ANN ARBOR, Mich.-As credit unions cut and cut expenses in an economy that demands frugality, NCUA is spending more than 10% of its annual budget on travel.
Records released by the agency show it has incurred expenses for staff to travel to Japan, China, Italy, Ireland, Portugal, Kenya, Norway Jamaica, and the Mexican resort cities of Acapulco, Cancun, San Jose Del Cabo, as well as a German ski area called Garmisch-Partenkirchen and the Bolongo Beach Resort in St. Thomas.
The travel data was released in response to Freedom of Information Act (FOIA) requests made by JunketSleuth.com, which requested records related to NCUA travel expenditures between 2003 and 2010. The data show that NCUA travel spending more than doubled over that time span, rising from $10 million a year to $22 million a year, a 120% increase.
It should be noted that some of the biggest expenditures are for Puerto Rico and Guam, which are commonwealths of the U.S. and as such NCUA regulates credit unions on both islands.
Christopher Carey, JunketSleuth editor, pointed out that the number of employees at NCUA rose just 14 percent, from 926 to 1,054 between 2003 and 2010, and the agency's travel spending went from 6.8% of its overall budget to 11%. NCUA now spends an annual average of nearly $21,000 per employee on travel.
"That is one of the highest figures that JunketSleuth has seen among the federal agencies that have provided us with data," said Carey, explaining that JunketSleuth has sent FOIA requests to all government agencies asking for their travel expenditure information. Twenty agencies have provided JunketSleuth with sufficient data to review their travel spending.
"The thing that jumped out at us with NCUA is the disconnect with their travel spending and how credit unions position themselves as the opposite of big banks-frugal and conservative," remarked Carey. "Then you have NCUA spending money on travel as if there were no budget pressures at all."
Difficulty Getting Records
JunketSleuth reported it had difficulty obtaining detailed travel records from NCUA, especially information related to the purpose of the travel and, in particular, travel to Europe. The non-profit, non-partisan investigative reporting website found that JoAnn Johnson, NCUA's chairman from 2004 to 2008, took at least 14 foreign trips. Records show that in 2003, she visited Oslo and Bergen, Norway. In 2004, she went to Zurich, Switzerland; to Krakow, Poland; to Nassau, The Bahamas; and to Vancouver, B.C. In 2005, her travels took her to Rome, Italy, and to Budapest, Hungary. In 2006, her destinations included Dublin, Ireland; Munich, Germany; and Toronto, Canada. In 2007, she went to Rome and Florence, Italy; and to Acapulco. In 2008, Johnson traveled to Edinburgh, Scotland, and Calgary, Alberta.
Some of that travel was related to credit union conferences, including World Council of CUs' events. A number of U.S. credit unions, especially those serving a military FOM, also have branches located in foreign countries.
NCUA records show Johnson spent more than $160,855 on travel, $25,064 of it on foreign travel. Carey told Credit Union Journal that NCUA only provided JunketSleuth detailed records for specific trips, stating the agency only kept records for trips singled out for audit.
JunketSleuth Journalist Russell Carollo said NCUA did not provide itemized justification for the overseas travel. "For whatever reason the purpose was withheld. They did not provide us with any reason for the foreign trips. Most federal agencies [that provided a response to JunketSleuth's FOIA requests] did provide us with reasons for travel."
Carey said JunketSleuth will continue to push NCUA to provide a rationale for the overseas travel. "And based on the dollar amount reported for those [Johnson] trips, things do not add up. Some of those dollar amounts reported are below what it would cost to visit those destinations."
For example, Carey said a 2005 trip to Italy by Johnson for the World Council of Credit Unions' annual meeting was listed as costing only $661, the cost of the airline ticket, while a 2006 trip to Ireland that lasted more than a week cost less than $1,000 according to the data NCUA released.
While Carey reiterated the spending by NCUA was one of the highest among the federal agencies responding to JunketSleuth FOIA requests, he agreed that NCUA has a great demand for U.S. travel in the current economy, and that comparing travel data between government agencies can be difficult given the different missions of each agency.
Rationale For Travel
Evan Clark, CEO of the $260-million Department of Commerce FCU in Washington, D.C., reminded that NCUA examiners rack up a great deal of travel expenses. "Let's say you're an examiner in Montana or Wyoming. I know both states very well. I was born and raised in Montana. These are big places and the concentration of credit unions is entirely different than, say, here in Washington. If an examiner put in an average of 100 miles of travel per day to get to credit unions and then claimed 50 cents a mile, the government rate of reimbursement, you'd come up with a number around $12,000 just for the mileage to do their job."
David Small, NCUA spokesman and assistant director of public affairs, confirmed that most of the agency's travel involves employees traveling to credit unions to conduct examinations. Records show that NCUA travel spending increased about 20% from 2009 to 2010. Small pointed out that in 2009 NCUA increased the number of examinations it conducted by about a third, switching from 18-month cycles to 12-month cycles. The agency also implemented other changes aimed at preventing financial crises at credit unions.
Regarding the foreign travel, Small said international travel is also part of NCUA's mission. "NCUA officials, and in particular the chairman, often travel overseas on official business to speak at events or represent NCUA to the international community. Many of these conferences are sponsored by credit union leagues and organizations."
Small added that the credit union movement started in Germany, and there have been many things the various countries "share with each other to improve safety and soundness, as well as improve the regulatory environment back home."
Travel expenses for former chairman Michael Fryzel ($41,528) and current Chairman Debbie Matz ($61,781) appear to be in line, according to Carollo. "Johnson's successors appear to not have traveled as much, at least based on records we have received. And for both, we have seen airline tickets and other travel spending that is nothing out of the ordinary."
Matz was on hand in Glasgow, Scotland, in late July for the World Council of CU's World CU Conference.
Uncooperative, But...
While Carey termed NCUA's response to JunketSleuth's numerous and repeated FOIA requests "uncooperative," Carollo said that by federal agency standards, NCUA lands in the top third as far as the quality of their response. "The fact that they gave us anything we can use places them in the top half."
Carollo noted that the FDIC has been the least cooperative of all federal agencies in responding. "They basically have sent us nothing." JunketSleuth began sending federal agencies FOIA requests two years ago.
The heart of the problem with government travel spending, assessed Carollo, is that each agency "sees no direct benefit to cutting anything. Each agency will get the same budget, so cutting travel does not necessarily give then more money somewhere else. This is a pattern we are finding with a lot of federal agencies. There is this big [federal] budget debate and people are traveling like there is no tomorrow."
Gregg Stockdale, CEO of the $36-million 1st Valley CU in SanBernardino, Calif., lamented the situation. "Shame on NCUA, or shame on credit unions for going to these kinds of places on their members' dime. Or, shame on both. I'm glad to see NCUA is supporting the World Council of CU's, but is that necessary? And, with NCUA's track record here, they really shouldn't be going out of the country."
