When most U.S. officials travel abroad on government business, they stay in hotels that most U.S. taxpayers couldn't afford on a dream vacation. Yet taxpayers foot the bill so their public servants can travel in style.

In Tokyo, for example, the hotel of choice for traveling pencil-pushers is the Okura, recently ranked the fourth best hotel in the world. The Okura, with its seven restaurants, fitness center, shopping mall and secretaries for hire, is not just the place for members of Congress, diplomats and White House staff members to lay their heads. The U.S. Embassy in Japan routinely books planeloads of low-level bureaucrats into the Okura.

Until auditors caught on, taxpayers were paying $160 a night for lodging for every U.S. government traveler in Tokyo, plus another $64 a day for meals and $23 a day for walking around money. Call it "Japan on $247 a day: Roughing it, U.S. style."

We don't expect our public servants to double bunk at the Motel 6, but we expect them to follow the federal standard and stay in "adequate, suitable and moderately priced" hotels. If that is the standard, why do they get away with lounging in luxury?

That's exactly what auditors from the State Department inspector general's office wanted to know. They surveyed travel records from around the world and found that daily travel allowances were too often based on the ritziest hotels and restaurants. Smart travelers take the per diem based on the high-priced hotels. Then they stay in cheaper accommodations and pocket the difference. And it's all perfectly legal. The State Department requires few receipts for foreign travel.

U.S. embassy officials around the world take informal surveys of the hotel and restaurant prices in their cities and submit those to the State Department allowance staff. If they tell Washington that the Okura Hotel is the standard in Tokyo, then the Okura becomes the basis for setting per diem.

In London, the embassy staff said the elegant Grosvenor House, overlooking Hyde Park, was the hotel visitors used the most at about $180 a night. But when auditors checked the embassy's visitor log, they found that less than 3 percent of the guests stayed at the Grosvenor. Instead, most were at the Mandeville Hotel, which costs less than half as much.

In Paris, lodging rates were based in part on a claim that most visitors stayed at the Intercontinental for at least $135 a night. Most were bunking at the Pullman for almost half the price.

That's how the U.S. government squanders millions of dollars on travel every year. The federal budget for overseas travel is more than $300 million, not including air fare. According to the report obtained by our associate Jim Lynch, auditors looked at per diem rates in 48 cities accounting for about 60,000 official visits each year.

Auditors concluded that per diem rates were inflated by 13.5 percent and that the government could save $41.6 million a year if it stopped treating public servants like royalty. They cut per diem in 24 cities, including Paris, London and Tokyo.

The audit blames embassy staffs and the allowance office in Washington. But an allowance staff member told us embassy officials deliberately distort hotel and restaurant prices to boost per diems, which are part of the basis for their own living allowances.