Independent Counsel: Travel by Kenneth W. Starr (Correspondence,
01/09/98, GAO/AIMD-98-55R).

Pursuant to a congressional request, GAO reviewed travel reimbursements
for independent counsel Kenneth W. Starr for the 6 months ended
September 30, 1996, focusing on: (1) detailed information for each
reimbursement; and (2) whether each reimbursement complied with federal
travel regulations.

GAO noted that: (1) reimbursements for meals and incidentals,
transportation, or other related costs during this period were proper;
(2) however, Mr. Starr was erroneously reimbursed for some of his
lodging costs; (3) the erroneous reimbursements, totalling $9,926,
appeared to have been caused by an administrative error in applying
federal travel regulations to independent counsels whose primary office
is away from their residences and who lease an apartment; (4) GAO found
no indication of misrepresentation or that Mr. Starr or his staff were
aware that these reimbursements were not allowed under the federal
travel regulations; (5) GAO generally determined that criteria for
waivers were satisfied where there was no indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
recipient of the erroneous payment; (6) the authority to waive erroneous
payment of executive branch employees has been delegated to the agency
that made the erroneous payment; and (7) Mr. Starr does not intend to
request a waiver and has determined to repay the portion of the cost
identified as an erroneous reimbursement.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-98-55R
     TITLE:  Independent Counsel: Travel by Kenneth W. Starr
      DATE:  01/09/98
   SUBJECT:  Per diem allowances
             Accounting procedures
             Lawyers
             Temporary lodging allowances
             Reporting requirements
             Financial records
             Indebtedness waivers
             Travel costs
             Erroneous payments

             
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Cover
================================================================ COVER



December 1997


GAO/AIMD-98-55R

Independent Counsel Travel

(911752)


Abbreviations
=============================================================== ABBREV

  FBI - x
  GAO - x

Letter
=============================================================== LETTER


B-278631

January 9, 1998

The Honorable Paul E.  Kanjorski
House of Representatives

Subject:  Independent Counsel:  Travel by Kenneth W.  Starr

Dear Mr.  Kanjorski: 

As requested by your office, this letter provides information on
travel reimbursements for independent counsel Kenneth W.  Starr for
the 6 months ended September 30, 1996.  Specifically, our objectives
were to provide detailed information for each reimbursement and to
determine whether each reimbursement complied with federal travel
regulations.\1

We earlier reported that the total travel expenditures\2 for Mr. 
Starr's office during the period were approximately $1.7 million.\3
Of that amount, approximately $1.3 million was for travel by Federal
Bureau of Investigation (FBI) employees assigned to the
investigation, and the remaining $400,000 was for Mr.  Starr's
employees and others, including official travel by Mr.  Starr
totaling $6,342. 

Mr.  Starr's office had agreements with the FBI to reimburse the FBI
for the travel costs of employees assigned to Mr.  Starr's
investigation.  Reimbursements to the FBI were made out of the
permanent, indefinite appropriation available for independent counsel
expenditures and, for the 6 months ended September 30, 1996, covered
travel processed by the FBI dating back to January 1995. 


--------------------
\1 The Federal Travel Regulation, 41 C.F.R.  Chapters 301-304. 

\2 The term expenditures as used in this letter means cash disbursed. 

\3 Financial Audit:  Independent Counsel Expenditures for the Six
Months Ended September 30, 1996 (GAO/AIMD-97-64, March 31, 1997). 


   TRAVEL REIMBURSEMENTS
------------------------------------------------------------ Letter :1

Mr.  Starr's travel reimbursements of $6,342 for the 6 months ended
September 30, 1996, covered all, or parts of, 21 trips Mr.  Starr
took between December 11, 1995, and July 2, 1996.\4 All of the 21
trips were to Little Rock, Arkansas, except for one trip to St. 
Paul, Minnesota, from December 11 to December 13, 1995. 



                                Table 1
                
                   Travel Reimbursements to Mr. Starr
                During the 6 Months Ended September 30,
                                  1996

Trip    Dates of travel                                  Reimbursement
------  ----------------------------------------------  --------------
1       December 11-13, 1995                                   $736.17
2       December 21-24, 1995                                   $395.00
3       January 1-2, 1996                                      $214.50
4       January 9-11, 1996                                     $187.00
5       January 17-20, 1996                                    $318.00
6       January 24-25, 1996                                    $360.57
7       February 5-6, 1996                                     $569.67
8       March 24-25, 1996                                      $246.00
9       March 29-30, 1996                                      $163.50
10      April 2-4, 1996                                        $287.50
11      April 9-10, 1996                                       $286.00
12      April 15-18, 1996                                      $421.00
13      April 22-24, 1996                                      $292.50
14      April 30-May 3, 1996                                   $384.00
15      May 6-9, 1996                                          $373.50
16      May 13-16, 1996                                        $391.50
17      May 22-24, 1996                                        $411.00
18      June 4-6, 1996                                         $122.00
19      June 16-17, 1996                                       $ 61.00
20      June 20-21, 1996                                       $ 61.00
21      June 30-July 2, 1996                                   $ 61.00
======================================================================
        Total                                                $6,342.41
----------------------------------------------------------------------
In conducting our work, we obtained all of Mr.  Starr's travel
vouchers for which a claim was paid during the 6-month period ended
September 30, 1996.  We reviewed these vouchers for mathematical
accuracy, supporting documentation, and appropriateness of charges
for lodging, meals and incidentals, transportation, and other related
costs in accordance with federal travel regulations.  We found that
reimbursements for meals and incidentals, transportation, or other
related costs during this period were proper. 

We determined, however, that Mr.  Starr was erroneously reimbursed
for some of his lodging costs.  The erroneous reimbursements appear
to have been caused by an administrative error in applying federal
travel regulations to independent counsels whose primary office is
away from their residences and who lease an apartment.  Those
regulations generally allow reimbursement for a leased apartment only
to the extent that the total cost for the entire period of the lease
does not exceed what would have been allowed had the employee
obtained conventional lodging (e.g., a hotel) on a daily basis for
the days during the period of the lease when the traveler was on
official business.\5

Mr.  Starr was appointed independent counsel in August 1994, and
began leasing an apartment in October 1994.  Mr.  Starr leased an
apartment in Little Rock that had been vacated by an attorney on a
previous independent counsel investigation.\6 During the period from
October 1994 through February 9, 1996, Little Rock was Mr.  Starr's
primary office location, and he was reimbursed for the monthly cost
of the lease and other related costs.\7 Our review of the 6-month
period ended September 30, 1996, determined that during that period
he was erroneously reimbursed for some of the lease costs he had
previously incurred.  Accordingly, we reviewed the period from
October 1994 through February 9, 1996, to determine if all of the
monthly lease costs reimbursed to Mr.  Starr for the entire period
were allowable. 

We determined that during this period, Mr.  Starr did not occupy the
apartment for the requisite number of nights in any month that would
have allowed all of his monthly lease costs to be fully reimbursed. 
As a result, Mr.  Starr was erroneously reimbursed $9,926, as shown
in table 2.  The reimbursements were approved and certified by career
administrative officers detailed to the independent counsel office
from another federal agency.  We found no indication of
misrepresentation or that Mr.  Starr or his staff were aware that
these reimbursements were not allowed under the federal travel
regulations. 



                                     Table 2
                     
                       Erroneous Reimbursements For October
                          1994 Through February 9, 1996

              Number of     Allowable       Allowable       Monthly    Erroneous
                 nights         daily         monthly       lodging  reimburseme
Month           lodging       lodging         lodging    reimbursed           nt
---------  ------------  ------------  --------------  ------------  -----------
October               7      $75.00\a         $525.00       $900.28      $375.28
 1994
November              3       75.00\a          225.00        804.46       579.46
December              6       75.00\a          450.00        743.38       293.38
January              10         52.00          520.00        804.46       284.46
 1995
February              7         52.00          364.00        937.26       573.26
March                 8         52.00          416.00        944.70       528.70
April                 8         52.00          416.00        941.49       525.49
May                   6         52.00          312.00        936.00       624.00
June                  6         52.00          312.00      1,109.83       797.83
July                  5         52.00          260.00      1,123.85       863.85
August                9         52.00          468.00      1,151.62       683.62
September             6         52.00          312.00      1,220.14       908.14
October               9         52.00          468.00        995.66       527.66
November              8         52.00          416.00        995.71       579.71
December              4         52.00          208.00        998.64       790.64
January               7         52.00          364.00      1,045.30       681.30
 1996
February              1         52.00           52.00      361.17\b       309.17
 1-9
================================================================================
Total               110                     $6,088.00    $16,013.95    $9,925.95
--------------------------------------------------------------------------------
\a The $75 represents the actual subsistence expenses authorized
during this period. 

\b Lodging was reimbursed on a pro rata basis for the first 9 days of
February 1996.  This lodging reimbursement was included in the
reimbursement for the February 5-6, 1996 trip, as shown in table 1. 

Executive branch employees may seek waivers for erroneous payments
under certain circumstances.  Prior to December 18, 1996, we had the
authority to waive erroneous payments to executive branch employees,
including independent counsels and their employees, if we determined
that collection would be against equity and good conscience and not
in the best interests of the United States.\8 We generally determined
that criteria for waivers were satisfied where there was no
indication of fraud, misrepresentation, fault, or lack of good faith
on the part of the recipient of the erroneous payment.  In
particular, we gave consideration to whether the recipient knew or
reasonably should have known of the error.  In our first report on
independent counsels,\9 we identified certain erroneous payments to
independent counsels that we believed were appropriate for waiver
consideration, and we later granted waivers for those payments. 

The General Accounting Office Act of 1996 transferred our authority
to waive erroneous payments of executive branch employees to the
Director of the Office of Management and Budget (OMB).\10 The
Director of OMB has in turn delegated the waiver function "to the
Executive Branch agency that made the erroneous payment."\11


--------------------
\4 Mr.  Starr, who reported his expenditures on a cash basis,
generally submitted separate travel vouchers at different times for
lodging and for transportation, meals and incidentals, and other
related costs for a specific trip.  As a result, reimbursement to Mr. 
Starr for a specific trip was sometimes spread over different
reporting periods.  For example, for Mr.  Starr's January 1-2, 1996,
trip, lodging reimbursement was made during the 6-month period ended
March 31, 1996, while the related transportation, meals and
incidentals, and other related costs were reimbursed during the
6-month period ended September 30, 1996. 

\5 41 C.F.R.   301-7.14(a)(2)

\6 Mr.  Starr initially entered into a 7-month lease, followed by a
1-year lease. 

\7 Other related costs include lease related expenses such as
utilities, housekeeping, and furniture rental.  According to Mr. 
Starr's staff, Mr.  Starr's furniture rental was on a rent-to-own
basis, and the furniture is now being used at no additional cost in
an apartment leased to the independent counsel office. 

\8 5 U.S.C.  5584 (1994) and regulations issued by our office (4
C.F.R.  parts 91-92). 

\9 Financial Audit:  Expenditures by Nine Independent Counsels
(GAO/AFMD-93-1, October 9, 1992). 

\10 Section 103(d) of Public Law 104-316, October 19, 1996. 

\11 Determination with Respect to Transfer of Functions Pursuant to
Public Law 104-316, Attachment A, Office of Management and Budget,
December 17, 1996. 


---------------------------------------------------------- Letter :1.1

We performed our audit from April 1997 through December 1997 in
accordance with generally accepted government auditing standards.  We
requested comments on a draft of this letter from Mr.  Starr.  The
Deputy Independent Counsel and Designated Agency Ethics Official
provided written comments, which are included in the enclosure to
this letter.  The Deputy Independent Counsel did not disagree with
the results of our work.  He stated that Mr.  Starr does not intend
to seek a waiver and has decided to repay the portion of the cost
identified as an erroneous reimbursement. 

We are sending a copy of this letter to other interested parties. 
Please contact me at (202) 512-9489 if you or your office have any
questions about this letter. 

Sincerely yours,

David L.  Clark
Director, Audit Oversight and Liaison

Enclosure




(See figure in printed edition.)Enclosure
COMMENTS FROM THE OFFICE OF THE
INDEPENDENT COUNSEL
============================================================== Letter 



(See figure in printed edition.)


*** End of document. ***