I just read the June 2003 Report by the Office of Inspector General of the US Department of Agriculture concerning use, or should I say “misuse” of the government travel card by Agriculture employees. Yep, I read the whole report. I was curious just how bad this situation could be. The various news summaries on the just-released report made it sound pretty bad but I wanted to see for myself. Having once been an audit response official, I know how those auditors can get pretty carried away and how beleagored agency types often have to suffer through these audit witchhunts.
In case you missed the stories, the IG found some pretty interesting stuff in a random audit of Agriculture travel card users: charges for bartending school, purchase of a car, lingerie, etc., check kiting, people keeping and using cards long after they left the agency, and so forth. The IG: “Twelve of the 25 individuals never traveled for official government purposes, yet their card usage amounted to almost $196,000 during the review period.” (These 25 individuals by the way were the ones among the sample of 300 who had the most cash advances from ATM machines during the six month review period.)
The Agriculture IG report is not pretty for the agency. It’s a disaster. In the dry, rote drone of a report in the language long ago perfected by government auditors, there is a story that should be inspiring outrage at the highest levels of government. Here’s why.
First and foremost, the travel card system at Agriculture is broken, has been for years, and apparently won’t be fixed any time soon, despite their assurances. You almost find yourself having pity on an IG who did a rather scathing report in 1997 which found that Agriculture’s travel card system was in serious trouble. The agency agreed then to fix the problems right away. Yeah, right.
Now, six years later either the system is still seriously broken, or they did fix it in 1997 and it unexpectedly broke again since then. I suspect the former and so does the Agriculture IG. The IG: “In our 1997 report, we recommended, and the Department agreed, to enhance its regulations, yet no corrective action was forthcoming,” which the IG dutifully and almost pitifully points out violates standards regarding audit followup. (Hey, a little helpful advice to the Agriculture IG: if an agency doesn’t worry too much about 300 cardholders misusing their cards to the tune of about $7.7 million in six months, I seriously doubt they are losing much sleep over there about violating audit followup standards!)
So what’s wrong at Agriculture? What needs to be fixed? Why are employees able to use their travel cards for years after they leave the agency? Why do they get away with using them for tattoos, lingerie, buying cars, getting cash advances when they are not even traveling? Why do they even have cards if they never travel—cards on which they are racking up thousands of dollars in charges? And why were some of the top abusers simply counseled or reprimanded? (one employee who did not even travel charged $24,000 total during the six months and received a reprimand; another who charged $11,000 and never traveled was “counseled.”)
The IG: “Despite this high level of interest regarding curbing misuse of the travel card, USDA continues to operate under a regulation nearly 19 years old that contains no internal control measures. The foremost control the Department has relied upon is its employees’ voluntary compliance with the cardholder agreement and ethics standards.”
Now there’s an internal control strategy that ought to make a few congressional hairs stand on end! If I have this straight, at Agriculture there is no need to worry about people turning their cards in before they are allowed to leave the agency, no need to question why someone is even being issued a travel card if they never travel (because after all they might travel some day so better to be prepared, isn’t it?), not worth giving a second thought to those huge charges at Skulls Unlimited, Oregon Liquor Store, San Diego Zoo, the Gap, Tattoo and More Ink, Golf Courses at Hyland Hills, Men in Motion, to name a few (I did not make these up; they are listed in the IG report!); no need to have supervisors monitor card usage, no need to do internal control spot checks…because employees know they are not supposed to misuse government property and, after all, they signed a cardholder agreement; and no need to set examples with strong disciplinary action.
If everyone in Washington would just be this trusting of each other, we could do away with those pesky congressional oversight hearings, snooping by OMB into how agencies are managing their resources, and so forth. It would be a much more efficient and utopian government society. Sure, we would lose a few billion here and a few billion there (was it the late Senator Dirksen who said something like after a while that adds up to a lot of money?), but wouldn’t it be a NICER town to work in.
Back to the real world. The IG did a random sample of 300 card users at Agriculture (out of 55,000 cardholders who used the card 804,000 times to charge a total of $78.5 million during the six month review period) and found in excess of $7.7 million in improper charges in a six-month period. That’s right: 10 percent of the total charges during the six months. One in ten dollars spent was for an improper purpose. That strikes me as high. Now, I know the statisticians will eat me alive for this, but if I multiply $7.7 million by 183 (I get this number by taking the 55,000 total card users and divide them into groupings of 300—the size of the IG sample) the potential loss could exceed $1.4 billion over six months agency wide.
If you did not think $7.7 million was a lot of money (I personally do think it’s a lot, but I worked at NASA where the agency’s entire budget for a year was about equal to what HHS literally lost in the same time period, so I’m more easily impressed by $7.7 million dollars), then maybe you are impressed by $1.4 billion in SIX MONTHS. If not, think about what the losses could be in a year at Agriculture (yes, multiply by two and get $2.8 billion) Now, that’s a staggering number and something worthy of a little political huffing and puffing around the Nation’s Capitol.
So, Agriculture has this little problem, once again they have given the IG the idiot treatment and assured that they would fix the problem immediately, give or take a few years, and actually had the audacity to reject several of the audit recommendations.
OK, Mr. President, you said you want to run the federal government like a business. So, here’s a test of that philosophy. What would a corporation do if it found out in one of its divisions employees had engaged in this level of abuse of travel cards, that the division had no internal controls, that hands were slapped when the auditors blew the whistle? I suspect that the offending employees would be history, as would the managers that let the abuse happen. Can we have just a bit of outrage over the situation at Agriculture?