The Office of International Affairs 

Internal Operations and Travel 

Oversight 

 

 September 30, 2012

 Report No. 508
The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

Report No. 508

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The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

Report No. 508

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Should you have any questions regarding this report please do not hesitate to 

contact me. We appreciate the courtesy and cooperation that you and your 

staff extended to our audit staff. 

Attachment 

cc: Erica Williams, Deputy Chief of Staff, Office of the Chairman 

Luis A. Aguilar, Commissioner 

 Troy A. Paredes, Commissioner 

 Elisse B. Walter, Commissioner 

 Daniel Gallagher, Commissioner 

 Elizabeth Jacobs, Deputy Director, Office of International Affairs 

 Robert Fisher, Deputy Director, Office of International Affairs 

 Jayne Seidman, Chief of Staff, Office of the Chief Operating Officer 
The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

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The Office of International Affairs 

Internal Operations and Travel Oversight 

Executive Summary

Background. The Office of International Affairs (OIA) “promotes investor 

protection and cross-border securities transactions by advancing international 

regulatory and enforcement cooperation, promoting the adoption of high 

regulatory standards worldwide, and formulating technical assistance programs 

to strengthen the regulatory infrastructure in global securities markets.”1

 

OIA is headed by a Director and two Deputy Directors. Its activities are carried 

out by four operating units: Technical Assistance, International Enforcement, 

International Regulatory Policy, and Comparative Law and Regulation. Each 

operating unit is headed by an Assistant Director and is managed by a Branch 

Chief. 

OIA also serves as the focal point for the U.S. Securities and Exchange 

Commission (SEC or Commission) staff’s official international travel. OIA 

reviews SEC staff’s proposed foreign travel that is presented in the Foreign 

Travel Memorandum (FTM) and the supporting documents that international 

travelers provide to OIA. Subsequently, OIA submits these documents to the 

Office of the Chief Operating Officer (OCOO) for final review and approval. 

Further, OIA coordinates SEC staff’s needed country clearances with the U.S. 

Department of State and foreign governments and determines whether there are 

any visa requirements. In addition, OIA provides input to the “International 

Travel” section that is located on the “SEC Insider,” the Commission’s internal 

website. This site provides foreign travel guidance to Commission staff. 

 

Objectives. The overall objective of OIG’s audit was to assess the effectiveness 

and efficiency of OIA’s internal operations and identify areas for improvement to 

reduce or eliminate fraud, waste, and abuse. Our specific audit objectives were 

to assess whether OIA: 

 Has viable policies, procedures, and controls for its program 

activities; 

 Effectively tracks and processes requests for technical assistance 

and enforcement assistance in a timely manner; 

 Has developed a program that ensures SEC employees’ 

international travel is appropriately processed through OIA; 

 Adequately communicates SEC’s international travel process and 

related procedures to employees; and 

 

1

See www.sec.gov. 
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 Appropriately conducts and reports its staff’s international travel in 

accordance with applicable Federal regulations and internal policies 

and procedures. 

Results. OIA’s operating units have policies, procedures, and controls, and the 

office effectively tracks and processes technical and enforcement assistance 

requests. However, OIA has not documented its international travel coordination 

and review procedures. In addition, our testing of FTMs, the primary review and 

approval document for international travel, found that: FTMs were not always 

submitted to OIA two weeks prior to the start of travel, as is required by SEC 

policy; some FTMs did not have one or more required supporting documents; 

some FTMs were approved by the former Executive Director on or after the 

traveler’s departure date; and the former Executive Director did not approve a 

few FTMs. 

While OIA obtains country clearances for SEC international travelers, it maintains 

the documents in its file and does not provide them to the traveler. 

Further, our review of supporting documentation for two one-day international 

trips and a multi-stop, two-day international trip that were taken in 2009 and 2010 

by OIA staff found the trips were not sufficiently documented to justify the 

benefits derived. The OIA Director and Deputy Director for Policy provided OIG 

with additional documentation to justify these trips. 

Our review of a sample number of international expense reports found that 61 

percent were not submitted by travelers within five working days after the trips’ 

completion, in accordance with Federal travel regulations and SEC travel 

policies. We also found compliance with Federal travel regulations and SEC 

travel policies related to business class travel, taxis and airport parking, hotel per 

diem, meals and incidental expenses, and the recording of compensatory time 

for travel needs improvement. Finally, the “International Travel” section on the 

SEC Insider, which international travelers use to identify travel requirements, 

contains outdated information that should be updated. 

Summary of Recommendations. This report contains 10 recommendations 

that were developed to strengthen OIA’s internal operations and to assist OIA 

and the OCOO in effectively executing their international travel-related 

responsibilities. 

Specifically, OIG recommended that OIA develop and implement written 

procedures for its travel coordination and review activities. In addition, we 

recommended OIA strengthen its travel administrative activities. In this regard, 

OIA and OCOO should periodically inform Commission staff regarding the 

requirement to prepare FTMs at least two weeks before the travel date and to 

provide supporting documents with the FTM to OIA. Further, we recommended 
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the FTM is revised to include a justification for approved travel and copies of 

approved country clearances are provided to international travelers. 

Additionally, we recommended OIA establish procedures to ensure its staff 

follows Federal travel regulations and SEC travel policies when: planning 

international trips, preparing expense report, and computing and recording 

compensatory time for travel. We also recommended OIA ensure its timekeeper 

records compensatory time for travel in the pay period the hours are earned. 

Finally, OIA and OCOO should review guidance on the SEC Insider related to 

international travel processes and procedures and regularly update this 

information. 

Management’s Response to the Report’s Recommendations. OIG provided 

OIA and OCOO with the formal draft report on September 19, 2012. OIA and 

OCOO concurred with the recommendations that were addressed to their 

respective offices. OIG considers the report’s recommendations resolved. 

However, each recommendation will remain open until documentation is provided 

to us that supports the recommendation has been fully implemented. 

OIA and OCOO responses to each recommendation and OIG’s analysis of the

responses are presented after each recommendation in the body of this report. 
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TABLE OF CONTENTS 

Executive Summary ................................................................................................iii 

Table of Contents ................................................................................................... vi

Background and Objectives ................................................................................. 1 

Background ....................................................................................................... 1 

Objectives .......................................................................................................... 5 

Findings and Recommendations.......................................................................... 7 

Finding 1: OIA’s Travel Coordination and Review Processes Lacked

Written Procedures. ...........................................................................................7 

Recommendation 1....................................................................... 9 

Finding 2: OIA’s Travel Administrative Activities Need Strengthening. ..............9 

Recommendation 2..................................................................... 12 

.....................................................................13

.....................................................................13

.....................................................................13

Recommendation 3

Recommendation 4

Recommendation 5

Finding 3: The Justification for Taking International Trips Was Not Always 

Properly Documented. ..................................................................................... 14 

Recommendation 6 .....................................................................15

Finding 4: OIA’s Staff’s Compliance with Federal Travel Regulations and 

SEC Travel Policies Needs Improvement Regarding International Travel ....... 16 

Recommendation 7..................................................................... 22 

..................................................................... 23 

..................................................................... 23 

Recommendation 8

Recommendation 9

Finding 5: Some International Travel Information on SEC’s Internal 

Website Is Outdated......................................................................................... 23 

Recommendation 10................................................................... 24 
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Appendices

Appendix I: Acronyms and Abbreviations.

Appendix II: Scope and Methodology............................................................... 27 

Appendix III: Criteria......................................................................................... 29 

Appendix IV: List of Recommendations ........................................................... 33 

Appendix V: Management Comments .............................................................. 35 

....................................................... 26 

Tables

Table 1: FTMs Reviewed For FYs 2008 to 2011 ..............................................11

Table 2: Late Expense Reports Reviewed by Fiscal Year ............................... 17 
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Background and Objectives 

Background 

The mission of the Office of International Affairs (OIA) is to: 

Promote investor protection and cross-border securities transactions by 

advancing international regulatory and enforcement cooperation, 

promoting the adoption of high regulatory standards worldwide, and 

formulating technical assistance programs to strengthen the regulatory 

infrastructure in global securities markets.2 

OIA carries out its mission by: 

 Advising on and assisting with cross-border securities 

investigations and prosecutions, and negotiating informationsharing arrangements with foreign securities regulators and law 

enforcement agencies. 

 Conducting training and technical assistance programs in the 

United States and internationally for foreign regulators, particularly 

from emerging securities markets. 

 Providing analysis and advice to the U.S. Securities and Exchange 

Commission (SEC or Commission) regarding rules, actions, and 

initiatives that have multinational implications, and promoting the 

adoption of meaningful and effective securities regulations and 

accounting, auditing, and enforcement standards worldwide. 

Organizational Structure 

Integral to OIA’s operations and its role in coordinating international issues are 

the internal procedures and tracking mechanisms the office and its four operating 

units use. The operating units: Technical Assistance (TA), International 

Enforcement (IE), International Regulatory Policy (RP), and Comparative Law 

and Regulation (CL), carry out the office’s mission and activities as described 

below. Each unit is headed by an Assistant Director and is managed by a Branch 

Chief. 

OIA’s Director, senior staff, and counsel meet bi-weekly with supervisors from 

each unit to discuss priority items, planning, and administrative matters. In 

addition, each week OIA staff works with Commission staff agency-wide to

 

2

See www.sec.gov. 
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develop its “at a glance” international calendar. The calendar contains brief 

descriptions of significant engagements between Commissioners, SEC staff and 

key outside officials and representatives, as well as important foreign and 

domestic conferences. Unit projects are recorded and tracked in the 

International POD (I-POD) system, which is an in-house system OIA uses to 

maintain and monitor the status of work that is performed. The I-POD system 

also accumulates data for inclusion in OIA reports. Each week OIA attorneys

complete an assignment survey that senior management uses to control and 

assign work. 

OIA’s units have distinct functions and written policies and procedures that have 

been developed to conduct and control their operations. 

Technical Assistance. TA plans, develops, and conducts training programs 

overseas. OIA conducted 19 overseas programs in 2010 and 11 in 2011. The 

programs typically lasted 3 to 5 days in duration. Programs are normally funded 

by outside organizations such as hosting foreign government agencies or 

securities authority, World Bank, International Monetary Fund, or Asia-Pacific 

Economic Cooperation. Some programs are also funded by the U.S. Agency for 

International Development (USAID) under an inter-agency agreement it has with 

the SEC.3

 

TA also develops, organizes, and conducts the nine-day “International Institute 

for Securities Market Development” that is held annually in the spring, and the 

five-day “International Institute for Securities Enforcement and Market Oversight” 

that is held annually each fall. These seminars are complex events requiring 

detailed advance planning and coordination. The fall 2011 seminar included 176 

representatives from 56 countries, and the spring 2012 seminar included 161 

representatives from 69 countries, as well as 6 Chairmen from the SEC’s foreign 

counterparts. To maximize the breadth of participation, individuals can only 

attend these seminars once every five years. 

International Enforcement. IE facilitates cross-border enforcement 

cooperation. The unit coordinates assistance requests with foreign law 

enforcement and regulatory agencies on behalf of the Division of Enforcement 

(Enforcement). Such assistance may require obtaining documents, information, 

and testimony; freezing assets abroad; or conducting joint or parallel 

investigations with the foreign counterparts. In so doing, IE relies on 

mechanisms such as mutual legal assistance treaties, memoranda of 

understanding, letters rogatory (formal requests from a court in one country to 

the judicial authority in another), and ad hoc arrangements to obtain brokerage, 

bank, and corporate records; foreign audit workpapers; and testimony. In 

addition, IE assists foreign securities regulators with investigations when it is 

necessary to obtain information and documents in the United States (U.S.). IE 

 

3

 Interagency Agreement Between the United States Agency for International Development and the United 

States Securities and Exchange Commission. 
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strives to develop effective working relationships with foreign law enforcement 

and regulatory partners. 

International Regulatory Policy. RP coordinates international policy efforts 

intended to promote high-quality securities regulation, and it keeps the 

Commission informed of current and potential initiatives that may affect financial 

markets. OIA seeks to advance SEC’s policy interests at regulatory and 

standards-setting organization meetings where current and future global financial 

and other initiatives are discussed and promulgated. SEC, with OIA’s

involvement, maintains a leadership presence at the International Organization of 

Securities Commissions (IOSCO). Consequently, RP is an active member of 

IOSCO’s technical committees, whose overall objective is to review major 

securities regulatory issues. RP also participates in securities-related task forces. 

Further, OIA facilitates the SEC’s participation on the Financial Stability Board. 

The Board was established in 2009 with the goal of strengthening financial 

systems and international financial products. OIA maintains a similar role in 

other international organizations such as the Council of Securities Regulators of 

the Americas, the Financial Action Task Force, and the Organization for 

Economic Cooperation and Development. In addition, OIA collaborates on 

diverse projects seeking enhanced transparency and disclosure, such as striving 

towards high-quality global accounting standards. 

Comparative Law and Regulation. CL provides analysis and advice on 

international legal and regulatory issues including best practices abroad and 

initiatives taken in foreign countries that may impact the SEC or U.S. markets. 

CL advises the Commission on the multinational aspects of decisions and 

rulemakings and on issues related to cross-border supervisory cooperation and 

regulatory coordination. Additionally, CL analyzes the impact that SEC rules and 

actions might have on foreign market participants in U.S. markets, and advises 

the Commission on the potential impact of proposed rules and policy initiatives 

by foreign regulators. CL also monitors other countries’ legislative and regulatory 

reforms and keeps the Commission informed of potential conflicts and

opportunities for cross-border coordination. For example, CL analyzed the DoddFrank Wall Street Reform and Consumer Protection Act of 2010, and SEC 

regulations issued thereunder, to determine the impact on foreign laws and 

foreign market participants in the U.S. Finally, CL coordinates closely with RP 

regarding the activities and initiatives of committees and task forces that involve 

RP. 
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Performance and Accountability Report 

The SEC’s 2011 Performance and Accountability Report (PAR)4describes two 

key areas (Goal 1 and 2) of OIA’s involvement in achieving the SEC’s goals. 

Goal 1 - “Foster and Enforce Compliance with the Federal 

Securities Laws”

Indicator 10 of the PAR deals with SEC’s requesting foreign regulators for 

enforcement assistance and responding to similar requests from foreign 

authorities. The PAR indicates the number of requests to foreign authorities for 

assistance, facilitated by IE, increased by 28 percent from 2010 to 2011, due to 

Enforcement’s “burgeoning need to obtain overseas documents and testimony 

for investigations and litigated matters.”

Goal 2 - “Establish an Effective Regulatory Environment” 

Measure 3 focuses on the number of non-U.S. regulators trained. This effort is 

coordinated by TA. The PAR indicates foreign regulators’ trainings “assist 

countries in developing and maintaining robust projections for investors and 

promote cross-border enforcement and supervisory assistance.” The number of 

foreign regulators trained decreased from 1,997 in fiscal year (FY) 2010 to 1,765 

in FY 2011, as the result of a “realignment of priorities due to resource 

limitations” and limitations on the part of foreign counterparts to host or attend 

training sessions. Training targets for 2012 and 2013 indicates a slight growth 

from the 2011 level.

Agency-Wide Contact for Official SEC International Travel

OIA serves as the agency-wide point-of-contact for official SEC international 

travel and it coordinates certain aspects of travel on behalf of the Commission. 

Among other things, when SEC staff engages in international travel to attend a 

conference or speaking engagement on behalf of the Commission, they must 

confer with OIA prior to accepting the invitation to avoid duplication in topics and 

locations other staff may have previously covered. For all official international 

travel, staff or their respective office or division is required to submit a Foreign 

Travel Memorandum (FTM) and supporting documents to OIA. OIA reviews the 

information for completeness, coordinates the country clearance process with the 

U.S. Department of State (State Department) and foreign governments, and 

assesses whether there are visa requirements. OIA then submits the FTM and 

documents to the Office of the Chief Operating Officer (OCOO)5for final review 

 

4 U.S. Securities and Exchange Commission, FY2011 Performance and Accountability Report, pages 66 

and 69.

5

The former Executive Director performed the final review and approval until spring 2011. In May 2011, his

responsibilities and assigned staff were transferred to the Chief Operating Officer, who heads the OCOO. 
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and approval, and to ensure travel is limited, reasonable, and consistent with 

SEC’s objectives.

SEC staff conducting official foreign travel can obtain guidance for international 

travel on the SEC Insider, the SEC’s internal website, by clicking onto the 

“International Travel” section. The “International Travel” site consists of the 

following hyperlinks: 

 “International Travel Overview” - Provides guidance to travelers. 

 “International Travel Guide” (Travel Guide) - Consists of a summary 

of the international travel process for SEC staff. The Travel Guide 

“is intended to serve as a general overview of the international 

travel process and to help staff determine the necessary steps 

required for international travel.”

 “Forms” - Consists of various international travel forms such as the 

FTM.

 “Useful Links” - Includes hyperlinks to the State Department’s 

Travel Section, U.S. government international per diem rates, SEC 

Office of Financial Management (OFM) travel information, the 

Federal Travel Regulation (FTR), country visa requirements, etc. 

Senior staff in each SEC division or office provides the initial approval for 

official international travel they deem justified. In reviewing FTMs prior to 

submission to OIA, they are required to assess the factors identified in the 

Foreign Travel Guidelines.6 Each office and division is required to 

coordinate with staff in the OCOO and OFM to ensure their staff follows 

governing travel guidelines and protocols such as making travel 

arrangements, filing and processing expense reports, and obtaining 

approvals that are needed from other pertinent offices. 

Objectives 

The overall objective of our audit was to assess the operating effectiveness of 

OIA’s functions and to identify areas for improvement to reduce or eliminate 

waste, fraud, and abuse. OIG’s other audit objectives were to assess whether 

OIA: 

 Has viable policies, procedures, and controls for its program 

activities; 

 Effectively tracks and processes requests for technical assistance 

and enforcement assistance in a timely manner; 

 Has developed a program that ensures SEC employees’ 

international travel is appropriately processed through OIA; 

 

6

The “Foreign Travel Guidelines” is comprised of the procedures that SEC staff conducting official 

international travel are required to follow. 
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 Adequately communicates SEC’s international travel process and 

related procedures to employees; and 

 Appropriately conducts and reports its staff’s international travel in 

accordance with applicable Federal regulations and internal policies 

and procedures. 

OIG revised the audit’s initial objectives to include OIA international travel. 

Where appropriate, OIG also identified best practices. 
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Findings and Recommendations 

Finding 1: OIA’s Travel Coordination and Review 

Processes Lacked Written Procedures 

Though OIA’s operating units’ policies, procedures, and 

controls were adequate, and the office effectively tracked 

and processed technical and enforcement assistance 

requests, it has not documented its international travel 

coordination and review procedures. 

While OIA has written Commission-wide guidance on the processes, 

requirements, and considerations for official foreign travel, it does not have 

documented procedures for its travel coordination and review responsibilities. As 

a result, when a long-time OIA employee who performed this function left the 

office in December 2011, the staff who temporarily assumed the duties did not 

have written guidance to assist in performing travel-related duties. 

OIA’s International Travel Responsibilities and Procedures

OIA serves as the agency-wide coordinator for official international travel and it 

processes, and provides pre-trip assistance to SEC staff. SEC staff or their 

offices and divisions submit a FTM with supporting documentation to OIA for 

international trips. OIA conducts a review to determine if the FTM and required 

documents such as flight itinerary, daily itinerary, event’s program agenda, etc., 

are complete. They then assess whether it is a duplicate visit, and if there are 

existing political, safety, or other issues that could affect travel to the country. 

Once its review is done, OIA forwards the FTM and documentation to OCOO for 

final review and approval. The approved and signed FTM is returned to OIA for 

filing. 

An important OIA travel-related activity is facilitating visas for SEC staff. The 

“Travel Policy for SEC Employees” (SEC Travel Policy), issued January 6, 2010, 

provides detailed travel guidance in a Questions and Answers format. For 

example, SEC Travel Policy, Question 51 describes OIA’s visa responsibilities 

and states, 

When the OIA receives your Foreign Travel Memorandum, 

the travel coordinator will review your application and advise 

you if a visa is required for the countries listed for your trip. 

Every embassy has different processing times. If a visa is 

required for your trip, the OIA coordinator will provide you 

with the necessary application. It is your responsibility to 
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return the completed visa application at least two weeks 

prior to departure. 

OIA forwards staff’s visa application, passport, and photos by courier to the 

respective Embassy or Consulate. Once the visa is obtained, OIA verifies it has 

been recorded in the passport and then returns the passport to the traveler. 

OIA also requests country clearances from the State Department for staff’s 

international travel. SEC Travel Policy, Question 59 states, 

SEC requires all employees to have a country clearance 

prior to departure. OIA will assist you with your country 

clearance. You should contact OIA at least two weeks prior 

to the start of your trip. 

OIA’s Internal Policies and Procedures – Best Practice 

Although OIA lacks written travel coordination and review procedures, the office 

has established written policies and procedures and controls for its program 

activities. For example, IE uses an internal manual, a handbook, and forms to 

conduct its operations, provide guidance to staff, and control quality. The manual 

consists of policies and procedures for the unit’s activities. A handbook of mutual 

legal assistance treaties provides guidance by country of the bilateral 

agreements that are in effect. TA’s program manual provides detailed guidance 

regarding the planning and execution of its programs. The manual contains 

listings of key people, form letters, and a variety of control documents. TA also 

maintains an extensive listing of potential program presenters by subject area. It 

utilizes a control checklist for each program that enumerates tasks to be 

performed, deadlines, and responsible persons. 

Furthermore, RP uses an updated internal calendar to track upcoming meetings, 

events, and initiatives. The SEC maintains a leadership presence on committees 

of key regulatory and standards-setting bodies. OIA’s Director, Associate 

Director, and Deputy Directors discuss upcoming meetings and determine which 

are most important for the SEC to participate in and who should attend them. A 

register of potential meetings is maintained and is updated as final 

determinations are made. CL uses a variety of procedural guidance and 

“models” of previous work to control its activities and product. The unit prepares 

briefing memos, develops detailed analyses of U.S. and foreign laws and 

potential conflicts, and creates legal briefing books, which serve as informational 

resources for attorneys undertaking similar projects. The Branch Chief conducts 

quality control reviews for completed products. The Branch Chief, Assistant 

Director, Associate Director, and Director also perform ongoing monitoring and 

conduct reviews of draft and final products. 
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Further, OIA effectively processes and tracks requests for technical and 

enforcement assistance. For example, projects are recorded and monitored in its 

I-POD system. IE maintains a control list of foreign regulators contacted, 

including the names of the individuals and the dates and nature of the interaction. 

The IE Assistant Director is involved in all aspects of the unit’s activities from the 

receipt of requests for assistance to the assignment of work through its 

execution. TA projects come from a variety of sources: the SEC’s public website, 

foreign securities regulating organizations, attendees at the Institute seminars, 

and Commissioner requests. TA maintains a detailed activities calendar, which 

is discussed by TA management with the Director at bi-weekly meetings. 

Conclusion. Documented policies and procedures have enabled OIA’s

operating units to efficiently and effectively carry out the office’s mission. Written 

procedures are needed for OIA’s international travel-related duties to ensure the 

responsibility of overseeing SEC’s agency-wide international travel continues to 

be performed timely and appropriately. Having these procedures might well have 

served to reduce or eliminate the travel coordination deficiencies that are 

described in detail in Finding 2 of this report. 

Recommendation 1: 

The Office of International Affairs (OIA) should develop and implement written 

procedures for its travel coordination and review responsibilities. The 

procedures should cover OIA’s internal duties and responsibilities and 

coordination with the Office of the Chief Operating Officer, the U.S. 

Department of State, and Commission international travelers. 

Management Comments. OIA concurred with this recommendation. See 

Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA concurred with this 

recommendation. 

Finding 2: OIA’s Travel Administrative Activities 

Need Strengthening

Travelers submitted their FTMs late and FTMs did not 

always have required supporting documentation. Further, 

although OIA maintains a log of granted country clearances 

for international trips, the office does not provide them to the 

traveler. 

Employees traveling internationally are required to submit an FTM to OIA at least 

two weeks prior to going on a proposed trip. Our sample review of 47 FTMs 
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found deficiencies in the timeliness of submission, approvals, and completeness 

of required supporting documentation. 

FTM is the primary document that must be prepared for international travel. The 

FTM provides trip-related details and is reviewed by OIA before it is submitted to 

OCOO for final review and approval. Specifically, the FTM requires a description 

of the trip, purpose, travel dates, destination, personal leave days taken during 

the travel period, and an indication whether the host organization paid any costs. 

It is important the FTMs have sufficient detail, the required accompanying 

documents, and are timely submitted to OIA (i.e., at least two weeks prior to the 

trip’s departure date). The Travel Guide, located on the SEC Insider, states, 

SEC employees traveling on international assignments are 

required to complete and submit a Foreign Travel 

Memorandum to the OIA at least two weeks prior to the 

proposed trip. OIA requires two weeks notification prior to 

any official foreign travel in order to comply with State 

Department country clearance regulations and to obtain 

approval from the Executive Director's Office.7

As described in the Travel Guide, SEC international travelers are required to 

include a flight itinerary, daily itinerary, and program agenda (normally provided 

by the event organizer) with the FTM. For enforcement-related matters, a judicial 

assistance form is also required when staff travels to take testimony, interviews 

witnesses, or gathers evidence. These documents are needed to support the 

FTM. The flight itinerary corroborates the travel beginning and ending dates, the 

detailed program helps substantiate the purpose of the trip, and the day-to-day 

itinerary details the official daily activities and identifies personal leave days the 

traveler is approved to take. The documents should agree with information in the 

FTM, as well as personal leave requests that are approved in Quicktime, the 

SEC’s employee time and attendance system. 

As shown in Table 1 below, OIG judgmentally selected a sample of 47 FTMs to 

review and verify completeness, timeliness, and approval. Our sample was 

comprised of a cross-section of FTMs from both OIA and agency-wide staff who 

conducted official international travel during FYs 2008 to 2011. 

 

7

See SEC Insider. Effective May 2011, approvals are obtained from the OCOO. 
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 Table 1: FTMs Reviewed For FYs 2008 to 2011 

Year Sample Pool Number in 

Sample

2008 – 2011 SEC Agency-wide Staff 20

2010 - 2011 OIA Staff 20

2010 – 2011 OIA Director and Support 

Personnel

7

Total FTMs 

Reviewed

47

 Source: OIG generated. 

Our review of FTMs and supporting documentation found: 

 Twenty-four of 47 (51 percent) FTMs were dated less than two 

weeks prior to the start date of travel, contrary to SEC Travel 

Policy. 

 Nine of 47 (19 percent) FTMs did not have one or more of the 

required supporting documents. 

 The former Executive Director approved 9 of 47 (19 percent) FTMs 

on or after the traveler’s departure date. 

 Two of 47 (4 percent) FTMs did not have the former Executive 

Director’s approval. 

 One FTM did not have OIA’s signature documenting its review; 

however, it was approved by OCOO. 

The above deficiencies occurred due to non-compliance with SEC FTM 

submission requirements, the lack of communication among parties, and 

travelers not following up on missing items submitted to the OIA travel 

coordinator. Written procedures for OIA’s travel-related responsibilities, as 

discussed in Finding 1, do not exist and could have aided in reducing or 

eliminating the discrepancies OIG found. 

In discussing the timeliness of FTMs being prepared with OIA’s Director and 

Deputy Director for Policy, OIG was informed that for OIA staff’s international 

travel, the trip details are normally discussed well in advance of the trip and OIA’s

travel coordinator is notified of upcoming travel before the FTM is prepared. For 

agency-wide staff, OIG was told that OIA often discusses the travel with 

management in the traveler’s office or division. We were also told that lastminute travel is unavoidable and results in FTMs being submitted late. However, 

OIA agreed they recognize the importance of timely approving FTMs and

indicated that in the future OIA will monitor the process more closely. 

While we found delays in the former Executive Director’s approval of FTMs, 

these delays occurred prior to the transfer of international travel responsibilities 

to the OCOO in May 2011. FTMs in our sample requiring OCOO’s approval 

were timely approved when received. 
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Country Clearances. Prior to staff’s departing on international travel, OIA 

requests country clearance from the State Department, and provides them with 

the trip’s details. The request informs the State Department and Embassy 

officials about the travelers travel duration, purpose, country location, and lodging 

location. This information is important for informational and security purposes. 

OIA maintains a log of clearances that have been granted, but does not forward 

them to the traveler. We believe country clearances are an important document 

travelers should retain when they are out of the country because it documents 

their official and approved status to be in the foreign country. OIG determined 

that OIA should supply the country clearances to travelers. 

Disapproved International Travel. We found there were no disapproved 

international travel requests in our sample review of FTMs for FYs 2008 to 2011. 

We were told that questions and concerns identified during OCOO’s review are 

followed up and resolved with the traveling office or division, prior to the FTM 

being approved. 

Conclusion. OIG determined that FTMs were submitted late due to last-minute 

travel occurring and because SEC employees may not be familiar with FTM’s 

requirements and their responsibility to coordinate international travel with OIA. 

We further determined that some FTMs did not include the required documents 

due to the lack of oversight by the OIA travel coordinator or traveler’s not being 

aware of the Travel Guide’s requirement to include a flight itinerary, daily 

itinerary, program agenda, etc., when the FTM is submitted to OIA. We further 

determined that the country clearance is an important document that international 

travelers should be required to retain as part of their official documents for 

security purposes because it shows they are approved to be in the particular 

country. 

Recommendation 2: 

The Office of International Affairs and the Office of the Chief Operating 

Officer should periodically issue an SEC Administrative Notice or SEC 

Today reminder to Commission staff informing them of their requirement 

to prepare the Foreign Travel Memorandum (FTM) at least two weeks 

before the travel date and to provide the required supporting documents 

(e.g., flight itinerary, daily itinerary, and program agenda) with the FTM. 

Management Comments. OIA and OCOO concurred with this 

recommendation. See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA and OCOO concurred with this 

recommendation. 
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Recommendation 3: 

The Office of International Affairs (OIA) and the Office of the Chief 

Operating Officer should revise the Foreign Travel Memorandum (FTM) to 

include a statement on the FTM indicating when it must be submitted to 

OIA and a reason or justification for late submissions. 

Management Comments. OIA and OCOO concurred with this 

recommendation. See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA and OCOO concurred with this 

recommendation.

Recommendation 4: 

The Office of International Affairs and the Office of the Chief Operating 

Officer should establish controls to ensure that the Foreign Travel 

Memorandum contains all supporting documents prior to submitting it to 

the Office of the Chief Operating Officer for approval. 

Management Comments. OIA and OCOO concurred with this 

recommendation. See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA and OCOO concurred with this 

recommendation. 

Recommendation 5: 

The Office of International Affairs should forward granted country 

clearances to Commission staff prior to their departure on official 

international travel and request staff maintain the document while on travel 

status. 

Management Comments. OIA concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA concurred with this 

recommendation. 
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Report No. 508 

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Finding 3: The Justification for Taking 

International Trips Was Not Always Properly 

Documented 

The justifications for three international trips OIA staff took 

did not include sufficient support in the FTM regarding the 

benefits derived to the SEC from taking the trips in 

relationship to cost. This information is important when 

validating whether SEC travel is reasonable and consistent 

with its objectives. 

We identified three trips where the justification for taking the trips should have 

been better documented. These trips consisted of a: 

 November 2009 trip to Rome for a person in OIA to attend a oneday IOSCO meeting; 

 December 2009 trip to Dubai for a person in OIA to attend a oneday IOSCO meeting; and 

 March 2010 multi-stop trip for a person in OIA to attend a two-day 

IOSCO meeting in Sydney and a one-day European Capital 

Markets Institute conference in Brussels. 

OIG determined the FTMs and supporting documents for these trips did not 

provide sufficient information to validate whether the travel was reasonable and 

consistent with SEC’s objectives. Therefore, OIG examined whether the benefits 

of SEC staff attending these meetings were effective in relation to the cost of the 

trips. Our sample universe did not have any instances of such travel occurring in 

2011. 

OIA’s Deputy Director for Policy drafted and provided OIG a memorandum dated 

February 23, 2012 that justified the importance of having its staff attend the 

IOSCO meetings that were held in Rome and Dubai. Similarly, the Director 

provided OIG with a memorandum on February 22, 2012 that explained 

international standards were being developed at these meetings and it was 

important the SEC be physically present. 

With regards to the Sydney and Brussels meetings, OIA’s Director informed us 

that “attending meetings of IOSCO are really not optional.... We attend these 

meetings because the U.S. wants and needs to be present in the development of 

these standards.” He also stated that critical negotiations were conducted faceto-face among participants, and the SEC’s physical presence at these meetings 

was important. The FTM was prepared six days before the person departed for 

the trip, which violates the requirement that FTMs be submitted to OIA at least 

two weeks prior to the proposed trip departure date. The timely preparation 
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of FTMs would have provided OCOO with sufficient time to follow up and resolve

questions it may have had regarding the justification for sending staff on the trips. 

Currently, FTM’s instructions require a brief summary describing the nature of 

staff’s international travel, but they do not clearly require a justification regarding 

the benefits that are derived to the SEC. Having a justification on the FTM for 

international travel cost would provide transparency and an explanation as to 

why and how the trip benefits the SEC. We believe this will further aid OCOO in 

determining whether the trip should be approved. 

Conclusion. Based on our review of FTMs, supporting documents and 

interviews, we determined to validate whether travel is reasonable and consistent 

with SEC’s objectives, FTMs should include a justification for all international 

travel requests. 

It is incumbent upon agency personnel to make the best use of SEC’s resources. 

This requires the SEC maintain a record of the benefits related to proposed 

activities and costs. Not giving due consideration to the benefits of a particular 

trip in relation to its costs can result in an ineffective use of agency resources. 

Given the scrutiny of stakeholders regarding the SEC’s budget, all international 

trips and the related benefits must be reviewed and approved based on 

substantiated support and the needs of the SEC. 

The Deputy Director for Policy agreed FTM documentation could have better 

reflected the justification for the trips. OIA acknowledged the FTM should be 

revised to include language to make the benefits of international trips clearer. 

Recommendation 6: 

The Office of International Affairs in coordination with the Office of the 

Chief Operating Officer should revise the Foreign Travel Memorandum to

include a justification section. The justification should provide a clear 

explanation as to why and how the trip benefits the Commission and 

should indicate that the trip is warranted. 

Management Comments. OIA and OCOO concurred with this 

recommendation. See Appendix V for management’s full 

comments. 

OIG Analysis. We are pleased that OIA and OCOO concurred 

with this recommendation. 
The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

Report No. 508 

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Finding 4: OIA’s Staff’s Compliance with Federal 

Travel Regulations and SEC Travel Policies Needs 

Improvement Regarding International Travel 

Our review of expense reports found they were not timely 

submitted to OFM. Further, we found compliance related to 

business class travel, taxis and airport parking, per diem for 

hotels, meals and incidental expenses, and compensatory 

time for travel needs to be improved. 

Our expense report review revealed that 61 percent (25 of 41) of the reports in 

our sample were not submitted to OFM within five working days after the 

travelers trip was completed, as required by FTR Section 301-52.7 and SEC 

Travel Policy, Question 92. When conducting official international travel, SEC 

staff is required to submit an expense report to OFM within 5 working days after 

the trip ends. OFM’s Systems and Travel Branch reviews the expense reports to 

ensure compliance with FTR, 41 Code of Federal Regulations, Chapters 300-304

and for appropriateness. 

OIA conducts certain overseas technical assistance and training under an interagency agreement the SEC has with USAID. The agreement stipulates that: 

“Except as USAID may otherwise agree in writing, all travel 

financed under this Agreement shall be subject to the 

Federal Travel Regulations.”

To review OIA’s international travel we selected a sample of 41 expense reports.8 

OIG randomly selected 21 expense reports covering FYs 2008 to 2011. To 

ensure the sample included a variety of SEC staff and countries, we then 

selected 20 additional expense reports that covered FYs 2010 and 2011, for a 

total of 41 expense reports. 

FTR and SEC Policy Covering Expense Reports. FTR and SEC Travel Policy 

require that expense reports are submitted to OFM within five working days of a 

trip’s completion. Specifically, FTR section 301-52.7 states, 

Unless your agency administratively requires you to submit 

your travel claim within a shorter timeframe, you must submit 

your travel claim as follows: (a) Within 5 working days after 

you complete your trip or period of travel....

 

8

In addition to OIA staff’s expense reports, our sample included two expense reports from other SEC staff 

who participated on a technical assistance visit with OIA. 
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FTR policy is reinforced by the February 28, 2011 memorandum that was issued 

by the Chief Financial Officer, “Required Expense Report Filing within 5 Days for 

All SEC Employees.” Most expense reports we reviewed were submitted later 

than five working days after the traveler had completed their trips. Of the 41 

expense reports in our sample, 25 (61 percent) were submitted late to OFM. 

Further, 9 of the 25 were submitted 1 to 2 months after the trips’ completion, and 

7 were submitted 2 or more months after the trips were completed. Table 2 

illustrates the sample selection of 25 late expense reports we reviewed by FY. 

Table 2: Late Expense Reports 

Reviewed by Fiscal Year 

Fiscal Year Late Expense 

Reports

2008 2

2009 5

2010 10

2011 8

Total 25

 Source: OIG Generated. 

OIA’s Deputy Director for Policy explained that upon returning from overseas 

trips OIA staff should have prioritized getting their expense reports completed. 

The late submission may have occurred due to work demands such as handling 

office issues or having to follow up on trip-related items. Other reasons given for 

the lateness were that OIA staff may be confused as to what they are required to 

submit and when it should be submitted. An OIA staff told OIG that he thought 

the submission process was achieved when he provided OIA’s support person 

with receipts and supporting documents to prepare his expense report. 

FTR and SEC Travel Policy Covering Business Class. FTR Sections 301-

10.123 and 301-10.125, and SEC Travel Policy, Questions 21 and 23, are 

consistent as to when a traveler can fly business class. The technical 

requirements include origin and/or destinations outside the continental U.S. and 

scheduled flight time that is in excess of 14 hours duration, unless the traveler 

has a medical exception. Outbound and return flights are separately considered 

in making this determination. Business class is not authorized if the traveler is 

not required to report for duty the day after arriving at the destination. 

Additionally, travelers are expected to select the least expensive class of service 

that meets their needs and use business class only if it is necessary in achieving 

the agency’s mission. 

Based on our sample universe, OIG reviewed an air ticket issued for a series of 

flights that required stopovers en route to two different meetings, as discussed in 

Finding 3. The flights were: 
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(1) Washington D.C. to Sydney Australia, 

(2) Sydney Australia to Brussels Belgium, and 

(3) Brussels to Washington D.C. 

Business class tickets were issued for all legs of these trips. Our review found 

that the nonstop flight from Brussels to Washington D.C. was less than 14 hours. 

The expense report did not indicate an exception for booking the flight in 

business class. The traveler spent one day in Brussels to attend a meeting, then 

took a leave day before he flew back to Washington D.C. The traveler informed 

OIG he realized upon checking-in at the Brussels airport that he was booked in 

business class and attempted to change the ticket to coach. However, the airline 

representative informed him that it would cost an additional amount to change 

the ticket at that point, so he did not change it. 

In another instance, OIG reviewed the expense reports for an OIA employee and 

a non-OIA employee, who went on a Technical Assistance trip that was funded 

by USAID. The employees flew separately in business class from Washington, 

D.C. to Nairobi, Kenya, and immediately upon their arrival at the destination; both 

took leave before the Technical Assistance program started. Because they were 

not required to report for duty the day after arriving in Nairobi, Kenya, and each 

person took personal leave prior to the start of official business, they were not 

authorized to travel using business class in accordance with SEC Travel Policy, 

Question 23. Also, according to FTR Section 301-10.123, travelers “should 

consider the least expensive class of travel that meets their needs.” Our 

expense report review further found that the OIA employee erroneously charged 

$188.18 for hotel cost on his expense report for the first night he arrived in 

Nairobi. This situation is akin to a rest period that can be taken when coach 

travel is used. Because this employee took leave, he was not entitled to be

reimbursed for hotel expenses for his first night stay in Nairobi. 

FTR and SEC Travel Policy Covering Taxis and Airport Parking. OIG’s

review of fees associated with taxis and airport parking found that travelers 

occasionally drove their vehicles to the airport and parked there for the duration 

of their trips. They then included airport parking fees on their expense reports. 

In three cases, we found that the round-trip cost of taking a taxi between either 

the traveler’s home or office and the airport was less than the cost of parking at 

the airport. FTR Section 301-10.308 states: “Your agency may reimburse your 

parking fee as an allowable transportation expense not to exceed the cost of taxi 

fare to/from the terminal.” 

Information Submitted With the Expense Reports. Upon returning from 

travel, OIA travelers informed OIG they give their receipts to an OIA support staff 

person who then prepares their expense report. To identify expenses that do not 

require a receipt, OIA travelers normally attach a description of the nature and 

amounts of charges they are seeking to be reimbursed. We found that the 

presentation and level of detail of this information varied from person-to-person. 
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For example, the information provided by one traveler was in a detailed narrative; 

another person used an abbreviated handwritten itemization of charges. 

Similarly, for many trips, particularly the technical assistance trips, meals were 

provided on-site by the host organization, and staff itemized the items to reduce 

their total per diem amounts. 

One report we reviewed included two non-receipted items for taxi and medical 

insurance that amounted to $113.30. These charges mistakenly were not 

included on the expense report, so they were not reimbursed. The traveler did 

not notice the error when he submitted this expense report for processing. 

In another expense report we reviewed, the traveler’s list of meals that were 

provided by the host (i.e., breakfast, lunch, dinner) varied in amount each day. 

However, the daily amounts on the expense report generally did not change. 

The total per diem on the expense report agreed with the traveler’s list. The 

traveler did not know why the daily per diem on the expense report differed from 

the list she prepared. The person who prepared the expense report no longer 

works in OIA. We determined this discrepancy may have occurred due to 

confusion by the person who prepared the expense report. 

Best Practice. When we brought the above matter to the Deputy Director for 

Policy and TA’s Branch Chief attention, the Branch Chief immediately developed 

a standardized form to capture per diem and other expenses in a single location. 

The form will be used by travelers to accumulate their expenses, including daily 

per diem amounts. Having a comprehensive standardized form should make it 

easier for OIA travelers to properly capture all charges on the expense report. 

Also, the standardized form will make it easier for support staff who may prepare 

the expense reports to identify all applicable charges. 

Per Diem, Meals, and Incidental Expenses Associated With USAID-Funded 

Technical Assistance Program. OIG reviewed the expense reports for the two 

employees that went on the OIA technical assistance trip to Nairobi, Kenya. Our 

review found that one of the travelers charged zero per diem for the two flight 

days to Nairobi. He then took two personal days off and charged 75 percent of 

the overall per diem ($88.50) for the day before the program commenced. 

“Meals and Incidental Expenses (M&IE) Breakdown” issued by the U.S. General 

Services Administration and linked to FTR Section 301-11.318, states: “The first 

and last calendar day of travel is calculated at 75 percent.” Further, SEC Travel 

Policy, Question 74 mirrors the FTR and states: if traveling more than 24 hours, 

“on the day you depart, you will receive 75 percent of your M&IE allowance 

(regardless of the time you left) for your TDY location....” Accordingly, the 

traveler was entitled to 75 percent per diem, or $88.50, for the day of departure, 

plus regular per diem of $188 for the day before the program. Further, the 

justification for early departure on the expense report was incorrect. It states, 
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“Leave exception. Traveler left 3 days early in order to prepare for the meeting in 

Kenya.” However, the employee took leave before official business started. 

Lunch was provided by the host during the five-day program. However, the two 

travelers did not exclude $30 in per diem for lunch that was provided on their 

respective expense reports. FTR section 301-11.18 states: “....your M&IE 

allowance must be adjusted for meals furnished to you by the Government...by 

deducting the appropriate amount shown in the chart...in Appendix B of this 

chapter for meal deductions for OCONUS and foreign travel.”

Calculating Compensatory Time For Travel 

Section 203 of the Federal Workforce Flexibility Act of 2004 (Public Law 108-411, 

October 30, 2004) authorized compensatory time off for government employees 

who travel from their official duty station outside of normal working hours. As a 

result, the SEC issued “Human Capital Directive and Procedure” policy on July 

13, 2005 and revised it on May 9, 2006 (Compensatory Time for Travel policy). 

The Compensatory Time for Travel policy provides procedural guidance to SEC 

employees. When compensatory time for travel is earned it must be used within 

26 pay periods subsequent to the work period giving rise to it, or it is forfeited. 

Compensatory time for travel is forfeited when an employee leaves the SEC, 

which includes being transferred to another Federal agency. Compensatory time 

for travel is never paid. 

To record compensatory time for travel, the Commission developed and issued 

the form, “Worksheet for Determining Amount of Compensatory Time for Travel”

(SEC Worksheet), which employees requesting compensatory time for travel are 

required to complete. While the SEC Worksheet requests total compensatory 

time for travel hours by day, it does not require a daily breakout of the 

components of these hours, such as airport waiting time, flying time, time from 

the foreign airport to the hotel, meal periods, and travel spent during regular 

working hours. To provide greater detail, OIA developed an additional form, 

“Compensatory Time for Travel Worksheet,” (OIA Worksheet) to complement the 

SEC Worksheet. OIA travelers fill out both forms and submit them to the OIA 

reviewer, who currently is the Deputy Director for Operations, and then to the 

timekeeper to record into Quicktime. 

Currently, a flight itinerary is not required to accompany the compensatory time 

for travel worksheets. However, it is needed to verify the calculation’s

correctness. Our review of OIA’s compensatory time travel files for 2010 and 

2011 found that flight itineraries were not always attached to the compensatory 

time for travel worksheets. 

Also, OIG found inconsistencies in how OIA travelers addressed time zone 

changes on the OIA Worksheet. Some travelers used the actual departure and 

arrival times and footnoted the number of time zones traveled. Others noted 
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the number of hours traveled. While either method is acceptable, using the origin 

and destination’s actual flight times best reflects the times on the flight itinerary 

and thus makes the compensatory time for travel calculation easier to review. 

We randomly selected six compensatory time for travel submissions from our 

original sample of expense reports to test the calculations. For each submission 

we obtained the: 

(1) SEC and OIA Worksheets, 

(2) flight itinerary, 

(3) FTM, and 

(4) time sheets for the travel periods. 

Our review found that two of the six calculations had discrepancies in the 

amounts as follows: 

 For two of the six trips the travelers included as compensatory time for 

travel their commute from home to the airport at the beginning of the trip 

and from the airport to home at the end of the trip. According to 

Compensatory Time for Travel policy “the travel time outside regular 

working hours to or from the terminal is considered to be equivalent to 

commuting time and is not creditable as time in a travel status.”

 For one of the six trips travel spanned two pay periods, but the 

compensatory time for travel hours were all recorded in the first pay period 

in Quicktime. Because compensatory time for travel expires 26 pay 

periods after the period of the related travel, it is important that the time is 

recorded in the proper pay period. Also, OIA’s timekeeper informed OIG 

that she “smoothes” compensatory time for travel hours among the 

employee’s days of travel giving rise to compensatory time for travel when 

she records them. For example, if 40 hours of compensatory time for 

travel is earned and there are four days of compensatory time for travelrelated travel, she enters 10 hours for each day into Quicktime. This 

methodology can lead to incorrect timing if the employee’s travel spans 

more than one pay period. 

 For a multi-flight trip in December 2009 that spanned approximately 22

hours in each direction, only one-half hour in total was deducted on the 

SEC Worksheet for meals. Compensatory Time for Travel policy states: 

“Meal periods during actual travel time or waiting time are not creditable 

as time in a travel status.” Further, the flight occurred over two workdays. 

However, the traveler did not deduct the normal 8 working hours on the 

second day of the flight, which spanned about 11 hours, in arriving at the 

compensatory time for travel for that day. 
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We also found that a traveler was approved to take leave the Friday after 

completing an official meeting that was held on Thursday. This information was 

correctly noted in the FTM and per diem and lodging was not charged to the 

expense report. However, the time was recorded in Quicktime as an official work 

day under the work code “010.” FTM guidance states “Traveler should arrive the 

day before and leave the day after the event. Any days before and/or after the 

event that are not travel days will be counted as personal days.” Further, “Any 

days that traveler is not conducting official duties or that are not travel days, are 

considered personal days.” The traveler told us that he recalled having difficulty 

entering the time in Quicktime and requested assistance from an OIA support 

staff person. This item was not corrected in Quicktime. 

Because approved compensatory time for travel results in employees earning 

leave, it is important that documents supporting requests for compensatory time 

for travel be properly prepared and questions that may be followed up 

immediately. Also, OIA’s timekeeper must ensure that when compensatory time 

for travel is approved for employees, the hours are properly recorded into

Quicktime. 

Conclusion. Expense reports should be submitted to OFM within five working 

days after the trip is completed, in accordance with the FTR and SEC policy 

covering travel. Based on our review of expense reports OIG determined this did 

not occur due to employees’ work demands when they returned from travel and 

employees being unclear about when and what they are required to submit to 

OFM. Further, our review of business class travel, taxis and airport parking, per 

diem for hotels, M&IE, and compensatory time for travel found that OIA staff’s

understanding of travel and Compensatory Time for Travel policies needs to be 

strengthened. 

Recommendation 7: 

The Office of International Affairs should establish procedures and 

periodically provide training to its staff on the proper application of Federal 

travel regulations and Commission travel policies in: trip planning, 

preparing expense reports, and in determining and recording 

compensatory time for travel. 

Management Comments. OIA concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA concurred with this 

recommendation. 
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Recommendation 8: 

Office of International Affairs should periodically remind staff about the 

requirement to submit expense reports within five working days after 

completion of travel to the Office of Financial Management. 

Management Comments. OIA concurred with this recommendation. 

See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA concurred with this 

recommendation. 

Recommendation 9: 

The Office of International Affairs should ensure its timekeeper records 

compensatory time for travel in the pay period that the hours are earned. 

Management Comments. OIA concurred with this recommendation. 

See Appendix V for management’s full comments. 

OIG Analysis. We are pleased that OIA concurred with this 

recommendation. 

Finding 5: Some International Travel Information 

on SEC’s Internal Website Is Outdated 

The “International Travel” section on the SEC Insider 

contains information that is outdated and incorrect.

As previously mentioned, staff conducting official SEC foreign travel can obtain 

assistance in preparing for their trips by reviewing the requirements that are 

discussed in the “International Travel” site located on the SEC Insider. The site 

provides guidance to employees on the SEC’s international travel process, which 

is coordinated by OIA and travel-related procedures. The site further contains 

the International Travel Overview and Travel Guide links, as well as links to 

required forms and other useful information. 

The International Travel Overview provides a summary of OIA’s responsibilities 

regarding foreign travel. The Travel Guide is designed “to help SEC staff 

determine the necessary steps required for international travel,” and it contains 

information on how to obtain a passport and visa and preparing the FTM and 

supporting documents. 
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The SEC Insider is the primary source used to communicate the SEC’s 

international travel processes and procedures. Accordingly, it is important this 

information is current and the site is periodically reviewed and updated as 

needed. Having outdated or inaccurate travel information on the SEC Insider 

results in travelers’ being misinformed and could lead to them not taking needed 

action, or obtaining and providing needed documents to OIA in a timely manner. 

OIG found that some international travel information is outdated. For example, 

the International Travel Overview states that “The Office of International Affairs 

(OIA) coordinates and approves all international staff travel for the SEC.” OCOO 

actually approves SEC staff’s international travel. OIA receives the FTM and 

supporting documents and reviews them for completeness, duplication of trips by 

other SEC staff, and for security and related issues, then forwards the 

documents to OCOO for final review and approval. 

Further, both the Travel Guide and the International Travel Overview refer to the 

former Office of the Executive Director who left the SEC in May 2011. As 

previously noted, the former Executive Director’s travel approval responsibilities 

were transferred to OCOO in May 2011. In addition, the Travel Guide indicates 

the Request for Participation in an Outside Meeting form “must be faxed to OIA 

along with your Foreign Travel Memorandum....” However, according to an SEC 

Administrative Regulation, the traveler should actually forward this form to OFM. 

OIA’s Director and the Deputy Director for Policy told us they are aware that 

discrepancies exist and will have the information reviewed and updated as 

needed. 

Conclusion. The International Travel site on the SEC Insider is the primary 

source used to communicate the SEC’s international processes and procedures 

to employees. Accordingly, it is important the site is current. OIG found some 

information was outdated or inaccurate because OIA and OCOO had not 

reviewed the site to ensure the information was accurate. Such periodic reviews 

are essential to ensure that SEC staff reviews current, up-to-date information 

when planning their official international travel. OIA and OCOO informed OIG 

the site has now been reviewed and updated. 

Recommendation 10: 

The Office of International Affairs and the Office of the Chief Operating 

Officer should coordinate with appropriate Securities and Exchange (SEC) 

offices and review the guidance located on the SEC Insider related to the 

SEC’s international travel processes and procedures, and regularly 

updates this information as needed. 
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Management Comments. OIA and OCOO concurred with this 

recommendation. See Appendix V for management’s full comments.

OIG Analysis. We are pleased that OIA and OCOO concurred with this 

recommendation. 
Appendix I 

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Acronyms and Abbreviations 

A-123 Office of Management and Budget Circular A123 “Management’s Responsibility for Internal 

Control”

CL Comparative Law and Regulation

COSO Committee of Sponsoring Organizations of the 

Treadway Commission

Compensatory 

Time for Travel 

Policy

SEC Human Capital Directive and Procedure

Enforcement Division of Enforcement

FTM Foreign Travel Memorandum

FTR Federal Travel Regulation

FY Fiscal Year

IE International Enforcement

IOSCO International Organization of Securities 

Organizations

I-POD International Pod

OCOO Office of the Chief Operating Officer

OFM Office of Financial Management

OIA Office of International Affairs

OIA Worksheet OIA’s Compensatory Time for Travel 

Worksheet

OIG Office of Inspector General

PAR Performance and Accountability Report

Quicktime SEC’s Time and Attendance System

RP International Regulatory Policy

SEC or 

Commission 

U.S. Securities and Exchange Commission

SEC Insider SEC’s Internal Website 

SEC Travel 

Policy

Travel Policy for SEC Employees

SEC 

Worksheet

Worksheet for Determining Amount of 

Compensatory Time for Travel

State 

Department

U.S. Department of State

TA Technical Assistance

Travel Guide International Travel Guide

U.S. United States

USAID U.S. Agency for International Development
Appendix II

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Scope and Methodology 

As part of our annual audit plan the OIG conducted an audit of OIA’s internal 

operations and oversight for SEC employees conducting official international 

travel. 

We conducted this performance audit 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 determined that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 

Scope. The scope of our audit covered FYs 2008 to 2011. Our fieldwork was 

conducted from November 2011 to July 2012. The audit focused on assessing 

the internal operations of OIA functions, policies, procedures and official 

international travel by SEC staff. The scope further included identifying areas for 

improvement to reduce or eliminate fraud, waste, and abuse. 

Methodology. We reviewed OIA’s policies, procedures, and controls over its 

program activities and its tracking and processing of requests for technical and 

enforcement assistance. Further, we conducted interviews with OIAs Director, 

Deputy Directors, Assistant Directors, Branch Chiefs, other OIA staff, OCOO 

staff, as well as agency staff. 

To determine if OIA’s controls over were operating effectively, we conducted 

walkthroughs of the procedures, processes, and controls with respect to tracking 

and processing requests for technical assistance and enforcement assistance. 

We then tested the documentation for international trips, consisting of the FTM 

and supporting documents, maintained in OIA’s travel files. Also, we reviewed 

the FTM and supporting documents for completeness and ascertained if it was: 

appropriately reviewed and approved and submitted timely to OIA and the 

OCOO. 

In addition, we tested a sample number of the expense reports for international 

travel that was taken by OIA’s staff for compliance with Federal travel regulations 

and SEC travel policy. To do our testing we developed a statistical sample of 

OIA’s staff’s international travel that occurred during the scope of our audit. To 

ensure the later years were adequately covered in our sample and to ensure the 

testing sample included a mix of countries and SEC staff, our sample universe 

consisted of a statistical sample and a judgmental sample of expense reports for 

FYs 2010 and 2011 in our sample universe. 
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Finally, we reviewed OIA’s planning process for the Securities Enforcement and

Securities Market Development Institutes that were held at SEC’s headquarters’

location in November 2011 and April 2012. OIG attended several sessions. We 

also reviewed a sample number of written comments attendees provided to OIA 

regarding the sessions. 

Internal Controls. We based our assessment of OIA’s internal controls that 

were significant to our audit objectives on the Committee of Sponsoring 

Organizations of the Treadway Commission framework, which includes control 

environment, control activities, information and communication, and monitoring. 

Among the internal controls that we assessed were OIA’s controls over its 

program activities and its processing and tracking of requests for technical 

assistance and enforcement assistance, and its controls over the coordination 

and processing of FTMs. 

Judgmental and Statistical Sampling. OFM’s Systems and Travel Branch 

provided us with a list of OIA international travel expense reports that covered 

FYs 2008 to 2011. The audit universe of expense reports OIG obtained 

consisted of 404. We used the EZ Quant Statistical Analysis Audit tool to 

generate 21 expense reports for our sample testing pool. This sample was 

designed to project rates of occurrence with 90 percent confidence that the point 

estimate is within +- 20 percent of the audit universe. 

Additionally, to complement the statistical sample, we judgmentally selected 20

expense reports that covered FYs 2010 and 2011, for a total of 41 expense 

reports. This was done to give added coverage to later years and to ensure a mix 

of countries and travelers were included in our sample. 

To review OIA’s travel files for international trips SEC staff took, we selected a 

judgmental sample of 40 FTMs for OIA and non-OIA staff. We further 

judgmentally selected 7 foreign travel memoranda from the Director’s office files 

to include in our sample. 

Prior Audit Coverage. In 1998 OIG conducted an audit of OIA’s functions and 

issued the report “International Technical Assistance,” Audit No. 284, on October 

27, 1998, related to the audit. Overall the report found that OIA’s process for 

providing technical assistance to foreign securities regulators was operating 

efficiently and effectively. The report contained 13 recommendations that have 

since been appropriately closed. 
Appendix III

The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

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Criteria

OMB Circular A-123 (Revised), Management’s Responsibility for Internal 

Control, December 21, 2004. Establishes that management has a fundamental 

responsibility to develop and maintain effective internal control. 

U.S. Securities and Exchange Commission FY 2011 Performance and 

Accountability Report, Pages 66 and 69. Describes areas of involvement by 

OIA in achieving the SEC’s performance goals for FY 2011. 

FTR, 41 CFR, Chapters 300-304. Prescribes travel policies and procedures to 

be followed by federal government employees. Specific FTR policies that pertain 

to this audit are as follows: 

FTR Section 301-10.123: “Government travelers are required to 

exercise the same care in incurring expenses that a prudent person 

would exercise if traveling on personal business when making 

official travel arrangements, and therefore, should consider the 

least expensive class of travel that meets their needs.” 

FTR Section 301-10.123 (b): “Your agency may authorize/approve 

business-class accommodations if any of the following apply...(6) 

Where the origin and/or destination are OCONUS [outside the 

continental United States], and the scheduled flight time, including 

stopovers and change of planes, is in excess of 14 hours....”

FTR Section 301-10.125 (a): “You may use the 14-hour rule to 

travel via other than coach-class when...(3) You are required to 

report to duty the following day or sooner.”

FTR Section 301-10.308: “Your agency may reimburse your 

parking fee as an allowable transportation expense not to exceed 

the cost of taxi fare to/from the terminal.”

FTR Section 301-11.318: “...your M&IE allowance must be 

adjusted for meals furnished to you by the Government...by 

deducting the appropriate amount shown in the chart...in Appendix 

B of this chapter for meal deductions for OCONUS and foreign 

travel.”

Meals and Incidental Expenses (M&IE) Breakdown issued by the 

U.S. General Services Administration and linked to FTR Section 
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301-11.318: “The first and last calendar day of travel is calculated 

at 75 percent.”

Travel Policy for SEC Employees, issued by the SEC Office of Financial 

Management, January 6, 2010. Provides detailed travel policy and procedural 

guidance in the form of a numbered series of 111 Questions and Answers. 

Specific travel policies that pertain to this audit are as follows: 

SEC Travel Policy, Question 20: “Approving Officials must ensure 

that premium travel and/or actual subsistence is only utilized if 

necessary to meet the SEC mission and cannot be reasonably 

avoided. The intended use of premium travel and/or actual 

subsistence must not be misunderstood or misconstrued as a 

matter of convenience.” 

SEC Travel Policy, Question 21: “OFM Authorization Officials must 

ensure all requests for premium travel or lodging...(a) Comply with 

FTR Section 301-10.123 for premium travel...(b) Meet criteria for 

approval of premium travel that will be consistently applied to all 

SEC staff and management.” ...(f) Are validated to ensure premium 

travel and upgraded lodging is only approved when necessary and 

in direct support of the SEC mission and not based on SEC staff 

personal preferences or convenience.” 

SEC Travel Policy, Question 23: 

 “You are not authorized premium class accommodations 

when you are not required to report for duty the following 

day, whether at the PDS [permanent duty station] or a TDY 

[temporary duty] location, unless there are medical needs 

that have been certified by a competent medical authority.”

 “Also, if you are approved to take annual leave at the TDY or 

relocation point prior to the start of official business, or are 

approved to take annual leave upon reporting to a PDS 

location, neither a rest stop nor premium class [flight] 

accommodations are authorized, unless there are medical 

needs that have been certified by a competent medical 

authority.”

 “Just because your approving official authorized premium 

class [flight] accommodations for the outbound part of your 

TDY does not automatically justify the use of the premium 

accommodations for the return trip. The same tests 
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The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

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regarding critical nature, authorizing rest stops, and/or the 

availability of rest periods should all be considered by 

authorizing officials.”

 “Please note that the length of the flight alone (14 or more 

hours) does not justify authorizing premium class. When 

considering premium class accommodations for trips over 14 

hours, approving officials should consider: (a) The 

constructive cost...(b) The purpose and urgency of the 

trip....”

SEC Travel Policy, Question 51: “When the OIA receives your Foreign 

Travel Memorandum, the travel coordinator will review your application 

and advise you if a visa is required for the countries listed on your trip. 

Every embassy has different processing times. If a visa is required for 

your trip, the OIA coordinator will provide you with the necessary 

application. It is your responsibility to return the completed visa 

application at least two weeks prior to departure.”

SEC Travel Policy, Question 59: “SEC requires all employees to have a 

country clearance prior to departure. OIA will assist you with your country 

clearance. You should contact OIA at least two weeks prior to the start of 

your trip.”

SEC Travel Policy, Question 74: “...on the day you depart, you will 

receive 75 percent of your M&IE allowance (regardless of the time you 

left) for your TDY [temporary duty] location.”

SEC Travel Policy, Question 92: “You need to file your travel claim within 

five days of completing your travel....”

Memoranda From the SEC’s Chief Financial Officer to SEC Employees

 Required Expense Report Filing Within 5 days for All SEC 

Employees, February 28, 2011. Reminds SEC staff that

the FTR and SEC Travel Policy requires that travel expense 

reports are required to be submitted within five working days 

after trip completion.

 Redefining the Local Travel Area Policy for All SEC 

Employees, February 16, 2011. Defines the SEC local travel 

area.
Appendix III

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Interagency Agreement Between the United States Agency for International 

Development and the United States Securities and Exchange Commission. 

Provides for certain overseas technical assistance and training that is conducted 

by OIA and is funded by USAID. 

Federal Workforce Flexibility Act of 2004, Public Law 108-411 (October 30, 

2004). Authorizes compensatory time off for time in travel status away from the 

employee’s official duty station outside of normal working hours. 

Securities and Exchange Commission Human Capital Directives and 

Procedures, July 13, 2005 and Revised May 9, 2006 (Issued by SEC’s Office 

of Human Resources). Provides policy and procedural guidance to SEC 

employees on earning and using compensatory time for travel. 

International Travel site on the SEC Insider internal website. Provides 

guidance to SEC employees on international travel in various sections: 

International Travel Overview, International Travel Guide, International Travel 

Guidelines, Forms, and Useful Links. 
Appendix IV

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List of Recommendations 

Recommendation 1: 

The Office of International Affairs (OIA) should develop and implement written 

procedures for travel coordination and review responsibilities. The procedures 

should cover OIA’s internal duties and responsibilities and coordination with the 

Office of the Chief Operating Officer, the U.S. Department of State, and 

Commission international travelers. 

Recommendation 2: 

The Office of International Affairs and the Office of the Chief Operating Officer 

should periodically issue an SEC Administrative Notice or SEC Today reminder 

to Commission staff informing them of their requirement to prepare the Foreign 

Travel Memorandum (FTM) at least two weeks before the travel date and to 

provide the required supporting documents (e.g., flight itinerary, daily itinerary, 

and program agenda) with the FTM. 

Recommendation 3: 

The Office of International Affairs (OIA) and the Office of the Chief Operating 

Officer should revise the Foreign Travel Memorandum (FTM) to include a 

statement on the FTM indicating when it must be submitted to OIA and a reason 

or justification for late submissions.

Recommendation 4: 

The Office of International Affairs and the Office of the Chief Operating Officer 

should establish controls to ensure that the Foreign Travel Memorandum 

contains all supporting documents prior to submitting it to the Office of the Chief 

Operating Officer for approval. 

Recommendation 5: 

The Office of International Affairs should forward granted country clearances to 

Commission staff prior to their departure on official international travel and 

request staff maintain the document while on travel status. 
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The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

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Recommendation 6: 

The Office of International Affairs in coordination with the Office of the Chief 

Operating Officer should revise the Foreign Travel Memorandum to include a 

justification section. The justification should provide a clear explanation as to 

why and how the trip benefits the Commission and should indicate that the trip is 

warranted. 

Recommendation 7: 

The Office of International Affairs should establish procedures and periodically 

provide training to its staff on the proper application of Federal travel regulations 

and Commission travel policies in: trip planning, preparing expense reports, and 

in determining and recording compensatory time for travel. 

Recommendation 8: 

Office of International Affairs should periodically remind staff about the 

requirement to submit expense reports within five working days after completion 

of travel to the Office of Financial Management. 

Recommendation 9: 

The Office of International Affairs should ensure its timekeeper records 

compensatory time for travel in the pay period that the hours are earned. 

Recommendation 10: 

The Office of International Affairs and the Office of the Chief Operating Officer 

should coordinate with appropriate Securities and Exchange (SEC) offices and 

review the guidance located on the SEC Insider related to the SEC’s international 

travel processes and procedures, and regularly updates this information as 

needed.
Appendix V 

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Management Comments 
Appendix V 

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Appendix V 

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Appendix V 

The Office of International Affairs Internal Operations and Travel Oversight September 30, 2012 

Report No. 508 

Page 38
Audit Requests and Ideas 

The Office of Inspector General welcomes your input. If you would like to 

request an audit in the future or have an audit idea, please contact us at: 

U.S. Securities and Exchange Commission 

Office of Inspector General 

Attn: Assistant Inspector General for Audits (Audit Request/Idea) 

100 F Street, N.E. 

Washington D.C. 20549-2736 

Tel. #: 202-551-6061 

Fax #: 202-772-9265 

Email: oig@sec.gov 

Hotline 

To report fraud, waste, abuse, or mismanagement at the SEC, 

contact the Office of Inspector General at: 

Phone: 877.442.0854 

Web-based Hotline Complaint Form: 

www.reportlineweb.com/sec_oig