Government Purchase Cards: Control Weaknesses Expose Agencies to Fraud and Abuse Page: 4 of 14
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monitoring. These weaknesses created a lax control environment that
allowed cardholders to make fraudulent, improper, abusive, and
questionable purchases. Weak controls also resulted or contributed to lost,
missing, or misused government property. I will now describe some of the
problems we found and then provide specific examples of improper
payments we and various IGs identified. I will also lay out some of the key
recommendations we and the IGs have made to address these problems.
Inadequate Review and According to our Standards for Internal Control in the Federal
Approval Processes Government, transactions and other significant events should be
authorized and executed only by persons acting within the scope of their
authority. Although review of transactions by persons in authority is the
principal means of assuring that transactions are valid, we found that the
review and approval process for purchase card purchases was inadequate
in all the agencies reviewed.
At the Department of Education, we found that 10 of its 14 offices did not
require cardholders to obtain authorization prior to making some or all
purchases, although Education's policy required that all requests to
purchase items over $1,000 be made in writing to the applicable
department executive officer. We also found that approving officials did
not use monitoring reports that were available from Bank of Americas to
identify unusual or unauthorized purchases.
Additionally, Education's 1990 purchase card policy, which was in effect
during the time of our review (May 1998 through September 2000), stated
that an approving official was to ensure that all purchase card transactions
were for authorized Education purchases and in accordance with
departmental and other federal regulations. The approving official
signified that a cardholder's purchases were appropriate by reviewing and
signing monthly statements. To test the effectiveness of Education's
approving officials' review, we analyzed 5 months of cardholder statements
and found that 37 percent of the 903 monthly cardholder statements we
reviewed were not approved by the appropriate official. The unapproved
statements totaled about $1.8 million. Further, we found that Education
employees purchased computers using their purchase cards, which was a
violation of Education's policy prohibiting the use of purchase cards for
5Bank of America services the purchase card program at Education.
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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/m1/4/: accessed February 16, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.