WASHINGTON (Reuters) - Cosmetic surgery, a mounted deer head, designer briefcases and pricey wine are among goods improperly charged to U.S. government credit cards by employees, according to a report released on Wednesday.
The General Accounting Office, the investigative arm of Congress, said in a report that hundreds of millions of dollars could be saved each year if there were stricter controls on the use of government-issued credit cards.
The government-wide purchase card program began in 1989 with the aim of streamlining federal buying and cutting down on processing costs. Card use was initially restricted to procurement personnel but later expanded.
From 1994 to 2003, the GAO said the use of government purchase cards increased from $1 billion to $16 billion. In most instances bills are paid directly by the government.
GAO audits of the charge cards found ineffective management, oversight and weak internal controls at the departments of Agriculture, Army, Navy, Air Force, Interior, Justice, Transportation and Veterans Affairs.
"(This makes) agencies vulnerable to fraudulent, improper and abusive purchase card activity," said the report, released at a hearing of the Senate Committee on Governmental Affairs.
In one case, the Defense Department's inspector general found a Navy employee had used a government credit card to buy two cars, cosmetic surgery and a motorbike. The cardholder made 59 fraudulent purchases worth more than $132,000.
In another case, a Defense Department employee used a purchase card to charge $1.7 million in fraudulent purchases from a fictitious company set up by her brother.
"Examples like this one demonstrate the need for better controls over the purchase card program and demonstrates why it is vital to give agencies the tools they need to control fraud and abuse," said Sen. Susan Collins, a Maine Republican, at the committee hearing.
Collins said she, along with Wisconsin Democratic Sen. Russ Feingold, would introduce legislation aimed at cracking down on such wasteful spending.
Rep. Jan Schakowsky, a Democrat from Illinois, introduced a similar bill in the House of Representatives this week. "Taxpayers will continue to be bilked out of billions of dollars until we act," said Schakowsky in a statement.
Excuses for buying items were often novel. Asked about a mounted deer head, auditors were told it was to educate airmen about the local deer population.
In another instance $200 of LEGO toy robots were bought to "teach Navy engineers about robotics" while the excuse for buying a $250 Louis Vuitton designer folio was simply listed as "personal preference."
Other examples included the purchase of three global positioning systems for the director of a military program because he "routinely got lost when he went on travel."
The GAO found agencies did not generally try to get more favorable prices on purchase card buys with frequently used vendors -- those where an agency spends more than $1 million a year.
Using a "conservative approach," the GAO said if six agencies got discounts of just 10 percent from vendors where they spent more than $1 million a year, annual savings could be as much as $300 million.
The audit also found some cardholders were given limits that exceeded historical spending needs. For example, 60 Navy staff each had credit limits of $9.9 million.
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I thought all writers drank to excess and beat their wives. You know one time I secretly wanted to be a writer.---C.K. Dexter Haven
On the surface of it, it sounds horrendous, but if you consider that private sector companies face the same thing then it becomes a matter of dishonest people being dishonest people no matter who they work for. There are those in every element of society that are less than honest with their employer and many of them put these examples to shame.
The GAO has many times in the past exposed similar problems, after the fact, but rarely do they do their job up front and track down and punish those that are doing the fraud. They seem to be content to air the nations dirty laundry in public and go on about their job.
At least some of those expenditures they complain about, even though more costly on the surface of it, may well have been the least expensive way to fix a problem. How many times in your day-to-day experience, has something been broken, holding up a project that costs hundred or thousands or millions of dollars and the cost of a part or quick fix by the most expeditious means is more costly than an "Approved" vendors equipment that is days away from delivery? Do you waste the resources by waiting for the approved product, or spend a the extra dollars to fix it now and get the project back on track. These things are rarely, if ever, considered by auditors regardless of whether they are from government or the private sector.
Nobody ever prints a follow up either, if the GAO is aware of a fraud, what was the outcome? The woman that purchased 1.7 mil from her brothers fraudulent company as an example, is she now serving time in Leavonworth? or did she get a promotion, you never hear "the rest of the story"
Did you know the credit card companies are protected by the government?
I wanted to sue them for giving out credit cards under my name. On the applications that were filled out under my name they had the wrong birthdate. If you want to hear more I will tell...............
Government Credit Card Fraud...
