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Auditors: Federal employees misusing gov’t credit cards
BY HOPE YEN The Associated Press

    WASHINGTON — Federal employees charged millions of dollars for Internet dating, tailormade suits, lingerie, lavish dinners and other questionable expenses to their government credit cards over a 15-month period, congressional auditors say.
    A report by the Government Accountability Office, obtained Tuesday by The Associated Press, examined spending controls across the federal government following reports of credit-card abuse at departments including Defense, Homeland Security and Veterans Affairs.
    The review of card spending at more than a dozen departments from 2005 to 2006 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 authorized or they 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 unauthorized 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 and Internet dating 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 government-wide 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 Offi ce 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.
    Among the expenditures cited in the report:
    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 that went unnoticed until USDA’s inspector general received a tip from a whistle-blower. The employee, who pleaded guilty to embezzlement and tax fraud charges, was sentenced last year to 21 months in prison and ordered to repay the money.
    U.S. Postal Service workers separately billed more than $14,000 to government credit cards for Internet dating 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.