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No Time For Junkets

Travel by government employees is down, but it's still a big expense in every state. The goal isn't to eliminate it but to do it efficiently.

Katherine Harris, Florida's famous secretary of state, has been under fire again lately--but not because of anything that happened in the 2000 presidential election. Rather, Harris spent $150,000 traveling all over the world during the course of her first three years in office, leading critics to complain that given the dire financial straits that Florida is in, all such travel expenditures should be more closely watched. A state Senate committee scrutinized her spending and found no evidence of malfeasance, but the issue still hasn't entirely died away.

Of course, part of the problem may be that Katherine Harris is a controversial figure and an easy target, but part of it also is that travel by any state official or agency is a delicate issue in these days of fiscal austerity. As legislatures trim spending, travel is one of the first items to go to the chopping block. Seventeen states have issued some restrictions on state employee travel this year, and even where the budgets have not been cut dramatically, there have been warnings to state workers not to go anywhere that is not absolutely necessary.

The media have joined in, questioning conference costs incurred by Missouri lawmakers and challenging local travel spending by bodies as diverse as the Los Angeles City Council and the town leadership of Bolivar, Tennessee. All policy decisions involving who gets to go where and for how much seem to be on the table for discussion.

Within the state agencies that make these decisions, however, the emphasis is quite a bit different. It isn't on stamping out travel excesses, but on ensuring that when employees do travel, they get there with the greatest saving to the government. And in truth, most states have a long way to go when it comes to this kind of management. Few have established any centralized travel program to foster efficiency on an entity-wide basis. Centralized travel planning at the local level is even harder to find.

The evidence seems to be that centralized travel planning does pay off. Where it exists, a centralized program manager is able to leverage the bulk of the state's travel business to negotiate better fares from airlines, car rental companies and hotels. Not only does the volume drive down prices but vendors tend to be more interested in striking deals. "We keep the airlines bidding, and that's our number one goal," says Jimmie Sanders, who runs Louisiana's travel office. The payoff, Sanders says, has been "the bread and butter that we saved based on receiving airline contracts."

Airfare is the primary travel expense for almost any state government. In states that have a central program, RFPs are issued for each pair of cities where employees travel back and forth frequently. In Texas, for example, Dallas-Washington and Austin-Atlanta might be at the top of the list. Some states have as many as 500 different combinations altogether. Airlines bid on the chance to provide service between pairs of cities, and the state can negotiate contracts with different airlines for different pairs. In Utah, according to travel manager Diann Donoviel, the airline contracts save the state about 60 percent each year. They also make travel more convenient. "Our employees don't have to stay over a Saturday night, there's no advance, and they're refundable and changeable," Donoviel says.

There's no reason why local governments can't do the same thing, but most of them haven't been able to. In many cases, even a large city won't be able to demonstrate the volume of business that the airlines want to see in order to make a deal. The city of Detroit approached Northwest Airlines about setting up a corporate account, but "they felt that our usage was not such that we warranted a contract," says Marilynn Sims, the city's travel coordinator.

Most of the centralized programs use corporate credit cards to streamline payment and provide documented travel-expense reports. These give the airlines a form of security--but also increase the risk of embarrassment for states that try to save money by delaying their payments. Arkansas recently had its American Express account abruptly cut off because of payment delinquency across the board.

The centralized systems also generally work through designated travel agencies. Having a limited number of agencies handle all the tickets is attractive to the airlines, which argue that the more agencies a state works with, the more convoluted the process becomes both for the state and for the vendor.

But relations between some states and travel agencies have been strained recently because of decisions by a number of large airlines to discontinue the practice of paying commission to agents on ticket purchases. Louisiana, Oregon and Utah have renegotiated contracts so that the travel agencies receive money from the state to compensate them for the missing revenue from the airlines. But not every state has done that. Texas, for example, has issued a firm statement that it will not start paying transaction fees to travel agencies despite the airline cutback. This has resulted in at least two travel agencies canceling their contracts, although 11 others were maintaining their relationship with the state as of mid-May.

The future of government travel programs will be largely a matter of using emerging technologies to enhance speed and organization. A handful of states already automate various steps of the travel management process, from data-capture systems that record the vendors used and prices charged for each trip, to pay reimbursement and the generation of reports on a frequent and regular basis. Donna Carey, California's statewide travel administrator, notes that one of the most difficult parts of her job is to look through new technologies, although she acknowledges that "as our industry moves forward, we need to move forward, too."

New software systems that are coming on the market promise more seamless end-to-end travel management, but currently the implementation of these systems is low. Some states are trying to find ways to integrate Internet discount fares into the options that employees have, or make state-negotiated rates available for online booking. Others have made their regulations and contract information available on the Web so that employees can easily see what policies they need to follow.

While achieving low airfares is the primary objective of many of the centralized state programs, a few other experiments have saved money and eased the experience of travel for government employees. Oregon and Washington, in a deal thought to be unique, have pooled their combined purchasing power to negotiate a single contract with Budget Rent-a-Car Corp. that has provided "tremendous savings," according to Tim Hay, of the Oregon Department of Administrative Services. Utah negotiated a contract with an airport shuttle service that saves the state money by driving employees to the airport so they don't have to pay to park.

Given the disorganized nature of many of the states' travel management programs, and the fact that some of them lack a central program altogether, the level of abuse that occurs in the field is hard to quantify. But official travel management reports clearly help. Utah's in-house travel agents keep an eye on what employees are up to, and have established formal procedures to try to stop wasteful practices. "If someone declines to take the lowest airfare," says travel manager Donoviel, "we have an exception list that people go on that goes to the financial director, then to the governor. People don't want their name on that list."