5. The audit methodology included a review of policies and procedures, interviews with concerned staff, and the collection and analysis of data. Home leave travel, education grant travel and repatriation travel were not covered in this audit. Audit methodology The audit was carried out in accordance with the International Practices Framework for Internal Auditing issued by the Institute of Internal Auditors (IIA). In alignment with IAIG subscription to a riskbased approach in planning and conducting its audits, the audit focused specifically on risks identified during the planning stage. The audit selected representative (random or other appropriate) samples of 180 transactions from the entire population for detailed testing. An analytical review of the entire population was performed, relevant documents were reviewed and interviews with managers, key members of task teams, and stakeholders were held at UNOPS HQ. Further, a survey was conducted to obtain stakeholders opinions on travel management at UNOPS HQ. IAIG circulated a questionnaire among 25 managers and 14 travel focal points (TFPs), which achieved a response rate of 50 percent and 85 percent respectively. The analysis is presented together with the most significant findings under section III and a summary of the responses is given in Annex 2 of the report. Overview of travel management in UNOPS a) UNOPS travel policy and administrative instructions The following UNOPS travel policy and administrative instructions provide guidance as described below: 1. Organizational Directive 11 (rev. 3) 2. AI/CSG/2010/02 (rev. 1) 3. AI/CSG/2010/03 (rev. 1) 4. AI/HRPG/2009/01 (rev. 1) 5. AI/HRPG/20 13/01 6. Guidance on travel management on the intranet, including the Travel Registration Tool. b) Process flow in travel management 5 Includes cost of travel tickets, daily subsistence allowance (DSA) and other travel related expenses. Audit report no. IAIG/3103: travel management in UNOPS 4

6 The Corporate Support Practice Group already provides a high-level process flowchart on official duty travel (see Chart A below). On the basis of discussions held with managers and travel focal points at UNOPS HQ, IAIG has now designed a flowchart (see Chart B below), which is based on the current travel processes for official duty travel and indicates the 14 steps that can be potentially redundant without significantly affecting the risks involved (in case of automation), and this has been confirmed by the Corporate Support Practice Group. Chart A: CSPG flowchart, official duty travel 6 Chart B: Process for official duty travel, as mapped by IAIG 7 6 Source: UNOPS travel intranet page of CSPG. 7 The purple highlighted processes were identified by IAIG as redundant in case of automation. Audit report no. IAIG/3103: travel management in UNOPS 5

7 c) Analytics in travel management Drawing on UNOPS Travel Registration Tool data and the data available with the travel account holder (American Express), IAIG has reviewed UNOPS HQ travel for the year 2012, as illustrated through the following charts. Chart C: Top five headquarter units, number of journeys made, % 18% 13% 27% 27% Executive Office OPG IAIG SPPG HRPG For the five headquarters units that travelled the most, Chart C above indicates the actual number of journeys undertaken. The most journeys were made by the Executive Office and the Outreach and Partnerships Group (27 percent each), followed by the Internal Audit and Investigations Group (18 percent). Chart D: Breakdown of flight costs by carrier, route and class of service, by American Express in Travel registration tool till 31 May Includes cost of air tickets only, i.e. DSA and terminal expenses are excluded for purpose of this analysis. Audit report no. IAIG/3103: travel management in UNOPS 6

8 Chart D above provides details of the distribution of UNOPS travel expenditure between January and December 2012, according to carriers used, routes taken, and class of service. The Agency s Savings Assessment Report (SAM) analysis was performed on UNOPS HQ data. It is observed that: Carriers used: 31 percent of travel expenditure was with a single airline (SAS); next was Lufthansa (10%), followed by Qatar Airways (7%), and Air France (6%). Routes taken: With the top five routes accounting for 44 percent of expenditure, route concentration is classified by American Express as medium level. The top routes are (from Copenhagen) to New York and Newark, to Bangkok, to Abidjan and to Geneva. Class of service used: 51 percent of all expenditure was for the most economical ticket-type available, namely Restricted Economy. Chart E: Comparison of savings margins against expenditure for UNOPS and its peers based on data prepared by American Express In Chart E above, the savings performance of UNOPS and 53 companies with similar air travel volumes and travel pattern characteristics are compared, and the findings are as follows: The UNOPS Savings Margin was 26 percent, which is below the peer group average. UNOPS has an opportunity to generate further savings taking into account the position of comparative peers by availing restricted fare and booking tickets sufficiently in advance. Audit report no. IAIG/3103: travel management in UNOPS 7

9 Chart F: Current and potential savings, by class of travel and by carrier, by American Express for 2012 The analysis made by American Express is reflected in the chart above, which indicates the following: Current savings 10 (with SAS) are USD 64,600, but there remains a potential further saving of USD 12,800. There is also the potential for further savings if agreements are drawn up with airlines other than SAS. In comparison to its Peers, UNOPS has key opportunities to generate savings for travel in Restricted Fare (as opposed to Full Fare) in the following classes: Economy, Premium Economy and Business. Assuming the distribution of carriers used remains the same, the greatest potential for further savings are with the carriers SAS, Lufthansa, Emirates, Brussels Airlines and American Airlines. 10 As a result of agreement with SAS, which provides volume discounts and the discounted fare tickets Audit report no. IAIG/3103: travel management in UNOPS 8

10 Chart G: Potential Savings Opportunity by Route and Carrier, by American Express for 2012 According to the analysis made by the Travel Account holder, the top four routes account for 96 percent of the total savings opportunity: (from Copenhagen) to Newark and New York, to Geneva, to Dubai and to Brussels. Acknowledgement IAIG wishes to extend its appreciation to the management and personnel of Corporate Support Practice Group, Finance Practice Group and all those who were involved in the audit for their full cooperation. The detailed audit observations and recommendations are provided in Part III of the report. Audit report no. IAIG/3103: travel management in UNOPS 9

11 III. Detailed assessment 1. Travel framework Control activities are policies, procedures, and practices that ensure management objectives are achieved and risk mitigation strategies are carried out. 11 Observation 1 Travel planning In accordance with Organizational Directive No. 11 (rev. 3) Travel Policy paragraph 4, Headquarters Directors (HDs), Regional Directors (RDs), Operations Centre Directors (OCDs) and Project Centre Managers (PCMs) shall prepare quarterly travel plans (QTPs) for official duty travel within and outside the country/ies and/or business units under their responsibility using the form to be issued by the Director, Corporate Support Practice Group. Further, OD 11 provides that any request for official duty travel not included in the approved quarterly travel plans (ad-hoc travel) must be submitted for approval to the Deputy Executive Director (DED) in the case of RDs and HDs, and to the respective RD and the supervisor for other officials. Such requests for ad-hoc official duty travel must include the reason why the travel had not been included in the quarterly travel plan. Also, paragraph of Administrative Instruction AI/CSG/2010/02 (rev. 1) on official duty travel states that advance planning is a must when it comes to reducing the cost of travel. During the review, IAIG made several requests for QTPs from the Headquarters Practice Groups but none were made available. IAIG was informed by the focal point for the audit that at Headquarters most of the practice groups either do not prepare QTPs or do not implement them. Furthermore, IAIG noted that no ad-hoc travel requests had been submitted to the DED, despite the requirement for this submission. In the survey conducted by IAIG regarding QTPs, most of the travellers responded that QTPs are not prepared and implemented; although mandatory use of QTPs would allow for better planning and cost savings, travel is difficult to plan, and its utility is therefore limited. While IAIG appreciates the fact that not every trip can be planned well in advance, management should encourage their travellers to book as early as possible to secure the best prices. For instance, the Egencia report Global Corporate Travel Forecast: A Guide for Pricing and Negotiations in 2013 states that travellers can gain excellent savings for travel booked more than 21 days before departure. 12 Out of a sample review of 65 travel cases, IAIG found that only 18 (28%) were booked 21 days or more in advance. 11 Defined by the Committee of Sponsoring Organizations of the Treadway Commission 12 Advance Purchase savings are estimated based on average savings realized from January 2011 to August Egencia, An Expedia, Inc. Company, report on Global Corporate Travel Forecast: A Guide for Pricing and Negotiations in 2013, October Audit report no. IAIG/3103: travel management in UNOPS 10

12 Recommendation: IAIG/3103/01 Priority: High The Director, Corporate Support Practice Group, should consider reducing ticketing costs by improving the planning of travel through the following measures: a) Administer Quarterly Travel Planning for all Headquarters Units, or alternatively consider the amendment of OD 11 to mandate booking of airline tickets sufficiently in advance (preferably 21 days or more); and b) Ensure that requests for Official Duty Travel not included in approved Quarterly Travel Plans (ad-hoc travel) are submitted for the approval of the respective competent authority as per OD 11. Management Comments: Agree. Timeline: Q Observation 2 Use of management information reports Currently, there is no process for reporting on consolidated travel expenditure of UNOPS Headquarters. The present report indicates the travel expenditures as compiled by IAIG based on Atlas data. Charts H, I & J: Travel Expenditures, 2010 to Chart H: Top Five Headquarters Units Travel Expenditure ( ) Chart I: Travel Expenditure by Year ( ) IAIG 9% 10% 18% 26% 37% Executive Office SPPG CPG HRPG 31% 12% 27% 30% Chart J: Travel Expenditure by Type ( ) 14% 43% Travel Tickets - International DSA-International 43% Travel-Others As shown in Chart J above, travel expenditures primarily consist of the costs of tickets (43%), daily 13 Source: Data from ATLAS for travel POs and non-po Vouchers for the period 1 January 2010 to 31 May 2013 Audit report no. IAIG/3103: travel management in UNOPS 11

13 subsistence allowances (43%), and other travel expenses (14%). As a result of the limited use of available management and financial information, UNOPS Headquarters was constrained in its ability to oversee travel expenditure to achieve more costeffective outcomes. Capturing actual travel costs is only one aspect of the information required for an entity to effectively manage its travel costs. If travel is to be managed well, a mix of financial and nonfinancial data (e.g. frequently travelled destinations, carriers and class) is required. The issue at UNOPS Headquarters is not the lack of management information but rather the limited use that UNOPS Headquarters makes of it. Regular perusal of the Management and Financial Reports, if requested from the travel account holder (American Express), would enable UNOPS Headquarters management to perform analysis on HQ travel data. It would also allow Management to identify the sectors most travelled, the airlines most used, the average price of tickets, the split of expenditures per airline, and Savings Assessment Reports (SAM) for carbon emission each quarter. If effectively used, these information reports can also serve as a tool for monitoring the services provided by the vendor and for ensuring that the vendor adheres to the terms of the contract. These reports had not been requested from the travel account holder by the UNOPS during the period of review. Recommendation: IAIG/3103/02 Priority: High The Director, Corporate Support Practice Group, should ensure that: a) Travel expenditure reports are periodically generated and reported as necessary; b) Periodical reports are requested from the travel account holder and used for the intended purposes; such reports would cover the sectors most travelled, the airlines most used, the average price of tickets, the split of expenditures per airline, and Savings Assessment Reports (SAM) for carbon emission for each quarter. Management Comments: Agree. Timeline: Q Observation 3 Travel structure at headquarters Paragraph and Annex II of the AI/CSG/2010/02 (rev. 1) describe the roles and responsibilities of the designated Administrative/Operations Officer (in his/her role as the Travel Coordinator of a business unit or duty station) in official duty travel management. During the review, IAIG observed that a number of Travel Focal Points (TFPs) manage and process the travel at Headquarters units on behalf of the unit they belong to, or other units, in addition to their regular responsibilities. IAIG analysed the number of journeys processed by a Travel Focal Point in a practice group for the last three years as given in the chart below: Chart K: Number of travel cases processed per travel focal point ( ) Average No. of travel cases processed per travel focal point per year 14 Source: Data from Travel registration tool for the period Audit report no. IAIG/3103: travel management in UNOPS 12

14 The chart above indicates that the average number of travel cases processed per Travel Focal Point per year ranges from 19 to 92, or 0.4 to 1.8 cases per week. This information shows the travel related workload of the Travel Focal Point in the respective Headquarters units. IAIG conducted a survey to find out the preferences of the managers/travellers and the Travel Focal Point. The survey results are shown as in the charts below: Chart L & M: Preferred alternative arrangements for travel at headquarters ( ) 15 Chart L: Response of Travellers: preferred alternative arrangement for travel 11% 11% 33% 45% Other options (combination of arrangements) Corporate card for each HQs business unit Travel mgt by AMEX as in New York and Geneva Online travel mgt application developed in-house Chart M: Response of Travel Focal Points: preferred alternative arrangement for travel Dedicated Travel Section for HQ 11% 11% 22% 22% 34% Travel mgt AMEX as in New York and Geneva Online travel mgt application developed in-house Corporate card for each HQs business unit Other options The charts above indicates that none of the travellers indicated their preference for Dedicated travel sections at Headquarters, whereas 34 percent of the Travel Focal Points consider it their preferred alternative arrangement. Thirty-three percent of the travellers expressed a preference for a Corporate card for each Headquarters business unit compared to 11 percent of the Travel Focal Points. In view of the work load for each Travel Focal Point and the preference indicated by the travellers and Travel Focal Points in the survey conducted by IAIG, there is a need to have an alternative travel structure and arrangements to make the management of travel more efficient. Recommendation: IAIG/3103/03 Priority: High The Director, Corporate Support Practice Group, should review the existing travel structure at Headquarters and make recommendation for change to a more efficient structure. Management Comments: Agree. Timeline: Q Observation 4 Definition of travel concepts Paragraph 8.2 of Organizational Directive No. 11 (rev. 3) on Travel Policy states The normal route for all travel shall be the most direct and economical one. Further, Administrative Instruction AI/CSG/2010/02 (rev. 1) on official duty travel states that travel shall be by the most direct and economical route. An alternative route and mode of transportation may be approved when, in the opinion of the Authorizing Official, it is in the best interests of UNOPS. Further, the AI states that To minimize inconvenience to the staff member, UNOPS uses the principle of absolute entitlement which is based on the most direct existing air service without regard to the actual routing chosen by the traveller. 15 Source: Response to IAIG survey by Travellers (Chart L) and Travel Focal Points (Chart M) Audit report no. IAIG/3103: travel management in UNOPS 13

15 IAIG observed that the two concepts of most direct and economical and absolute entitlement are not sufficiently defined and the considerations to be taken into account when determining whether a fare complies with the policy have not been formally clarified. As such the concepts cause confusion amongst travellers and Travel Focal Points. Clarifications of the above-mentioned concepts will enable the making and approving of airline reservations to be carried out more smoothly, will enhance consistency in determining fares, and will facilitate any audits carried out to ensure that the travel management services contractor is complying with the travel policy. Recommendation: IAIG/3103/04 Priority: Medium The Director, Corporate Support Practice Group, should issue guidelines to clarify the concepts of most direct and economical travel route and absolute entitlement. Management Comments: Agree. Timeline: Q Travel service delivery Observation 5 Travel price ceilings for frequently travelled destinations As per paragraph of AI/CSG/2010/02 (rev. 1) on official duty travel, UNOPS shall provide air tickets through an authorized travel agency. However, if the staff member can demonstrate that he/she can purchase a ticket elsewhere that is at least 10 percent cheaper than the price quoted by the authorized travel agency, the agency shall be asked to match it and if they fail to do so, the staff member may be authorized to purchase the ticket from the outside source. The fare comparison shall be based on exactly the same itinerary, class of accommodation and other terms and conditions. During the review, an analysis of a sample of travel cases by IAIG (in the table below) revealed: a) Many short-distance travels within Europe (Geneva, Amsterdam, Brussels, Paris) were relatively expensive when booked through the Travel Agent compared to other booking methods (such as by travellers themselves) procured at short notice and time. b) For frequently travelled destinations there is wide variation in the ticket prices for the same class and destination. Table 1: Analysis 16 of sample cases requested by IAIG Travel destination (from Headquarters, Copenhagen) Lowest priced economy class return airfare (USD) Highest priced economy class return airfare (USD) Difference between fares (in USD and percentage) Geneva 384 1, (250%) New York 1,136 2,985 1,849 (163%) Brussels 467 1, (137%) Paris (85%) 16 Taking into account seasonal variations in ticket prices. Audit report no. IAIG/3103: travel management in UNOPS 14

16 Travel destination (from Headquarters, Copenhagen) Lowest priced economy class return airfare (USD) Highest priced economy class return airfare (USD) Difference between fares (in USD and percentage) Amsterdam (47%) The table above indicates that travel savings can be achieved if the journeys are planned well in advance and tickets are self-procured by the travellers. Furthermore, the data from the Travel Account Holder confirmed potential saving opportunities on frequently flown routings (refer to Chart G). Further, to ensure the costs of tickets are reasonable, price ceilings could be placed on these types of trips, with the stipulation that exceeding the ceiling would require an approval from the Director, Corporate Support Practice Group, or the Deputy Executive Director, UNOPS. Recommendation: IAIG/3103/05 Priority: High The Director, Corporate Support Practice Group, should: a) Analyse the frequently travelled destinations, and based on the analysis develop guidelines for price ceilings; and b) Investigate the key drivers of the differences in pricing on the major routes and consider negotiations with the principal carrier. Management Comments: Agree. Timeline: Q Observation 6 Proper management of travel, to increase benefits derived from airline agreements and accrued mileage points usage Paragraph of the AI/CSG/2010/02 (rev. 1) on official duty travel deals with Official Duty Travel Accrued Mileage Points for UNOPS and is relevant to situations where UNOPS Office holds an agreement with an airline in which UNOPS accrues free flight tickets or frequent flyer miles/points. These free flight tickets or frequent flyer miles/points may only be used for Official Duty Travel. The Travel Authorization (TA) must indicate that the travel is processed using free flight tickets or frequent flyer miles/points. It is also mandatory to enclose the correspondence from the airline. During the review, IAIG observed that UNOPS has an agreement with Scandinavian Airlines, by which UNOPS accrues free flight tickets or frequent flyer miles/points. These free flight tickets or frequent flyer miles/points can be used for Official Duty Travel. As of August 2013, there were 57,000 points available for use. However, there is currently no policy on how to use or distribute the frequent flyer miles/points among Headquarters units to economize the cost of travel tickets, and very few Travel Focal Points are aware of these benefits. In response to a question in the IAIG survey about the use of cash/credit points for making bookings, only 16 percent of the Travel Focal Points responded that they made use of these points, and 33 percent were not even aware of their existence. In view of the above, there is an immediate need to have a policy to regulate the use or distribution of the frequent flyer miles/points among Headquarters units to economize on the cost of travel tickets. Recommendation: IAIG/3103/06 Priority: Medium The Director, Corporate Support Practice Group, should issue a guideline to regulate the use and distribution of the frequent flyer miles/points among Headquarters units, in order to increase the benefits derived from the airline agreements and the frequent flyer miles/points. Management Comments: Agree. Timeline: Q Audit report no. IAIG/3103: travel management in UNOPS 15

17 Observation 7 Contractual arrangements for travel services UNOPS Headquarters in Copenhagen has a non-exclusive long term agreement (Long Term Agreement No ) with four travel agencies 17 for the provision of travel management services to consolidate its travel requirements, in order to achieve cost efficiency and an improved service that meets the needs of UNOPS. The contract also includes the provision of Management Information Services. The current contract was signed in April 2009 and is valid until April 2014, extendible for one-year periods subject to satisfactory performance. UNOPS Headquarters also has an agreement with Van Breda International (UNOPS Contract No , effective from January 2011 and valid until December 2013) for the provision both of travel insurance services for all UNOPS personnel on duty travel, and of Global Travel Account Services through American Express. The following chart shows the share of travel requests handled by each travel service provider along with the online purchase of tickets by UNOPS personnel: Chart N: Share of travel requests handled ( ) 18 5% 5% Net Travel 35% Online purchase 15% Via Travel Vejle Rejser 32% Carlson Wagonlit The survey conducted by IAIG shows that UNOPS travellers and the Travel Focal Points are generally satisfied with the services provided by the travel service provider as shown in the chart below: Chart O: Satisfaction levels with quality of service provided by the current LTA-holders 19 Responses of Travellers Responses of Travel Focal Points 44% 56% Very satisfied 20% Satisfied 20% 60% Satisfied Very satisfied Extremely satisfied 17 Net Travel, Via Travel, Vejle Rejser and Carlson Wagonlit 18 Source: data from travel registration tool for the period Source: Response to IAIG survey by Travellers Audit report no. IAIG/3103: travel management in UNOPS 16

18 However, IAIG observed that UNOPS management of its relationship with the travel services provider required attention, particularly for ensuring a more pro-active contract management role for the Travel Unit in relation to the travel service provider. As per Article 6 Supplier reporting of this Long Term Agreement No with the travel services provider, at the beginning of each quarter the supplier shall provide a quarterly sales report covering the previous quarter to UNOPS. These reports are to include use of airline, ticket routing, ticket fee, additional charges and total ticket pricing. However, these supplier reports are neither provided by the travel service provider nor requested by UNOPS. Further, UNOPS was not requesting the full range of services that are available under the contract, with the result that the vendor s role was limited mainly to issuing tickets and pursuing refunds. Under the contract, however, the supplier is required to: (i) undertake or assist UNOPS to obtain the most favourable prices and conditions, which could include conducting negotiations with airlines based upon volumes; (ii) provide information about benefits and restrictions, such as complimentary transit facilities, free airport transfers, and baggage allowance; and (iii) provide information about upgrades of travel class for VIP passengers, club facilities at transfer points and guidance on complaints about lost baggage. Recommendation: IAIG/3103/07 Priority: Medium The Director, Corporate Support Practice Group, should ensure that UNOPS requests and receives the full range of services specified in the contract with the travel services provider, including commitments to: a) Provide quarterly reports on use of airline, ticket routing, ticket fee, additional charges and total ticket pricing; b) Undertake or assist UNOPS to obtain most favourable prices and conditions, which could include conducting negotiations with airlines based upon volumes; c) Provide information about benefits and restrictions, such as complimentary transit facilities, free airport transfers, and baggage allowance; and d) Provide information about upgrades of travel class for VIP passengers, club facilities at transfer points and guidance on complaints about lost baggage. Management Comments: Agree. Timeline: Q Observation 8 Insurance for official duty travel UNOPS Headquarters has an agreement (UNOPS Contract No ) with Van Breda International for the provision of travel insurance services for all UNOPS personnel on duty travel which is valid until December According to this agreement, UNOPS shall pay the contractor a deposit premium of USD based on an estimated 20,555 travel days per year (2009 figures). The premium will be adjusted on the completion of each year depending on the actual number of travel days undertaken by the UNOPS personnel per insurance year and as reported to the contractor by UNOPS. During the review, IAIG observed that the travel firms (as per their long term agreement with UNOPS) are charging Liability Insurance of DKK 18 per ticket in addition to the service fee and cost of the ticket. Since UNOPS already has an agreement with Van Breda to take care of insurance liabilities of the personnel during the official duty travel, the charging of Liability Insurance by the travel firms needs examination. IAIG estimated a potential saving of USD (for the period ). Recommendation: IAIG/3103/08 Priority: Medium Audit report no. IAIG/3103: travel management in UNOPS 17

19 The Director, Corporate Support Practice Group, should ensure that UNOPS is not subjected to double payment of insurance charges for its personnel on official duty, one through the travel insurance services and the other through the travel firms. Management Comments: Agree. Timeline: Q Travel information management Observation 9 Travel registration tool or an appropriate electronic platform as an automated travel system As per paragraph of AI/CSG/2010/02 (rev. 1) on official duty travel, the travel authorization (TA) number must be obtained from the travel registration tool (TRT) under each region. Any approvals or justifications obtained for an upgrade of standard of travel shall be attached to the TA. Copies of the approved TA and quotes received must be kept on file by the designated Administrative/Operations Officer. Copies of signed TAs and quotes received can be uploaded as an attachment on the TRT. Further, as per paragraph of AI/CSG/2010/02 (rev. 1) on official duty travel, the designated Administrative/Operations Officers must record in the TRT the approved travel route using the threeletter IATA (International Air Transport Association) airport codes and the class of travel. It is through the TRT (and the data entered into it) that UNOPS will be able to report on its carbon emission from air, rail and car travel. This is mandatory as of January During the review, IAIG observed a number of deficiencies such as missing details about the travel (e.g. price of the ticket), incorrect information regarding TRIP 20 clearance and duty station, different names for the same travel agencies given by different focal points, and different nomenclature for the travel itineraries. TRT is not being used for uploading signed TAs and quotes received as attachments nor does it serve its intended purpose as a monitoring tool for travel insurance, security and CO2 emissions. In response to the survey question about enclosing supporting documentation in TRT, all the Travel Focal Points stated that they do not upload documents into the TRT. In response to another question about improving the TRT, the travellers responded that the TRT can be used for generating online travel requests, processing travel authorizations, integrating TRT with ERP, and noted its use as a real time online travel booking tool. In view of the IAIG observation and response of the stakeholders, there is a need for the TRT to be utilized for generating travel requests and preparing travel authorizations, and as a single point repository of documents related to travel as per the AI, and as a monitoring tool for travel insurance, security and CO2 emission. Monitoring CO2 emission is directly related to the Sustainability agenda of UNOPS Strategic Plan , in which UNOPS plans to particularly focus on managing for and reporting on sustainability. Eventually the TRT should become an integral part of UNOPS ERP, and all form-filling and approvals should be done online. The uniform adoption of the TRT would assist in a reduction in (i) the time employees spend preparing travel requests; (ii) the time supervisors spend reviewing travel requests; (iii) the time administrative staff spend authorizing requests; and (iv) overhead costs (e.g. use of paper). The IAIG review indicated that the use of TRT as an automated travel system would provide significant opportunities for reducing the number of steps and streamlining the format of documents, so as to save on time and costs. IAIG has identified 14 steps which are duplicated or redundant (please refer to Chart B: the purple highlighted processes), and which could safely be omitted without significant risk to the travel 20 TRIP is the Travel Request Information Processing system, which allows all personnel eligible under UN security arrangements to process security clearances online Audit report no. IAIG/3103: travel management in UNOPS 18

20 management process. IAIG has also identified at least four documents that can be moved to an electronic format to save time and enhance data retention. Recommendation: IAIG/3103/09 Priority: High The Director, Corporate Support Practice Group, should ensure that travel processes are supported by an appropriate electronic platform for: a) Generating travel requests and preparing travel authorizations; b) Operating as a single point repository of documents related to travel as per AI/CSG/2010/02 (rev. 1) on official duty travel ; c) Functioning as a management information system; d) Serving as a monitoring tool for travel insurance and security; and e) Serving as a reporting tool for CO2 emission in accordance with AI/CSG/2010/02 (rev. 1) on official duty travel. Management Comments: Agree. Will be implemented in connection with the revised ERP strategy. Audit report no. IAIG/3103: travel management in UNOPS 19

21 Annex 1. Definitions of audit terms ratings and priorities A. Audit ratings Effective 1 January 2010, the internal audit services of UNDP, UNFPA, UNICEF, UNOPS and WFP adopted harmonized audit rating definitions, as described below. IAIG assesses the entity under review as a whole as well as the specific audit areas within the audited entity: Satisfactory Internal controls, governance and risk management processes were adequately established and functioning well. No issues were identified that would significantly affect the achievement of the objectives of the audited entity. Partially Satisfactory Internal controls, governance and risk management processes were generally established and functioning, but needed improvement. One or several issues were identified that may negatively affect the achievement of the objectives of the audited entity. Unsatisfactory Internal controls, governance and risk management processes were either not established or not functioning well. The issues were such that the achievement of the overall objectives of the audited entity could be seriously compromised. B. Priorities of audit recommendations The audit recommendations are categorized according to priority, as a further guide to management in addressing the issues in a timely manner. The following categories of priorities are used: High: Prompt action is considered imperative to ensure that UNOPS is not exposed to high risks (that is, where failure to take action could result in critical or major consequences for the organization). Medium: Action is considered necessary to avoid exposure to significant risks (that is, where failure to take action could result in significant consequences). Low: Action is desirable and should result in enhanced control or better value for money. Low priority recommendations, if any, are dealt with by the audit team directly with the management of the entity under review, either during the exit meeting or through a separate memo subsequent to the fieldwork. Therefore, low priority recommendations are not included in this Report. Audit report no. IAIG/3103: travel management in UNOPS 20

22 Annex 2. Summary of responses to the survey questionnaire a) Summary of survey questionnaire responses from Travel Focal Points Question 1 As a travel focal point, which steps of processing a travel request are challenging and require further improvement? 2 Which steps in the processing of travel claims by Finance need further improvement? 3 For the travel process steps: 1. Travel Request template; 2. Travel offer; 3. TA signatures; 4. Recording receipt in Atlas; 5. Finance payment. Do you feel these steps are being followed properly? If no, please explain. 4 How do you file the supporting documents related to processing of travel? Consolidated response Lack of updates and guidance Process should be simplified and online Travel requests should be submitted well before travel schedule Support for visas should be streamlined especially in cases where country of travel destination does not have consulate//high commission or Embassy. Clarity on the interpretation of the travel policy Guidance on implementation of the travel policy Need for better service from the travel agent Incomplete/insufficient information from traveller AMEX payment requires PO and TA to be submitted simultaneously Lack of awareness among travellers about the travel rules and regulations and their non-responsiveness which prolongs the processing time. The supervisor-supervisee (travel focal point) role resulting in difficult situations Archiving of travel documents for audit trail purposes Four out of ten respondents stated they are satisfied with the process. The others mentioned the following points: Payment process to AMEX is unclear Faster processing of payments. Monitoring of payments according to submission dates from Travel Focal Points without partiality to traveller or units. Duplication of work by having to provide multiple documentation and endorsement notations. Lack of clarity which supporting documents should be submitted to Finance. Cash credit points Amex payment process Inconsistency in use of the travel request form Travel request form should include more details to match with the requirements of the TA. The step of approval of POs before receipting is missing Requests are made often with short notice and vague. As the quotes (reservations) only are valid for approx 24+ hrs, the TA needs to be signed and ready very close to when the travel request is made. Time-pressure and long procedures/bureaucracy No formal training with becoming a travel focal point and thus how travel focal points obtain offers and complete the entire process is not consistent Travel authorization roles and responsibilities are unclear Direct communication is often not taken between the traveller and person signing the TA. There is a lack of consistency in requiring and providing documentation to process travel payments. M-drive 6 respondents Hardcopy file 3 respondents Only inbox 1 respondent H-drive- 1 respondent No filing- 2 respondents Audit report no. IAIG/3103: travel management in UNOPS 21

23 Question 5 Do you enclose supporting documents into the Travel Registration Tool? 6 Do you make use of the cash/credit points in the corporate credit card for making bookings? 7 Background: Currently, UNOPS HQ has four LTA-holders for Official Duty Travel; JTB (Net Travel), Carlson Wagonlit, Vejle Rejser, Via Travel. Question: How satisfied are you with the quality of the service delivered by the current LTA-holders? 8 In your opinion do we need an alternative arrangement such as: 9 What reports are generated on travel activities? How frequently? 10 Which aspects of information management on travel data could be further improved? Consolidated response All respondent answered they do not upload documents into the TRT, with one exception (SPPG) when it entailed group travel. One of the reasons given for non-use of TRT is that it would take up too much space on SharePoint. Only 2 out of 12 respondents answered they used the cash/credit points. Several respondents mentioned specifically they were not even aware of their existence (4 out of 12). Please refer to the Chart O in this report. Please refer to Chart M in this report. None of the Travel Focal Points were aware of any reporting on travel except for (quarterly travel plans) and mission TORs/reports. Updates on Travel Policy, travel relevant information (like on the industry) Streamlining of documentation procedures Regular / Periodic Administrative meetings on Travels with transparent dissemination of information to all travel focal points. Webinars and workshops with UNOPS global colleagues to discuss case studies or travel policy rules and regulations. Better filing system Better analysis of costs Develop an online Travel Tool TRT should be made more user-friendly Audit report no. IAIG/3103: travel management in UNOPS 22

24 b) Summary of survey questionnaire responses from the Travellers Question 1 Have you received sufficient guidance on travel rules and regulations? 2 Which aspects of the travel rules could be improved or made more efficient? 3 Background: As per the UNOPS Travel Policy (OD 11, paragraph 4) Headquarters Directors (HDs), Regional Directors (RDs), Operations Centre Directors (OCDs) and Project Centre Managers (PCMs) shall prepare quarterly travel plans for Official Duty Travel within and outside the country/ies and/or business units under their responsibility using the form to be issued by the Director, Corporate Support Group. Other categories of UNOPS personnel may be requested by supervisors, at their discretion, to submit quarterly travel plans. Question: Does your Business Unit prepare quarterly travel plans? Consolidated response Guidance is needed on travel management for travellers in terms of frequently asked questions, updates on intranet site for visa requirements and use of UNLP, and expected roles and responsibilities of the traveller. Simplification of the travel processing and its consistent application across the organization is needed. The quarterly travel plan is not prepared as per requirements of OD How does your Business Unit monitor the quarterly travel plan? The monitoring of implementation of Quarterly Travel plan is not being done. 5 Do you think that the quarterly travel plan should be made mandatory for all HQ units (including for all traveling personnel) to allow for efficient planning? 6 Has any training needs assessment been done and training plan put in place for personnel managing travel activities during the years ? 7 Background: As per the UNOPS Travel Policy Administrative Instructions, the Travel Focal Point of a business unit shall prepare the Travel Authorization (TA) form for signature of the travelling staff member, the staff member s supervisor and the Authorizing Officer. The TA number must be obtained from the Travel Registration Tool ( /Global/CSG/ODT/Pages/Travel Registration.aspx). Question: The information entered by the travel focal point into the Travel Quarterly Travel Plan if made mandatory would allow for better planning and cost savings, though travel is difficult to plan, and its utility is therefore limited. There is need for a training plan based on training need assessment on travel management. The purpose of travel registration tool is not clear to the majority of the travellers and it was revealed that the tool doesn't function properly to serve its intended purpose as a monitoring tool for travel insurance, security and CO2 emission. Registration Tool; for which purpose is the data collected? 8 How could the Travel Registration Tool be further improved? The travel registration tool (TRT) can be used for online travel request, travel authorizations processing and generating, integrating TRT and its use as real time online travel booking tool. 9 Background: Currently, UNOPS HQ has four LTA-holders for Official Duty Travel; JTB (Net Travel), Carlson Wagonlit, Vejle Rejser, Via Travel. Question: How satisfied are you with the quality of the service delivered by the current LTA-holders? Please refer to Chart O in this report. 10 In your opinion do we need an alternative arrangement such as: Please refer to Chart L in this report. Audit report no. IAIG/3103: travel management in UNOPS 23