The Bank of Japan has overpaid on domestic air travel expenses claimed by many of the 2,150 employees at its head and branch offices since fiscal 1999, officials admitted Thursday after the Board of Audit reportedly ordered it to correct the practice.

The overpayment occurred when BOJ employees used advance allowances for full-price air fares to buy discount fares instead and pocket the difference, the officials said, adding that this runs counter to the central bank’s bylaws, which stipulate that only actual travel expenses are reimbursed when BOJ officials travel on business by air.

The BOJ “takes seriously the fact that inappropriate payments have been made, and would like to deeply apologize for causing a public stir,” Tomohisa Takeda, adviser to the governor for management strategy, budget and accounting, told reporters at BOJ headquarters in Tokyo.

The pocketing of expense account money came to light in January when the Board of Audit found that BOJ employees at the Fukuoka and Kitakyushu branches received surplus travel expenses when they made business trips in recent months.

At the instruction of the board, the central bank is looking into the travel expense account practices at all other branches and among the 2,150 employees, including 340 retired officials, who have taken 9,990 business trips since fiscal 1999.

About half of the central bank employees who traveled by air on business between November and January purchased discount tickets and pocketed the difference, which ranged from a few hundred yen to 50,000 yen.

The BOJ said it plans to submit to auditors the results of its investigation in June. It is still trying to determine how much it has paid in excess travel allowances and the number of employees involved.

The central bank has spent an annual average of 70 million yen on air travel over the past seven fiscal years.

The BOJ has attributed the problem to its failure to make clear to employees that only actual travel expenses are to be reimbursed. It also said it failed to collect proof of such expenses, including air ticket stubs and receipts.

The central bank neglected to revise its long-standing reimbursement system despite widespread use of discount tickets since around 1999, when airline deregulation made discount tickets widely available.

After submitting the results of its internal probe to the Board of Audit in June and receiving the results of the board’s probe, the BOJ will introduce corrective measures while pressing employees who received inflated payments to return the money, the bank said.

As for possible penalties against senior BOJ officials, Yoshiki Tanji, deputy director general of the personnel and corporate affairs department, said the central bank “will make an appropriate decision after making clear what really happened.”

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