Government Credit Cards “Ripe for Waste, Fraud and Abuse”

By Joseph Rhee

Sep 29, 2006 2:20pm

A 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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