Government Credit Cards “Ripe for Waste, Fraud and Abuse”
EmailA federal investigation reveals that government-issued credit cards were improperly used to purchase everything from an $8,000 plasma TV to a beer brewing kit. The findings are contained in a new report by the Government Accountability Office, which discovered widespread abuse of government purchase cards by Department of Homeland Security employees.
Among the abuses documented by the GAO were 100 laptops that were purchased for $300,000 and are now presumed missing or stolen; tens of thousands of dollars spent for training at luxury golf and tennis resorts; and 2,000 sets of "canine booties" bought at a cost exceeding $68,000 that were unused. In addition, $7,000 was used to buy 12 Apple iPod Nanos and 42 iPod Shuffles, which the GAO report says is "questionable because iPods are generally used to store and play music — not a legitimate government need."
The GAO estimated that a full 45 percent of DHS’s purchase card transactions were not properly authorized and that ineffective controls led to "potentially fraudulent, improper, and abusive or questionable transactions to occur." According to the report, many of the abuses occurred in the wake of Hurricane Katrina and that "the government is particularly vulnerable when purchase cards are used during times of disaster."
Senator Chuck Grassley (R-IA) says a post-Katrina provision that raised the limit for emergency "micro-purchases" on government credit cards from $15,000 to $250,000 was "ripe for waste, fraud and abuse." Grassley has authored legislation that would establish tighter controls for government charge card programs. According to Grassley, "The American people should be outraged that our federal agencies are letting employees walk away with the kitchen sink, literally. I don’t think we need any more reports to tell us what we already know: the government credit card system is broken and it needs to be fixed."
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Fix it-like the 300 million dollars in trailors that sit in Hope, Arkansas. Fix what this Governemnt cant fix anything. Tell me if you have a rule in the first place that you cant put trailors in a flood plain then why did they buy them. hmmmm Maybe they just helped another good old boy at the taxpayers expense. Trailor anyone?
Posted by: Eric Urruela | September 29, 2006, 4:14 pm 4:14 pm
How irresponsible for this reporter to make such a blanket statement that ALL government credit cards are being abused. I’ve had first hand exposure to government credit cards for a good ten years and from what I know, the restrictions and auditing are tight.
btw, was the 2,000 sets of canine booties, was that for MWD’s that have trouble with the heat in Iraq? Then it’s perfectly reasonable that they would have purchased them. Unused? There’s got to be a story behind that.
Katrina abuses? I’m not surprised. But don’t say it’s all like how you report. That just makes you look stupid.
Posted by: Dan | September 29, 2006, 5:59 pm 5:59 pm
There certainly is reason to be concerned, but I agree with Dan above. My experience has been that controls are very tight, almost to the point of being excessive. iPods? I recently saw a proposed concept to purchase some iPods(or similar device) for the purpose of installing decision support software to make first responders more effective. The use of a commercial format and form factor makes perfect sense for training. So…if we do our pick and shovel work and find that these purchases were appropriate, let’s see at least as much ink on the follow on stories.
Posted by: Mike | September 30, 2006, 8:13 am 8:13 am
Shame on the government for not using the control tools the banks furnish for this very purpose. Each vendor that accepts the card has to submit a vendor type code, type of merchandise code etc. You can even block certain types of purchases by utilizing the codes provided by the banks soft ware. There is quite a tool box of codes that can be placed on cards. Just takes a government credit card administrator to get on line and administer those codes. Like I said…Shame on the government for not exercising those controls.
Posted by: Ramsey | September 30, 2006, 12:18 pm 12:18 pm
This is bull, media and political hyperbole. Gov’t cards are audited again and again. Usually they are mistakes by employees who innocently pull out the wrong card and then they promptly pay off the balance when it is realized. In the rare case of real fraud, I’m sure the fraud rate is far far higher in private industry.
Posted by: Frank | October 1, 2006, 6:01 pm 6:01 pm
Typical. My govt. credit card is VERY closely monitored. But I don’t work for Defense or DHS, and it seems that they always get the free passes because they are Republican darlings. Remember when Defense ccards paid for lap dances last year!!!! hmpf.
Posted by: Uh huh | October 1, 2006, 8:12 pm 8:12 pm
Uh huh??? First of all the coding for purchases is determined by the vendor. Not the product. iPods are even available from GSA. We (Defense) use them (mp3 players) for pre recorded briefings and such. Take them on the plane or to hotel. Also, we use them for our newer troops to add study material. They check them out when the course starts and back when the course is over. As far as I am concerned, an iPod would be just as important in a war zone as a Camelback water system. It is very important for the troops to shut out their surroundings and get them some alone time in a tent with four other troops. Just return it for the next guy. There are no “free passes” in either Department. They both have very detailed rules and policies to be followed. However, the DHS probably has a lighter leash attached due to the troubles of having so many cards changed in the event of an emergency. As for the lap dances on credit cards… They weren’t gov’t “purchase cards”. They were “travel cards”. The cards are there for troops to pay for meals, hotels, plane tickets and CASH advances on THIER per diem. Do you really care what ATM a guy uses? Even if it is in a strip club and he isn’t doing anything illegal, it is HIS per diem to spend how he sees fit. If he decides to over spend, that amount is deducted from his check.
Posted by: Jason | October 2, 2006, 9:15 am 9:15 am
My credit card is closely monitered. but i can honestly say i know of a few fraudulent purchases by people in my department. or purchases that weren’t necessary and have gone unused. I don’t think i even realized that the amount of money that was being lost because of the cards was so high. Tank god someone is finally lookin into it though.
Posted by: yea yea | October 3, 2006, 10:34 pm 10:34 pm
This is ridiculous! We should be outraged. I worked as a city employee for 15 years & at one point had over 100 credit cards in my department alone that I had to keep track of each month. Every penny had to be accounted for. Every expense was seen by at least 3 different people on various levels of accountability. This isn’t an oversight, it’s CORRUPTION. Vote for LESS government!
Posted by: Nancy | April 9, 2008, 6:53 pm 6:53 pm