GOVERNMENT CREDIT CARDS ABUSED

GOVERNMENT CREDIT CARDS ABUSED Millions of dollars of unauthorised spending by federal employees included Internet gambling action The US Government Accountability Office's latest report discloses some startling cases of government credit card abuse by federal employees, reports Associated Press.  Federal employees charged millions of dollars for Internet gambling and dating, tailor-made suits, lingerie, lavish dinners and other questionable expenses to their government credit cards over a 15-month period, congressional auditors say.  The report examined spending controls across the federal government following reports of credit-card abuse at departments including Defence, Homeland Security and Veterans Affairs. The review of card spending at more than a dozen departments found that nearly 41 percent of roughly $14 billion in credit-card purchases, whether legitimate or questionable, did not follow procedure — either because they were not properly authorised or had not been signed for by an independent third party as called for in federal rules to deter fraud. For purchases over $2 500, nearly half — or 48 percent — were unauthorised or improperly received. Out of a sample of purchases totaling $2.7 million, the government could not account for hundreds of laptop computers, iPods and digital cameras worth more than $1.8 million. In one case, the U.S. Army could not say what happened to computer items making up 16 server configurations, each of which cost nearly $100 000. Agencies often could not provide the required paperwork to justify questionable purchases. Investigators also found that federal employees sometimes double-billed or improperly expensed lavish meals for many months without question from supervisors; the charges were often noticed only after auditors or whistle-blowers raised questions. "Breakdowns in internal controls over the use of purchase cards leave the government highly vulnerable to fraud, waste and abuse," investigators wrote, calling the governmentwide failure rate in enforcing controls "unacceptably high." "This audit demonstrates that continued vigilance over purchase card use is necessary," the 57-page report stated. The report calls for the General Services Administration and Office of Management and Budget, both of which help administer the government's credit-card program, to set guidance to improve accounting for purchased items, particularly Palm Pilots, iPods and other electronic equipment that could be easily stolen. OMB and GSA were also urged to tighten controls over convenience checks, which are a part of the credit-card program, and to remind federal employees that they will be held responsible for any items if the purchases are later deemed improper. In response, both OMB and GSA agreed with portions of the report. But GSA administrator Lurita Doan noted the vast majority of federal employees use their cards properly and that many oversight measures already are in place. She acknowledged there is room for improvement but added that by using purchase cards the federal government saves about $1.8 billion in administrative costs each year. "We agree that no level of abuse or misuse is acceptable," Doan wrote. The GAO study comes amid increasing scrutiny of purchase cards, which are used by 300 000 federal employees and are directly payable by the U.S. government. Among the expenditures cited in the report: * At the U.S. Postal Service, workers spent over $35 000 on Internet gambling and casino sportsbooks, and separately billed more than $14 000 to government credit cards for other Internet services and a dinner at a Ruth's Chris Steakhouse in Orlando, Fla., for 81 people at a cost of $160 each for steaks and crab. * An Agriculture Department employee fraudulently wrote 180 convenience checks for more than $642 000 to a live-in boyfriend over a six-year period. The money was used for gambling, car and mortgage payments, dinners and retail purchases.  * At the Pentagon, four employees purchased $77 700 in clothing and accessories at high-end clothing and sporting goods stores. The spending included more than $45 000 at Brooks Brothers and similar stores for tailor-made suits. The credit-card holders said the items were for service members working at U.S. embassies with civilian attire. Pentagon rules allow purchases of civilian clothing when performing official duty, but generally only up to $860 per person.  * Justice Department and FBI employees charged $11 000 at a Ritz Carlton hotel for coffee and "light" refreshments for 50 to 70 attendees for four days, averaging about $50 per person. Seventy percent of the total conference cost of $15 000 was for the food and beverages, while audiovisual and other support services totaled only about $4 000, or 30 percent of the charges.  * At the State Department, one credit-card holder bought $360 worth of women's lingerie at Seduccion Boutique for use during jungle training by trainees of a drug enforcement program in Ecuador.  "Too many government employees have viewed purchase cards as their personal line of credit," said Sen. Norm Coleman, the top Republican on the Senate Homeland Security subcommittee on investigations, which requested the GAO report. "When money that was intended to pay for critical infrastructure, education and homeland security is instead being spent on iPods, lingerie and socializing, we must immediately remedy the problem."