State Dept.’s Travel Funds Short Millions

The State Department kept millions of dollars worth of travelers checks in unlocked cabinets and piled on floors in an operation so lax that more than $59,000 was embezzled and $307,780 cannot be accounted for, the department’s inspector general testified today. A congressman accused the department of “rotten ineptitude.”

Government investigators told a House Government Operations subcommittee that controls on State Department travel advances were so disorganized that $15 million in such payments are delinquent, a total that includes a $695 advance to fired White House aide Lt. Col. Oliver L. North, which is four years overdue.

Situation Grows Worse

Frank Conahan, an assistant U.S. comptroller general, said a General Accounting Office investigation showed the delinquent travel advance situation is worse than it was two years ago, when the department promised to correct it.

The number of overdue or delinquent accounts rose from 8,100 in 1985 to 19,800 in 1987, with 300 accounts in excess of $10,000 and two totaling $34,000 each.

Conahan said the total value of delinquent accounts rose from $10 million in 1985 to about $15.4 million last year.

Some of the advance payments have been written off as uncollectible and some were made to accounts bearing obviously fictitious names, including that of “Ludwig Von Beethoven,” Conahan said.

$59,000 in Nine Days

In his testimony, Inspector General Sherman N. Funk said his office also had uncovered a proliferation of cash disbursing funds that may not be justified, funds authorized in amounts more than what is needed and the use of cash funds for questionable transactions.

He said the audit was triggered as a result of an employee embezzling and cashing $59,000 in travelers checks during the nine days she worked in the cashier’s operations.

Another witness, Ronald I. Spiers, undersecretary of state for management, said that the problem may stem from the fact that the cashiers entrusted with millions of dollars in cash and travelers checks are hired at one of the lowest levels in the federal pay scale and earn “less than they could make in a gasoline station.”

Spiers said that policy is being reconsidered.

“In testimony before the subcommittee in October, 1985, the State Department admitted that its travel operations were a mess and promised prompt corrective behavior,” said Rep. Jack Brooks (D-Tex.), the subcommittee chairman.

“Today we see the same rotten ineptitude,” he added.