2016 Presidential Campaign: Actions Needed to Address U.S. Secret Service Overpayments for Travel Costs

The Secret Service incurs millions of dollars in travel expenses to provide security during the fast-paced operational tempo of a presidential campaign. In connection with the 2016 presidential campaign, the Secret Service provided protection for four presidential candidates, two vice presidential candidates, and six of the candidates' family members.

GAO was asked to review the Secret Service's travel-related expenses for the 2016 presidential campaign. This report examines (1) how much the Secret Service incurred in travel-related expenses, and (2) the extent to which travel-related payments and reimbursements were made in accordance with laws, regulations, and policies. GAO analyzed Secret Service data to determine the travel expenses incurred by the agency for the 2016 presidential campaign. GAO also randomly selected 40 overnight trips to assess the Secret Service's compliance with provisions of its lodging policies and the Federal Travel Regulation. GAO analyzed the Secret Service's payments to campaign committees to determine whether committees were reimbursed the correct amounts for charter flights.

The U.S. Secret Service's (Secret Service) travel expenses during the 2016 presidential campaign totaled approximately $58 million. Of the $58 million, $17.1 million was for reimbursements to the four campaign committees for chartered aircraft flights. In the case of campaign travel, Secret Service special agents often fly with protected individuals on aircraft chartered by the campaign committees. The Secret Service reimburses the campaign committees for the number of seats occupied by special agents on board each charter flight.

For the 40 overnight trips GAO reviewed, the Secret Service generally followed its policies and regulations for lodging payments. However, GAO found that the agency overpaid the campaign committees at least an estimated $3.9 million when reimbursing them for special agents' seats on charter flights. Since at least 1977, the Secret Service's policy has been to pay the lower of two fares when reimbursing campaign committees for special agents' travel on chartered aircraft flights. Specifically, the Secret Service is to pay the lower of the following two fares: the lowest commercially available first-class airfare, or the pro rata fare—the cost of the agent's seat on the charter flight calculated by taking the total cost of the charter divided by the number of passengers on board. However, during the 2016 presidential campaign, Secret Service officials misinterpreted a Federal Election Commission regulation, and as a result, did not conduct the comparison. Instead, the Secret Service solely paid the pro rata fare to the campaign committees. Eight months before the end of the 2016 presidential campaign, Secret Service officials determined the interpretation was erroneous, but did not ensure the agency reverted to its long standing policy. During these 8 months, 66 percent of all campaign-related flights with special agents on board were taken.

Federal agencies are generally required to collect on debts that have been determined by an appropriate official of the federal government to be owed to the United States. Debts include overpayments. Pursuing debt collection, however, will require the Secret Service to calculate the specific amount it overpaid to the campaign committees and determine how to proceed with seeking repayment from the various committees, as appropriate.

GAO is making five recommendations, including that the Secret Service should (1) calculate its overpayments to the campaign committees for special agents' seats on chartered aircraft flights, and (2) determine how it should proceed with respect to collecting on identified debts. The Department of Homeland Security concurred with the recommendations and identified actions underway to address them.

The U.S. Secret Service (Secret Service), a component within the  Department of Homeland Security (DHS), incurs millions of dollars in  travel expenses to provide protection during the fast-paced operational  tempo of a presidential  campaign. The Secret Service is authorized to  protect major presidential and vice presidential candidates, and within  120 days of a general presidential election, their spouses. In addition,  protection is provided  for children or others not specifically identified  in  statute when directed by the President. Accompanying each protected  individual,  among others, are special agents who provide  24/7 protection,  and advance teams who provide site security. Secret Service special  agents often fly with protected individuals  on aircraft chartered by the  campaign committees and the agency reimburses the committees for the  number of seats occupied by special agents  on board each charter flight.  Candidates often visit multiple cities per day and multiple states per week,  and the necessary Secret Service protective assets must always arrive  and deploy before each visit.

You requested that we review the Secret Service’s travel expenses during  the 2016 presidential campaign. Specifically, this report addresses the  following questions:  (1) How much did the Secret Service incur in transportation, lodging, and other travel-related expenses when providing protection during the 2016 presidential campaign? (2) To what extent did the Secret Service reasonably assure that payments and reimbursements for travel-related protection expenses were made in accordance with applicable laws, regulations, and  policies during the 2016 presidential campaign?

To determine how much the Secret Service incurred in travel-related  expenses, we obtained expense data from the Secret Service for the  2016 presidential campaign. Specifically, we reviewed expenses for the  12 protected individuals associated with campaign committees for the  following Presidential candidates: Senator Bernie Sanders, Dr. Benjamin  Carson, Mr. Donald Trump, and Secretary of State Hillary Clinton. We  analyzed the travel expenses incurred by the Secret Service for each of  the protected individuals (a total of 12) to determine the total expenses for  each campaign committee and for the 2016 presidential campaign as a  whole. Additionally,  we determined the amount of the total travel-related  expenses that were reimbursed to the campaign committees for special  agents’ seats on aircraft chartered by the committees. We determined  that the expense data were sufficiently reliable after, among other things,  discussing with Secret Service officials how the data are entered and  maintained in the agency’s financial systems, reviewing the data for  obvious errors and anomalies, and comparing the reimbursement data to  data campaign committees reported to the Federal Election Commission  (FEC).

To determine the extent to which the Secret Service’s payments and  reimbursements for travel-related protection expenses were made in  accordance with applicable laws, regulations, and policies, we analyzed  the Secret Service’s lodging payments and charter aircraft  reimbursements to the campaign committees. Of the 962 overnight trips  taken during the 2016 presidential campaign, we randomly selected 40— 10 for each of the 4 presidential candidates—to assess the Secret  Service’s compliance with its internal lodging policy and select provisions  of the Federal Travel Regulation (FTR). Although the results of our  analysis are not generalizable to all overnight trips taken during the 2016  presidential campaign, it provided us insight to the Secret Service’s  compliance with select provisions of its lodging policy and the FTR. With  regard to whether the Secret Service reimbursed the four campaign  committees the correct amounts for special agents’ seats on campaign  chartered aircraft, we compared the Secret Service’s payments to the  committees to the agency’s charter aircraft reimbursement policy. To  estimate whether and, if so, by how much the Secret Service incorrectly  paid the campaign committees for special agents’ seats on chartered  aircraft flights, we selected a generalizable stratified random sample of  650 flight segments from the 2,318 flight segments taken from November  1, 2015 through the end of the 2016 presidential campaign that had an  identifiable airport.

To determine whether the Secret Service followed its policy with regard to  accepting and reviewing chartered aircraft invoices submitted by the  campaign committees, we compared the agency’s policy requirements to  all 76 invoices submitted by the four campaign committees. Further, we  used the Standards for Internal Control in the Federal Government to  assess whether the Secret Service’s requirements for chartered aircraft  invoices, and the review of the invoices, are specific enough to help  ensure that the Secret Service is making correct reimbursements for  chartered aircraft flights. Additional  details regarding our scope and  methodology are provided in appendixes I and II.

We conducted this performance audit from April 2017 to May 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Authorization of Secret Service Protection during Presidential Campaigns

During the 2016 presidential campaign, a Secret Service detail was to be  activated once a candidate for the Office of the President or Vice  President requested protection, met the requirements for major candidate  status (e.g., entered at least 10 state primaries), and received authorization by the Secretary of Homeland Security after consultation  with an advisory committee. Under the direction of the Secretary of  Homeland Security, the Secret Service is authorized to provide protection  for spouses of major presidential and vice presidential candidates within  120 days of the general presidential election. There is no statute that  addresses the protection of candidates’ children during the campaign.  During the 2016 presidential campaign, the Secret Service provided  protection for certain children of candidates at the request of the  President. According to Secret Service officials, the Secret Service has  historically provided protection for individuals not specifically identified in  statute when directed by the President. In connection with the 2016  presidential campaign, the Secret Service provided protection for 12  individuals—4 presidential candidates, 2 vice presidential candidates, and  6 of the candidates’ family members. Figure 1 below shows the dates of  protection through Election Day, November 8, 2016.

Role of the Secret Service in Providing Presidential Campaign Protection

Secret Service protective operations have evolved over the years.  Originally, protection involved special agents serving as bodyguards.  Protection now includes not only special agents in close proximity to the  protected individual,  but also advance security surveys of locations to be  visited, coordination with state and local law enforcement entities, and  analysis of present and future threats. Site surveys and threat  assessments help the Secret Service determine the resources and assets  needed to accompany each candidate and other individuals protected  during the presidential campaign. These resources and assets, among  other things, generally include: special agents who provide 24/7 protection while on detail; advance teams who provide site security;

Explosive Ordnance Disposal and other technical support personnel  (e.g., counter-surveillance and counter sniper personnel); magnetometer screening capabilities; and protective intelligence personnel who investigate threats.

Federal law provides for agencies to pay for or reimburse transportation  and lodging expenses for their employees when they are traveling on  official business. It further directs the General Services Administration  (GSA) to issue regulations governing this travel. The FTR issued by  GSA is applicable to Secret Service special agents’ transportation and  use of hotel rooms when traveling during presidential campaigns to  protect candidates and their family members.

Transportation. According to the FTR, coach-class service is to be  utilized unless an agency determines that an exception is warranted. For  example, an exception may be granted to allow a special agent to use  business class accommodations when the protected individual  is doing  the same and security demands warrant it. In the case of presidential  campaign travel, the Secret Service may also accompany protected  individuals aboard chartered aircraft. The Secret Service reimburses  campaign committees for the seats occupied by its special agents. In  1977, we were asked to review the Secret Service’s reimbursement  method, and in that decision stated that GAO did not object to the method  used by the Secret Service as long as it was used consistently and the  amount reimbursed did not exceed the first-class airfare.

Lodging and other use of hotel rooms. The Secret Service utilizes  hotel rooms for various purposes when protecting a candidate. The  purpose of the room dictates the authority the Secret Service relies on to  authorize payment and the related requirements. Hotel rooms used  exclusively for special agent overnight sleeping facilities are governed by  the FTR. The FTR allows agencies to pay for lodging based on per diem  allowances set by GSA for the applicable location and date or the actual  expenses of the travel. Actual expense allowance, which can be in  excess of the per diem rate, is permitted for a variety of reasons, such as  costs escalating due to special events (e.g., sporting events or disasters)  or because of mission requirements. However, the maximum amount  that an employee may be reimbursed under the actual expense  allowance method is limited to 300 percent of the applicable per diem  rate.

The Secret Service also utilizes hotel rooms for operational purposes. For  example, the Secret Service may use a room as a command center or  reserve rooms adjacent to the protected individual  to better secure the  individual. In addition, to meet operational security demands, the Secret  Service may require a certain number of special agents to stay in the  particular hotel that the protected individual is staying and within certain  proximity to the individual. The legal authorities the Secret Service relies  on to pay for these kinds of rooms do not limit how much the agency can  pay.

Secret Service’s 2016 Presidential Campaign Travel Expenses Totaled Approximately $58 Million, Including $17.1 Million in Reimbursements to the Campaign Committees

The Secret Service’s travel expenses for the 12 individuals protected  during the 2016 presidential campaign totaled approximately $58 million,  according to our analysis of Secret Service data. Travel expenses  included airfare, vehicle rentals, hotel rooms, meals and incidental  expenses, and baggage charges for special agents accompanying  protected individuals. The $58 million in travel expenses was used by  the Secret Service to support 3,236 travel stops made by the 12 protected  individuals throughout the presidential campaign. The breakdown of  these expenses and number of travel stops by campaign committee and  protected individual  are shown in figure 2 below.

Of the $58 million the Secret Service incurred in 2016 presidential  campaign travel expenses, $17.1 million was for reimbursements to the 4  campaign committees for 2,548 chartered aircraft flights. In the case of  campaign travel, Secret Service special agents often fly with protected  individuals on aircraft chartered by the campaign committees. The Secret  Service reimburses the campaign committees for the number of seats  occupied by special agents on board each charter flight. Figure 3 below  shows the amount and number of flights for which the Secret Service  reimbursed each of the campaign committees.

Secret Service Did Not Always Follow its Travel Policies, Resulting in Overpayments of at Least an Estimated $3.9 Million

Secret Service Generally Followed its Policies and Applicable Regulations for Lodging Payments during the 2016 Presidential Campaign for the Trips Reviewed

We reviewed special agents’ lodging expenses while accompanying  individuals protected during the 2016 presidential campaign on 40  randomly selected overnight trips. Our review found that (1) for most  trips—30 of 40—the documented hotel expenses were within GSA per  diem lodging rates, (2) the Secret Service generally followed its policy of  requiring a lodging variance (i.e., waiver) for any hotel rooms exceeding  the GSA lodging rate for that location, and (3) the Secret Service did not  exceed the maximum amount allowed for lodging for these trips.

The Secret Service required field offices responsible for booking hotel  rooms to request and submit a waiver for any room that may exceed the  designated GSA lodging rate by any amount. Our review of the receipts  for hotel room expenses incurred by the Secret Service found that each  trip involved multiple special agents staying in multiple rooms.  Specifically, of the 40 trips we reviewed, 30 included hotel rooms that  were within GSA lodging rates and 9 included hotel stays exceeding the  GSA lodging rate. The Secret Service was unable to locate a hotel bill for  1 trip and we therefore were unable to determine the rate paid for that  trip.

In accordance with Secret Service policy, special agents submitted  waivers to the agency’s Logistics Resource Center (LRC) for all 9 hotel  stays exceeding the GSA lodging rate. According to LRC officials, before  approving a waiver, they generally wanted to know how many alternative  hotels were contacted, whether any hotels were available at or below the  GSA lodging rate, and whether staying at a hotel at or below the GSA  lodging rate would incur additional expenses that would negate the  savings. For example, if a rental vehicle would be required, use and  parking of the vehicle may have resulted in total costs that exceeded the  price of the more expensive hotel. According to LRC officials, in order to  spend travel money judiciously, some special agents stayed at hotels  nearby the protected individual’s hotel that had rates at or closer to the  GSA lodging rate.

Under the FTR’s actual expense reimbursement method, agencies may  pay up to 300 percent of the applicable total GSA per diem allowance— the GSA established rates for (1) lodging and (2) meals and incidental  expenses—for an employee’s daily expenses. However, the agency is to  subtract any allowance granted for meals and incidental expenses from  the total, with the remainder being available for lodging. DHS and  Secret Service policy, however, restricts the 300 percent actual expense  allowance for lodging to 300 percent of the GSA lodging rate only.  Consistent with DHS and Secret Service policy, none of the hotel rates  paid exclusively for lodging in the 40 trips we reviewed exceeded the  applicable GSA lodging rate by more than 300 percent. As a result, we  determined that the Secret Service’s expenditures for lodging for the trips  we reviewed were consistent with its policies and applicable regulations.

Secret Service Did Not Follow its Policies for Chartered Aircraft Flights and Did Not Thoroughly Review Invoices Prior to Payment

Secret Service Overpaid the Campaign Committees an Estimated $3.9 Million or More for Chartered Aircraft Flights

As discussed earlier, as part of their mission to protect presidential  candidates, Secret Service special agents frequently accompany  candidates on chartered aircraft provided by the presidential campaigns.  The Secret Service is to later reimburse the candidate’s campaign  committee for the cost of having special agents fly on those planes. The  Secret Service’s policy for determining the amount to reimburse has been  used since at least 1977. Under this policy, the Secret Service is to pay  the lower of two applicable fares when reimbursing the campaign  committees for special agents’ travel on chartered aircraft flights.  Specifically, according to the policy the Secret Service is to compare the  lowest commercially available first-class airfare for a flight segment (one  airport to another airport) to the pro rata fare of the charter (total charter  cost divided by the number of passengers). The Secret Service is then to  reimburse the campaign committee for the lower of the two fares. The  following text box includes an example of the pro rata fare calculation.

In July 2015, an attorney from the law firm representing the Hillary for  America Committee sent Secret Service Financial Management Division  (FMD) officials an e-mail stating that in their view, the reimbursements for special agents’ seats should be the pro rata fare based on an FEC  regulation. In response, in August 2015, the Secret Service’s Office of  the Chief Counsel made a decision to agree with the interpretation of this  law firm. As a result, the Secret Service ceased to adhere to its  longstanding reimbursement policy and agency officials were directed to  use the pro rata calculation method for reimbursing all campaigns for  agent airfares. Consequently, the Secret Service did not conduct the  comparison between first-class and pro rata fares during the 2016  presidential campaign. Instead, the Secret Service solely paid the pro rata  fare to the campaign committees.

In March 2016, in response to a congressional inquiry about presidential  campaign charter flight reimbursements, the Office of the Chief Counsel  determined that its August 2015 decision was a mistake. Specifically, the  Office recognized that the FEC regulation at issue did not apply to the  Secret Service’s use of chartered aircraft. According to the Office of the  Chief Counsel, they notified an official in the Office of Protective  Operations, which collects submissions for reimbursements from the  protected individual  or the related campaign committee. However, the  Office of the Chief Counsel did not notify LRC, which is to obtain the first- class airfares for comparison from the Secret Service’s travel agency.  Further, the Office of the Chief Counsel was uncertain but believed FMD,  which issues payments for the flights, was notified. FMD officials told us  that they were not notified. As a result, the Secret Service continued to  reimburse the campaign committees the pro rata fares for the remainder  of the 2016 political campaign (i.e., through mid-November 2016).

Despite being aware of the error for eight months before the end of the  2016 presidential campaign that the pro rata fare should be compared to  the lowest available first-class airfare, the Office of the Chief Counsel did  not ensure the agency reverted to its long standing policy. During this 8  month period, the Secret Service accompanied protected individuals on  1,671 (66 percent) of the 2,548 total campaign-related flight segments. As  a result of solely reimbursing the pro rata fare instead of reimbursing the  lower of the pro rata fare versus the lowest commercially available first- class airfare, we estimate based on our sample of 650 flight segments  that the Secret Service overpaid the 4 campaign committees at least $3.9  million for special agents’ seats on chartered aircraft.

Federal agencies are generally required to try to collect on debts— including overpayments—they determine are owed to them. A federal  debt or claim is any amount of funds that has been determined by an  appropriate official of the federal government to be owed to the United  States. It includes, without limitation, overpayments. Under the federal  debt collection authorities as provided in 31 U.S.C. chapter 37, federal  agencies are required to try to collect on claims arising out of their  activities. However, they have the authority to compromise (i.e., accept  less than full value) claims, or suspend or end collection, such as when  the cost of collecting the claim is likely to be more than the amount  recovered.

In response to our finding that the Secret Service had overpaid for travel  on chartered aircraft, Secret Service officials told us in February 2018 that  they planned to take action to determine the overpayment amounts and  seek refunds from the campaign committees. In light of the problems we  discuss in appendix II regarding information on aircraft flights provided by  the campaign committees and available historical data on airfares, Secret  Service officials told us they were attempting to calculate the  overpayments and would weigh the feasibility and costs of collecting  refunds. However, as of April 2018, the Secret Service lacked specific  plans, timeframes, and milestones for calculating the amounts of  overpayments to the campaign committees and making key decisions on  how and the extent to which the Secret Service will proceed with  collections. Making such determinations can help ensure the Secret  Service is complying with applicable federal law and recovering funds that  could be used to support its protective operations or deposited into the  general fund of the United States Treasury as appropriate.

Secret Service Did Not Adhere to Its Directive on Policy Revisions

According to Secret Service officials, the decision to change the  reimbursement calculation method in August 2015 was inconsistent with  the Secret Service’s directive on policy revisions. Specifically, the Secret  Service’s directive on policy revisions states that the “responsible  office”—FMD in this case—is accountable for ensuring policies are  current and accurate. In addition, this office is to review, research, and  revise the policy, if such a revision is deemed necessary. Further, all  significantly affected offices and divisions of the Secret Service, including  members of the Secret Service’s Executive Resources Board, are to be  provided the opportunity to read and comment on the changes, among  other required actions. See figure 4 for a summary of key steps in the  Secret Service’s policy creation, revision, and issuance process.

According to Secret Service officials, however, the process outlined in the  directive on policy revisions was not followed in August 2015. As a result,  the decision to change the reimbursement calculation method was not  fully vetted or reviewed by all members of the Secret Service’s Executive  Resource Board as would be required under the directive on policy  revisions. According to agency officials and confirmed in communications  we reviewed, the Office of the Chief Counsel misinterpreted the regulation  and directed that the erroneous interpretation be followed. The official  leading FMD at the time, who was in the role on a temporary basis,  adhered to the Office of the Chief Counsel’s interpretation of the  regulation because the matter was legal in nature. Agency officials further  added that the increased operational tempo (i.e., heavy workload) at the  time may have resulted in a failure to adhere to the Secret Service’s  directive on policy revisions.

An important role within the Secret Service’s policy creation and revision  process is the directives control point. The directives control point is to  help develop and implement policy that is clear, enforceable, and  effective. In addition, the directives control point provides guidance for  filing, structuring, and organizing policy instruments. Standards for  Internal Control in the Federal Government states that management  should design control activities to achieve objectives and respond to  risks. Control activities are the policies, procedures, techniques, and  mechanisms that enforce management’s directives to achieve the entity’s  objectives and address related risks. Secret Service officials stated that  the agency could better ensure that its existing directive for policy  revisions is followed by requiring that its directives control point be  notified of any legal advice or direction proposed by the Office of the  Chief Counsel that could modify or amend agency policy. By requiring—in  policy and practice—that the Secret Service’s directives control point be  notified when the Office of the Chief Counsel provides advice to offices  that is likely to result in policy changes, the Secret Service could better  ensure that operational changes inconsistent with existing policy are not  made without the full consideration of all affected parties. Moreover, it  could reduce errors and the potential for unnecessary costs associated  with decisions that do not go through the required review process.

Secret Service Did Not Ensure the Accuracy of Charter Flight Invoices Prior to Reimbursing Campaign Committees

Secret Service policy requires that protected individuals—and by  extension their campaign committees—seeking reimbursement for  special agents on chartered aircraft flights to submit an invoice with the  following information:  (1) Name, address, and bank account information for the protected  individual.  (3) Date(s) of charter.  (4) Itinerary by flight segment (the three letter airport code should be  provided for the departure and arrival airports for each segment).  (5) Total aircraft cost per flight segment.  (6) Total number of passengers for each flight segment (to include seats  occupied by the Secret Service).  (7) Total number of seats occupied by the Secret Service for each flight  segment.

The policy also requires that if an invoice is incomplete or inaccurate that  it should be returned to the protected individual within seven days of  receipt for completion or correction.

We found that 20 of the 76 invoices submitted to the Secret Service  during the 2016 presidential campaign had incomplete or inaccurate  information, and therefore should have been returned to the protected  individual, or the related campaign committee. The 76 invoices included  2,548 flight segments. Information for 558 (22 percent) of the flight  segments was incomplete or inaccurate. However, the Secret Service did  not return any invoices to the four candidates or their campaign  committees during the 2016 presidential campaign, according to Secret  Service officials. Specifically, we found the following instances of  incomplete and inaccurate information in the charter flight invoices  provided by the campaign committees on behalf of protected individuals  to the Secret Service:

Airport Code: The Hillary for America Committee submitted two  invoices containing two flight segments missing an airport code. The  Carson America Committee submitted one invoice that did not clearly  show the destination airport for seven flight segments and one invoice  with three flight segments missing an airport code. The Donald J.  Trump for President Committee submitted 12 invoices for then- candidate Trump with 336 flight segments missing an airport code.  Only a city name with multiple possible airports was listed, leaving it  unclear which airport was used. For example, in several instances  “New York, NY” was listed, which could be LaGuardia Airport or JFK  International  Airport.

Total Cost or Passengers: The Donald J. Trump for President  Committee submitted 4 invoices for flights taken by Vice Presidential  Candidate Mike Pence with 210 flight segments which did not include  the total cost or the total number of passengers for each flight  segment. The total cost and number of passengers are necessary to  verify the pro rata cost of the flight segment.

Double Billing: The Donald J. Trump for President Committee  double-billed the Secret Service for three flight segments taken on  March 1, 2016 resulting in a cumulative overpayment of approximately  $21,000 by the Secret Service for these segments.

Other Errors: The invoices for the Hillary for America Committee had  1 (less than 1 percent) of 1,317 flight segments with a mathematical  error; the Donald J. Trump for President Committee had errors on 16  (2 percent) of 965 flight segments; and the Bernie 2016 Committee  had errors on 29 (18 percent) of 159 flight segments. These 46 flight  segments with mathematical errors resulted in a net Secret Service  underpayment to the campaign committees of approximately  $63,000.

According to Secret Service officials, although these errors were made by  the campaign committees, Secret Service officials failed to detect the  errors. Per the Secret Service’s reimbursement policy, it is the  responsibility of the special agents overseeing the protected individual’s  travel to review the invoices to ensure they include the required  information and the provided information is accurate. The policy further  states that absent complete and accurate information, the invoices are to  be rejected for correction prior to reimbursement. Based on our review of  the invoices, the special agents verified the dates of the flights and  number of special agents on board the flight segments included in the  invoices, but did not, for example, reject invoices that did not contain the  three letter airport code or total number of passengers. According to  Secret Service officials, the incomplete invoices should have been  rejected, but were not because of the operational tempo associated with the presidential campaign. As discussed earlier, operational tempo was  also a rationale provided by Secret Service officials for why they did not  adhere to the directive on policy revisions. Standards for Internal Control  in the Federal Government states that management should design control  activities to achieve objectives, such as compliance with policies. In  addition, the standards suggest that agency management should  evaluate excessive pressure on personnel and help personnel fulfill their  assigned duties. To help ensure that the Secret Service is adhering to its  travel policies, the Secret Service may need to assess its existing control  activities and determine how they can be enhanced to address the fast- paced operational tempo of presidential campaigns.

Further, according to FMD officials, when invoices marked certified  reached FMD for payment, it was assumed by FMD that the invoices had  been certified as complete and accurate, as indicated by the signature of  a special agent or an authorized certifying officer. Secret Service policy  does not assign responsibility for verifying the accuracy of the pro rata  fare and checking that flight segments have not already been billed.  Additionally,  for three of the four campaign committees, the Secret  Service had no assurance when paying the pro rata fare that it was being  charged its share correctly since it did not receive copies of the charter  companies’ invoices. Specifically, the Secret Service relied on invoices  created by the campaign committees for reimbursement purposes without  supporting receipts, invoices, or other documentation to verify the  charges against. According to Secret Service officials, only the Hillary for  America Committee forwarded copies of invoices from the charter  companies it used, allowing the Secret Service to verify the accuracy of  the amounts billed. The Secret Service policy on reimbursement of  chartered aircraft flights does not require that copies of charter company  invoices or receipts be forwarded by the protected individual or their  campaign committee.

Standards for Internal Control in the Federal Government states that  management should design control activities to achieve objectives and  respond to risks. Such activities include proper execution of transactions  (e.g., assuring that only valid transactions are entered into) and controls  over information processing (e.g., comparing charter flight invoices to the  amounts billed to the Secret Service by the campaign committees).  Secret Service officials agreed that the accuracy of flight segment details  and costs should be verified prior to reimbursing for charter flights. In  addition, they further agreed that responsibility for verifying the accuracy  of the pro rata fare and checking that flight segments have not already  been billed should be assigned. They also agreed that the Secret Service  should require the charter companies’ invoices to verify that the campaign  committees are correctly charging the Secret Service for its share of the  total flight cost.

Without updating its charter aircraft reimbursement policy, the Secret  Service does not have reasonable assurance that correct payments will  be made. These changes include: (1) assigning responsibility for verifying  that all calculations done by the campaign committees on behalf of the  protected individual  are accurate, (2) requiring a secondary review  process to confirm the accuracy of charter flight costs prior to making  payment, and (3) requiring that copies of charter companies’ invoices be  provided to ensure that the reported pro rata costs are accurate prior to  reimbursement. In response to our finding, in February 2018 the Secret  Service began drafting an initial version of proposed policy changes,  consistent with its directive on revising policy. Specifically, Secret  Service officials started initial policy research and began reviewing and  drafting the policy, consistent with step two of their policy revision process  (see figure 4). However, several additional steps remain to be completed  before the planned changes are implemented. Until the Secret Service  completes all the necessary steps to update its charter aircraft  reimbursement policy, it remains at risk for making incorrect payments.

Current Policy Does Not Ensure Correct Reimbursements for Chartered Aircraft Flights

Secret Service’s charter aircraft reimbursement policy does not specify  whether its travel agency is to include taxes when identifying the lowest  available first-class airfare. As discussed earlier, Secret Service is to pay  the lower of two applicable fares (lowest available first-class fare, and the  pro rata fare) when reimbursing the campaign committees for special  agents’ travel on chartered aircraft flights. The Secret Service obtains the  lowest available first-class airfare from its travel agency. LRC officials  initially told us that the Secret Service’s travel agency had been including  taxes in the lowest available first-class airfare. However, after inquiring  with the travel agency, an LRC official learned that taxes had not been  included. After further discussion with us, Secret Service officials told us  that taxes should be included.

Including taxes can make the difference between a first-class airfare  being less or more expensive than the pro rata fare for a charter flight,  therefore dictating which fare the Secret Service should reimburse the  protected individual  and campaign committee. For example, if a pro rata  fare costs $1,000, and the lowest available first-class airfare (without  taxes) is $950, then the lower fare is the first-class airfare. However, if the  lowest available first-class airfare (with taxes) is $1,050, then the lower  fare is the pro rata fare.

The Secret Service’s policy on reimbursement of special agents’ seats on  chartered aircraft also lacks important details to ensure that its travel  agency can accurately identify the lowest available first-class airfares and  make accurate reimbursements. The policy requires the protected  individual to provide the Secret Service the 3-letter airport code for the  departure and arrival airports for each flight segment for which it is  seeking reimbursement. However, it does not specify that the 3-letter  airport code needs to be the International  Air Transport Association  (IATA) code and not the Federal Aviation Administration (FAA) code.  Airports in different countries can have the same IATA  and FAA codes.  Providing the FAA code can result in the Secret Service’s travel agency  identifying the wrong airport when determining the lowest first-class  airfare for a travel segment since the travel agency searches IATA codes.  For example, when we asked the Secret Service’s travel agency to  research the lowest available first-class airfare for campaign travel  segments based on the reported destination codes in campaign  committee invoices the travel agency identified “SGJ” as Sagarai, Papua  New Guinea based on the IATA code. However, SGJ is the FAA code for  the Northeast Florida Regional Airport. Similarly, another reported  destination code in a campaign committee’s invoice, LOM, is the FAA  code for Wings Field Airport, Pennsylvania and is also the IATA  code for Lagos de Moreno, Colombia. Since the travel agency searches on the  basis of IATA codes, using FAA codes that are designated as foreign  destinations in the IATA  system can result in confusion for the travel  agency when identifying the lowest available first-class airfare for a flight  segment.

Secret Service officials told us that they had not considered specifying  whether the lowest first-class airfares should include taxes since the  Secret Service had been using the same representative at its travel  agency since 1986 to identify the lowest available first class fare. They  said they assumed that their representative knew the policy through  practice. Also, Secret Service officials told us that they were not aware of  the difference between IATA and FAA codes. Secret Service officials  agreed that the reimbursement policy should be revised to make it clear  that taxes are to be included when the Service’s travel agency identifies  the lowest available first-class airfare when determining the correct  reimbursement amount, and that protected individuals are to provide the  IATA  code for airports.

Standards for Internal Control in the Federal Government states that  management should internally and externally communicate the necessary  information to achieve the entity’s objectives and that effective information  and communication are vital for an entity to achieve its objectives. The  Secret Service could better ensure that its travel agency is able to identify  the lowest commercially available first-class airfare for comparison to the  pro rata fare by updating its charter aircraft reimbursement policy to  specify that (1) taxes are to be included in the lowest commercially  available first-class airfare, and (2) protected individuals’ invoices include  the IATA  airport codes for arrival and departure airports. In response to  our finding, in February 2018 the Secret Service started to draft an initial  version of proposed changes to its charter aircraft reimbursement policy,  consistent with its directive on revising policy. Secret Service officials  were in the process of conducting initial policy research, reviewing, and  drafting the policy, consistent with step two of their policy revision process  (see figure 4). However, the Secret Service needs to complete several  additional steps before the planned changes go into effect. Until then, the  Secret Service remains at risk of not correctly identifying the lowest  applicable airfare.

The Secret Service plays a vital  role in protecting our nation’s leaders,  including presidential and vice presidential candidates, and their family  members. During the 2016 presidential campaign, for the trips we  reviewed, the Secret Service generally followed its internal policies and  federal regulations  governing payment for lodging costs incurred while  protecting candidates. However, due to an erroneous legal decision in  August 2015, the Secret Service did not follow its reimbursement policy  for chartered aircraft during the campaign. By not adhering to its policy,  the Secret Service overpaid campaign committees at least an estimated  $3.9 million dollars  for charter flights. Until the Secret Service determines  the amounts owed and how it will proceed with seeking repayment from  the various  campaign committees, these funds will not be recovered by  the federal government.

Further, in making the erroneous legal decision in August 2015, the  Secret Service did not adhere to its directive on policy revisions. The  decision to effectively  change a policy was not fully vetted,  reviewed, or  communicated in accordance with the directive. This was largely  due to  the lack of a requirement to notify the directive control point when legal  decisions are made that can result in policy changes. This could result in  similar policy changes not being reviewed in the future.

Finally,  presidential campaigns create a fast-paced operational  tempo at  the Secret Service, and according to agency officials, this tempo  contributed to their failure to comply with travel policies during the 2016  presidential campaign. Until Secret Service evaluates  the pressure  caused by this tempo and implements appropriate  mechanisms, it cannot  ensure that agency officials responsible for travel reimbursements are  complying with policy during presidential campaigns. In addition,  Secret  Service’s charter aircraft reimbursement policy does not assign primary  and secondary reviews of invoices  provided by campaign committees.  The policy also does not require that campaign committees and the  agency’s travel agency provide  all the information necessary to verify the  accuracy of the invoices. Without these requirements, Secret Service may  continue to reimburse campaign committees incorrect amounts.

We are making the following five recommendations to the Director of the  Secret Service.

Consistent with the federal debt collection authorities as provided in 31  U.S.C. chapter 37, the Director should complete the process of  calculating the amounts of its overpayments to the campaign committees  for special agents’ seats on chartered aircraft during the 2016 presidential  campaign, and determine how it should proceed with respect to collecting  on identified debts. (Recommendation 1)

To help ensure that the agency’s existing directive on policy revisions is  followed, the Director should require in policy and practice that the  directives control point be notified when the Office of the Chief Counsel  provides advice to offices that is likely to result in policy changes.  (Recommendation 2)

The Director should assess its existing control activities and implement  appropriate mechanisms to help ensure compliance with the agency’s  travel cost policies during presidential campaigns. (Recommendation 3)

The Director should update the charter aircraft reimbursement policy to  assign the offices responsible for verifying that all calculations done by  the campaign committees are accurate, and require a secondary review  process prior to making payment. (Recommendation 4)

The Director should update the charter aircraft reimbursement policy to  specify that protected individuals are to provide IATA  codes and copies of  the charter companies’ invoices, and that the Secret Service’s travel  agency is to provide lowest available first-class airfares that include taxes.  (Recommendation 5)

We provided a draft of this report for review and comment to DHS, GSA,  and FEC.

DHS provided written comments, which are reproduced in appendix III.  In  its comments, DHS concurred with our recommendations. DHS also  stated it had taken or planned to take actions to address all five of our  recommendations. In addition, after we provided this report to DHS for  comment, Secret Service provided us documentation, including a revised  travel policy, highlighting actions they have taken to address our  recommendations. We will review the documentation and take steps to  close the recommendations in the future, as appropriate.

DHS and FEC provided technical comments, which we incorporated as  appropriate. GSA and FEC did not provide written comments.

As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 1 day from the report  date. At that time, we will send copies to the Secretary of Homeland  Security, Administrator of the General Services Administration, and Staff  Director of the Federal Election Commission. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-9627 or maurerd@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix IV.

Appendix I: Objectives, Scope and Methodology

This report addresses the U.S. Secret Service’s (Secret Service) 2016  presidential campaign travel expenses and payment of those expenses.  Specifically, our objectives were to examine the following questions:  (1) How much did the Secret Service incur in transportation, lodging, and  other travel-related expenses when providing protection during the  2016 presidential campaign?  (2) To what extent did the Secret Service reasonably assure that  payments and reimbursements for travel-related protection expenses  were made in accordance with applicable laws, regulations, and  policies during the 2016 presidential campaign?

To determine how much the Secret Service incurred in travel-related  expenses, we obtained expense data from the Secret Service for each of  the individuals protected for the 2016 presidential campaign. In total, the  Secret Service protected 12 individuals associated with 4 campaign  committees (see table 1 below).

We analyzed the travel expenses for each of these protected individuals  to determine the total travel expenses incurred by the Secret Service for  each campaign committee and for the 2016 presidential campaign as a  whole. Travel expenses include those captured by the Secret Service  under object class 21—travel and transportation of persons. Object class  21 expenses include airfare, vehicle rentals, hotel rooms, meals and  incidental expenses, and baggage charges for special agents  accompanying protected individuals. Additionally,  we determined the  amount of the total travel-related expenses that were reimbursements to  the campaign committees—all of which were for special agents’ seats on  campaign chartered aircraft.

To assess the reliability  of the Secret Service’s expense data, we  discussed with the Secret Service officials how the data are entered and  maintained in the Secret Service’s official financial system of record— Travel Manager, Oracle, PRISM, Sunflower system—which is used to  track operating and travel expenses, among other things. We also  reviewed the data for any obvious errors and anomalies. We compared  the data to the invoices the Secret Service received from the campaign  committees seeking reimbursements in order to verify the amounts the  campaigns were reimbursed. Further, we compared the Secret Service’s  reimbursement data to data the campaign committees reported to the  Federal Election Commission (FEC) on payments they received from the  Secret Service. As a result, we determined that the expense data were  sufficiently reliable for reporting the Secret Service’s total travel  expenses, expenses broken out by campaign committee and protected  individual, and the portion of expenses that were reimbursements to the  committees.

To determine the number of travel stops made by the campaign  committees for which the Secret Service provided protection, we used  data from the Secret Service’s Agent Manpower Protection System. To  assess the reliability of these data, we reviewed responses provided by  the Secret Service on how the data are entered and maintained in the  system. We further matched a sample of the travel stops data to hotel  bills for those stops. As a result, we determined that the data on travel  stops were sufficiently reliable for reporting the total number of travel  stops made during the campaign and number of stops per campaign  committee.

To determine whether the campaign committees charged the Secret  Service appropriate rates for the use of candidate-owned assets, we tried  to identify whether any portion of the Secret Service’s reimbursements to  the campaign committees were for the use of candidate-owned assets.  Candidates flew on various types of charter aircraft, including jets and  helicopters. Pursuant to law and FEC regulations, campaign committees  must report and maintain certain information regarding the use of these  aircraft. However, this information was not sufficient for us to determine  whether aircraft for which the Secret Service provided reimbursement  were owned by candidates. Further, the Secret Service does not collect  information about a campaign’s use of candidate-owned assets, including  aircraft. We contacted all four campaign committees using various  methods, including email, phone, and in-person visits to identify  reimbursements received for candidate-owned assets, but none of the  committees responded to our questions. As a result, we were unable to  determine whether any portion of the Secret Service’s reimbursements  were for the use of candidate-owned assets.

To determine the extent to which the Secret Service’s payments and  reimbursements for travel-related protection expenses were made in  accordance with applicable laws, regulations, and policies, we analyzed  the Secret Service’s lodging payments and charter aircraft  reimbursements. Of the 962 overnight trips taken during the 2016  presidential campaign, we randomly selected 40—10 for each of the  presidential candidates—to assess the Secret Service’s compliance with  (1) its internal policy requiring a waiver when a hotel room exceeds the  General Services Administration (GSA) per diem rate by any amount,  and (2) provisions of Federal Travel Regulation (FTR) that limit hotel  spending to 300 percent of the GSA rate. To determine the GSA per  diem lodging rate, we reviewed the GSA rates applicable on the date of  the hotel stay and for that location. If the amount of the room exceeded  the GSA rate we identified whether the Secret Service had a waiver for  the trip and also checked whether the amount paid exceeded the  maximum amount available for lodging under Department of Homeland  Security (DHS) and Secret Service policy and under the FTR. The time  and effort associated with collecting trip bills from many field offices were  primary considerations in determining the number of candidates’ trips to  review. The Secret Service’s retention of hotel bills is decentralized; that  is, the field office responsible for the geographic area where the  protective operation occurs retains hard copies of the bills. Although the  results of our analysis are not generalizable to all overnight trips taken  during the 2016 presidential campaign, it provided us insight to the Secret  Service’s compliance with its lodging policy and the FTR.

With regard to whether the Secret Service reimbursed the four campaign  committees the correct amounts for special agent travel on campaign  chartered aircraft, we compared the Secret Service’s payments to the  committees to our estimate of what the Secret Service would have paid  had its own charter aircraft reimbursement policy been followed. We  determined the Secret Service did not use the correct reimbursement  method throughout the 2016 presidential campaign. To determine  whether the Secret Service followed its directive on the review and  approval of policy changes, we compared the steps required to effect a  change in policy to the steps taken by the Secret Service when its  reimbursement method was altered.

To estimate whether and, if so, by how much the Secret Service overpaid  the campaign committees for special agents’ seats on chartered aircraft  flights based on the reimbursement policy change mentioned above, we  selected a generalizable stratified random sample of 650 flight segments  from the 2,318 flight segments taken from November 1, 2015 through the  end of the 2016 presidential campaign that had an identifiable  airport.  Appendix II provides further technical details on the statistical methods  we used. To determine whether the Secret Service should try to collect on  the overpayments to the campaign committees, we reviewed relevant  federal authorities, including 31 U.S.C. chapter 37.

To determine whether the Secret Service followed its policy with regard to  accepting and reviewing chartered aircraft invoices, we compared all 76  invoices submitted by the four campaign committees to the agency’s  policy requirements for invoice completeness and accuracy. Further, we  used Standards for Internal Control in the Federal Government to assess  whether the Secret Service’s requirements for charter aircraft invoices,  and the review of the invoices, are specific enough to help ensure that the  Secret Service is making correct reimbursements for charter aircraft  flights.

Appendix II: Analysis of a Stratified Random Sample of Flight Segments for GAO’s Overpayment Analysis

To estimate whether and, if so, by how much the U.S. Secret Service  (Secret Service) overpaid the campaign committees for special agents’  seats on chartered aircraft flights, we selected a generalizable stratified  random sample of flight segments from campaign invoices sent to the  Secret Service. Specifically, we selected 650 flight segments from the  2,318 flight segments taken from November 1, 2015 through the end of  the 2016 presidential campaign that had an identifiable airport. We  stratified the population of 2,318 flight segments into 11 mutually  exclusive strata by campaign (Trump, Clinton, Sanders, and Carson) and  three size categories based on the number of special agents that  indicated being on board a flight. We chose to stratify based on the  number of special agents on board to minimize the variance of the total  cost within each stratum in an attempt to gain statistical efficiency in the  sample design.

The sample size of 650 flight segments was based primarily on available  resources to have the Secret Service’s travel agency extract cost data  from the airfare database. We allocated the sample of 650 flight  segments to the 11 strata using proportional allocation within each  campaign. We then adjusted the allocation in each stratum in an attempt  to match a Neyman allocation method that would minimize the variance of  an estimate of total cost. We randomly selected the allocated sample size  of flight segments within each of the 11 strata.

For each of the 650 flight segments selected in the sample, we obtained  two measures of the lowest first-class airfare from the Secret Service’s  travel agency, one with fees and taxes and one without (base fare). This  was due to some confusion at the Secret Service about whether taxes  and fees should be included when determining the lowest first-class  airfare. We then compared these first-class airfares to the individual fare  (i.e., the pro rata fare) paid by the Secret Service to the campaign  committees. We classified a flight segment as overpaid if the lowest first-class airfare was less than the pro rata fare paid by the Secret Service.  To determine the total amount of overpayment per flight segment, we  multiplied the difference between the pro rata fare paid by the agency and  the lowest first-class airfare by the number of Secret Service special  agents on board the flight. We assigned flight segments that were  classified as not overpaid a total overpaid value of zero.

From our sample of 650 flight segments, we identified 295 flights for  which the Secret Service overpaid a total of about $1.5 million. To  estimate the proportion of overpaid flight segments and the total amount  overpaid by the Secret Service for all 2,318 flight segments in the  population from which we sampled, we weighted the sample results by  the inverse of the probability of selection based on the stratified sample  design. We used estimation methods appropriate for a stratified random  sample design and generated 95 percent confidence intervals for each  estimate. Because we followed a probability procedure based on random  selections, our sample is only one of a large number of samples that we  might have drawn. Since each sample could have provided different  estimates, we express our confidence in the precision of our particular  sample’s results as a 95 percent confidence interval (e.g., plus or minus 7  percentage points). This is the interval that would contain the actual  population value for 95 percent of the samples we could have drawn. As  a result, we are 95 percent confident that each of the confidence intervals  in this report will include the true values in the study population. The  weighted percentage estimates of the full population from our sample  have margins of error at the 95 percent confidence level of plus or minus  4 percentage points or fewer and the estimate of the total amount  overpaid by the Secret Service has a relative error of plus or minus 12  percent of the estimate or less.

Based on these results, we estimate that total overpayments in the  population of 2,318 flight segments from November 1, 2015 through the  end of the campaign would be at least $3.9 million. We estimate that the  Secret Service overpaid invoices for about 49 percent (+/- 4 percentage  points) of the flight segments. The estimated $3.9 million represents the  lower bound of the 95 percent confidence interval of the estimated total  dollar amount overpaid based on our sample. The lower bound  represents relative error of about 12 percent.

Appendix III: Comments from the Department of Homeland Security

Appendix IV: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Joseph P. Cruz (Assistant  Director), Lisa Canini, Jeffrey Fiore, Chad Johnson, Janet Temko-Blinder,  and Jonathan Tumin made key contributions to this report. Also  contributing to this report were David Alexander, Jim Ashley, Dominick  Dale, Eric Hauswirth, John Mingus, and Carol Petersen.