DHS failed to prevent abuse of purchase cards
A new DHS Inspector General report found that more than 90 percent of DHS’ purchase card transactions did not comply with guidelines established by the Office of Management and Budget; investigators found two Federal Aviation Administration employees had used the cards to purchase more than $150,000 worth of personal goods and services
A new DHS Inspector General report found that more than 90 percent of DHS’ purchase card transactions did not comply with guidelines established by the Office of Management and Budget (OMB).
Purchase cards are similar to credit cards and are often used for routine transactions of up to $3,000. The cards are designed to streamline the procurement process by reducing paperwork, but according to the inspector general’s report the expedited process has resulted in abuse.
For instance investigators found two Federal Aviation Administration employees had used the cards to purchase more than $150,000 worth of personal goods and services.
Due to a lack of proper oversight and clear guidelines, the report concluded that “the department cannot be sure that purchase cards are always used for their intended purposes.”
In its audit, officials found clear indicators that the purchase cards were being abused including transactions made on weekends and holidays. Out of 201 transactions marked as high-risk made between July 2009 and May 2010, 93 percent violated at least one of OMB’s guidelines and 69 percent of the transactions did not have an independent third party sign for the goods or services at delivery, an OMB requirement.
In 2008, the budget office issued new requirements for purchase cards after a Government Accountability Office report found that 41 percent of the $14 billion in transactions were not properly authorized or signed for by an independent third party.
The inspector general found that some of the improper purchase card transactions stemmed from incomplete and vague information in DHS’ purchase card manual which lacked clear and consistent guidelines concerning their use.
In particular, the DHS guide was unclear on who must needed to sign off on purchases. Most DHS employees obtained written approval before making purchases, but 36 percent of purchases examined by the inspector general lacked the proper official’s permission.
To ensure proper use of the cards, the inspector general recommended that DHS update is purchase card manual to include all of OMB requirements, review supporting documents of transactions to verify that they are valid, and develop new techniques to pinpoint high-risk transactions
Peggy Sherry, DHS’ deputy chief financial officer, agreed with the recommendations and said the agency was working to implement them and create stronger oversight to prevent fraud, waste and abuse.
