An audit of EPA’s use of government purchase cards found that EPA employees and approving officials largely ignored policies and procedures designed to prevent fraud and abuse.
EPA’s Office of Inspector General reviewed a sampling of 80 purchase-card transactions from January through November 2013 and discovered that 75 of the transactions did not comply with EPA policies. “The total sample value was $152,602, of which $79,254 represented prohibited, improper and erroneous purchases,” the office says in a report released March 4.
The “more egregious purchases,” according to the report, included $2,687 for gym memberships – two of which were family memberships – $2,900 for meals at an awards ceremony and $2,400 for meeting space at a nearby hotel. In the latter example, the report notes that the cardholder “did not know he was required to seek approval from the EPA facilities manager.”
“We found a number of transactions where cardholders, approving officials, the purchase card team and program offices were not providing oversight,” the Office of Inspector General says in the report. “Although cardholders must evaluate each purchase request to ensure that it complies with federal and agency acquisition rules, in many transactions, they did not. Although the approving official is responsible for conducting personal and detailed reviews of cardholders’ transactions to ensure compliance with all applicable regulations, policy, special approvals and purchase-card procedures, the approving official frequently did not provide the required oversight.”
The federal government began using purchase cards in the 1980s to enable public employees to buy small-dollar items without having to go through the red tape of filling out requisition forms or obtaining purchase orders. While purchase cards are supposed to be “a low-cost, efficient vehicle for obtaining goods and services directly from vendors,” EPA’s Office of Inspector General asserts that the agency failed to train employees on how to use them properly.
“Since the purchase cards are intended for simple, over-the-counter purchases, and most cardholders are not acquisition professionals, they do not have the training to properly process orders [that] require statements of work, specifications, clauses or indefinite pricing,” the office explains in the report.
In light of its findings, the Office of Inspector General recommends that EPA:
- Implement regular transaction reviews to determine if cardholders and approving officials are complying with EPA guidance.
- Institute agencywide standard operating procedures, and ensure that any deviations comply with guidance.
- Provide additional training on purchase-card policies and procedures to cardholders and approving officials to address noncompliance issues identified in the audit.
- Revise its purchase-card manual to more specifically address purchases requiring closer scrutiny, such as gym memberships and gift cards.
- Determine whether the purchase of gift cards as awards is an appropriate use of government funds, and make the necessary revisions to EPA policies to establish appropriate internal controls.
- Take follow-up actions, as necessary, to hold employees accountable, and recover the funds used for the prohibited, improper or erroneous purchases identified in the audit.
In fiscal year 2012, EPA's 1,370 active cardholders used their purchase cards for over $29 million in purchases, according to the report.
“Improved purchase-card oversight could save the government money, which would be especially helpful in the EPA’s current budget environment,” the Office of Inspector General asserts.
The Office of Inspector General notes that EPA agreed with its recommendations and has provided corrective-action plans to address the issues identified in the audit.