Obama Cuts Travel and Conference Spending with New Rules

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In April 2012,  the General Services Administration (GSA) caused a scandal over an excessive Las Vegas conference, for putting on an $823,000 Las Vegas-area conference for 300 GSA employees in 2010.  At the time Rossi Ralenkotter, president and chief executive of the Las Vegas Convention and Visitors Authority,did not expect the scandal to cut into travel spending. However, conscious of public opinion and with tighter administration overview, the Obama administration has placed new restrictions on federal travel and meetings.

In a memo to government officials, Jeffrey D. Zients, Acting Director of the Office of Management and Budget, said, “Each agency shall spend at least 3% less on travel expenses covered by this memorandum than in FY2010.”  Sen. Joseph I. Lieberman said the guidelines are a serious effort to save and eliminate the abhorrent waste, abuse, and mismanagement of taxpayer dollars.

The Office of Management and Budget is issuing guidance to Federal agencies to increase efficiency and strengthen accountability in the areas of travel, conferences and fleet management and to scrutinize travel and conference budgets. Last September, OMB conducted reviews of agency’s spending in travel and conference spending. As a result, Federal agencies have begun implementing plans to achieve nearly $1.2 billion in travel and conference savings.

Already, DHS has made more than $13 million in travel cost avoidance and the State Department will hold the majority of their conferences in government facilities as opposed to renting hotels.  Similarly, USDA has reduced travel spending by $47 million by reducing the number of conferences and increasing the use of video conference technology.  So far, these efforts and others have already produced more than $280 million in reduced costs in the first quarter of  2012 compared to 2010.

The memo by Mr Zients outlined new guidance for federal conferences and travel spending :

  • Require agencies to decrease spending on travel by 30 percent
  • Require Deputy Secretaries to review any conference where the agency spending could exceed $100,000
  • Prohibit agencies from spending over $500,000 on a conference unless the agency’s Secretary approves a waiver

While some criticized the moves as unworkable by not being clear about what constitutes a meeting or conference, the concept is likely to be appreciated at least by the public who require greater accountability.

Event organizers that are focused on US government agencies can expect to see a greater degree of oversight and transparency requirements.  It is expected that the cost cutting will affect hotels, convention centers and agencies alike as they try to adapt to the new cost cutting requirements.

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