Government Purchase Cards: Control Weaknesses Expose Agencies to Fraud and Abuse Page: 2 of 14
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Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to provide an overview of our reviews of the
government purchase card programs at two federal agencies and how the
control weaknesses we have identified made these agencies vulnerable to
improper or questionable purchases. At the outset, I want to make clear
our support in concept for the purchase card program. The use of
purchase cards has dramatically increased in past years as agencies have
sought to eliminate the bureaucracy and paperwork long associated with
making small purchases. The benefits of using purchase cards are lower
costs and less red tape for both the government and the vendor community.
At the same time, given the nature, scale, and increasing use of purchase
cards, it is important that agencies have adequate internal controls in place
to help ensure proper use of purchase cards and thus to protect the
government from waste, fraud, and abuse. Our audits to date have
identified serious internal control weaknesses. In the past year, we have
found improper and fraudulent use of purchase cards at two Navy units
reviewed and at the Department of Education.1 In addition, a number of
Inspectors General (IG) have identified and reported on control
weaknesses in the purchase card programs at their agencies, including the
Departments of Agriculture, the Interior, and Transportation.2
Government purchase cards, a type of credit card, are available to agencies
as part of the Governmentwide Commercial Purchase Card Program,
which was established to streamline federal agency acquisition processes
1U.S. General Accounting Office, Purchase Cards: Control Weaknesses Leave Two Navy
Units Vulnerable to Fraud and Abuse, GAO-01-995T (Washington, D.C.: July 30, 2001);
Purchase Cards: Control Weaknesses Leave Two Navy Units Vulnerable to Fraud and
Abuse, GAO-02-32 (Washington, D.C.: November 30, 2001); Purchase Cards: Continued
Control Weaknesses Leave Two Navy Units Vulnerable to Fraud and Abuse, GAO-02-506T
(Washington, D.C.: March 13, 2002); Education Financial Management: Weak Internal
Controls Led to Instances of Fraud and Other Improper Payments, GAO-02-406
(Washington, D.C.: March 28, 2002); and Education Financial Management: Weak
Internal Controls Led to Instances of Fraud and Other Improper Payments, GAO-02-513T
(Washington, D.C.: April 10, 2002).
2U.S. Department of Agriculture, Office of Inspector General, Financial and IT Operations
Audit Report: Some Changes Would Further Enhance Purchase Card Management
System Internal Controls, 50099-26-FM (Washington, D.C.: August 2001); U.S. Department
of the Interior, Office of Inspector General, Department of the Interior, Integrated Charge
Card Program, 2002-1-0011 (Washington, D.C.: December 2001); and U.S. Department of
Transportation, Office of Inspector General, Use of Government Credit Cards, Department
of Transportation, FI-2001-095 (Washington, D.C.: September 24, 2001).
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United States. General Accounting Office. Government Purchase Cards: Control Weaknesses Expose Agencies to Fraud and Abuse, text, May 1, 2002; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc289449/m1/2/: accessed February 23, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.