$820,000 for a Las Vegas Conference — No Hookers Included?

Spend Matters welcomes a guest post from Mark Schaffner at Verian.

Though the stories broke a couple weeks ago, I can't help but discuss the all too painful reminders that some government entities have an extremely hard time managing spending. We are referring, of course, to the GSA and Secret Service scandals. The details of how thoroughly the Secret Service and military explore the local brothels on advance trips, and who pays for it, are still coming to light.

The lavish GSA spending was only exposed because two years later the Office of the Inspector General (OIG) decided to investigate excessive spending and produced a report. What did the OIG find out about the GSA conference?

  • $136,500 just to plan the conference ($455 per person for the 300 person event)
  • A $58,000 contract awarded to big business in spite of small business set asides
  • Over $41,000 in over-promised catering charges
  • Over $145,000 in excessive food costs ($44 per person for breakfast, $95 for reception/dinner)
  • Free rooms to contractors' employees
  • A $75,000 team building exercise that turned out to be building a bicycle
  • $3,200 for a mind reader

OIG also cited GSA for disclosing maximum conference budgets to vendors in advance, with no intention of negotiating lower rates. The Secret Service likely conducted their clandestine negotiations in a more savvy fashion. Unfortunately, they failed to understand that short-paying a pimp creates an entirely different set of confidentiality issues.

Which brings us to the real question -- how can this lavish and out-of-control spending even happen?

These agencies probably have purchasing systems. They no doubt budget for these events and have request-for-proposal (RFP) capabilities that ensure competitive pricing. They surely have policies regarding approvals and sign-offs based on spending limits.

They may even have automated travel and expense (T&E) policies that bake spending rules into expense reports. And while it is painfully obvious that utilizing proper P2P technology could have saved taxpayers a lot of money, the problem here isn't a lack of tools and policy. It is the willingness of those in authority to blatantly disregard whatever policy exists.

As long as people who make poor decisions are in charge of even the best systems, scandals like these in the GSA and Secret Service will continue to happen. After the dust settles, let's hope those in authority not only employ P2P technology to increase spending visibility, reduce maverick spending, and create impressive audit trails, but also ensure only individuals deserving of the public's trust are placed in these positions of immense responsibility.

Let's also hope they don't need a $3,200 mind reader to figure that out.

- Mark Schaffner, Verian

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