Waste, Fraud, Abuse and Government Charge Cards

By on April 17, 2008 in Current Events with 2 Comments

It would be hard to find a paper of any size in the past week that has not had an article about the abuse of federal charge cards by federal employees. Quotes such as this one have popped up all over the country: "We’re poking fun at fiscally abusive bureaucrats, but there’s really nothing funny about the cavalier manner in which so many public servants misuse public funds for their own amusement. Billions in taxes – the ones we all sweat bullets trying to pay our fair share of each April – too often seem to be getting funneled toward improving the lives of a small army of federal workers….If U.S. citizens are going to continue to be dressed down before boarding planes that aren’t properly inspected, federal workers should be forced to follow tougher rules for spending our tax dollars."

There is no doubt that the GAO report has resonated with Americans who do not like to think of large sums of money being spent by federal employees on internet dating services, seductive lingerie and generally using federal tax money for their personal benefit. Intentionally or otherwise, the GAO report came out just as millions of Americans were calculating their tax obligation to the federal government to meet the April 15th tax filing deadline.

Moreover, the response from the General Services Administration (See Charge Card Abuse? Who Cares?) did not seem particularly helpful and seemed to take the approach that  agencies had a problem and that they should scrutinize credit card usage more closely but that, overall, told GAO to keep the problem in perspective because the government is raking in a few hundred million each year in extra fees.

Perhaps as a result of all the publicity and outrage on editorial pages in the nation’s newspapers, the Office of Management and Budget has issued new guidance to agencies as well to try and address the problem. In a memo to agency heads, it directs agencies to:

  • Extend the internal controls over purchase card activities to convenience checks and further remind cardholders that the use of convenience checks issued on the purchase card should be minimized;
  • Require cardholders to obtain prior approval or subsequent review of purchase card activity for purchase transactions that are under the micropurchase threshold;
  • Develop and implement specific guidance for ensuring that appropriate disciplinary actions (including dismissal) are properly considered and imposed for fraud and other egregious abuse of a purchase card;
  • Develop and implement specific guidance for documenting independent receipt and acceptance of items obtained with a purchase card, including: (1) purchases of a de minimis amount that do not require documentation of independent receipt and acceptance and (2) responsibilities of the approving official or supervisor to ensure items purchased were actually received; and
  • Develop and implement specific guidance for inventorying items obtained with a purchase card that are considered to be sensitive and pilferable property (e.g., handheld devices, small electronics) and are easily converted to personal use.

Whether this will make any long term difference remains to be seen.

I have no doubt that the vast majority of those of us in the federal community would prefer to have a year go by without a continuing stream of GAO or IG reports showing how federal employees use purchase and travel cards to improve their personal financial situation through the use of kiting schemes, $60,000 for an aquarium, buying beer (allegedly for a patient in a VA facility), and numerous other examples that routinely pop up in IG and GAO reports and then on to the front page of newspapers around the country. All of us should share in the outrage.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.

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