Posted on 04/08/2008 6:14:57 PM PDT by NormsRevenge
WASHINGTON - Federal employees charged millions of dollars for Internet dating, tailor-made 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 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.
The AP reported Sunday that VA employees last year racked up hundreds of thousands of dollars in government credit-card bills at casino and luxury hotels, movie theaters and high-end retailers such as Sharper Image. Government auditors have been investigating these and similar charges, citing past spending abuses.
In Tuesday's report, investigators did not seek to determine the extent of fraud or waste at each agency. They cited numerous cases of questionable spending, which they said represented what could be found government-wide, including the VA.
"The purchase card is a useful tool for the government, and in no way are we suggesting it shouldn't continue to be used widely," said Gregory D. Kutz, GAO's managing director of forensic audits and special investigations, in a telephone interview. "However, I would say these cases once again show that lack of internal controls cost taxpayers millions of dollars and thus continued focus is needed on improving these controls."
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. The dinner bill also included more than 200 appetizers and more than $3,000 worth of wine and brand-name liquor such as Courvoisier, Belvedere and Johnny Walker Gold.
In the Internet dating case, a postmaster charged $1,100 over 15 months for two online services, including the Ashley Madison Agency. The expenses went unnoticed for more than a year even though he was under internal investigation for viewing pornography on a government computer. The postmaster was eventually told to repay the Internet charges but faced no disciplinary action.
_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 — $7,000 of which were purchased a week before Christmas. 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. It was not clear what action, if any, that Justice took in light of the conference expenses, which GAO deemed excessive.
_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. One State Department official later agreed that the charge was questionable and stated that he would not have approved the purchase had he known about it.
"Too many government employees have viewed purchase cards as their personal line of credit," said Sen. Norm Coleman, R-Minn., 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."
Sen. Carl Levin, D-Mich., who chairs the investigations subcommittee, agreed. "Although internal controls over government credit cards have improved, we still have a long way to go to stop the fraudulent use of these cards," he said.
Find them, fire them, prosecute them (and their managers) and make them pay back all misspent funds.
Wishful thinking … I live in a fantasy world. ;-)
Fire every single one of these f-ing parasites. If I abused my company credit card like this my boss would rip me a new orifice.
I don't suppose either of you know anything about this?
I did the same in private industry and was not very popular with some.(there were some reimbursements)
but what about your counterparts in the Pentagon?? It seems there was a story a while back about credit card use in WDC.
Related - I'll bet nothing is ever done about this other than a reprimand with little, if any, restitution and penalties.
And these are the people they want IN CHARGE of YOUR HEALTHCARE!!!!!!
“women’s lingerie at Seduccion Boutique for use during jungle training”
Things can get tough in the bush.
Nope, it’s just like a charge card that you would procure. From the federal travel regulation:
Cardholders are personally responsible for all items billed to the card, unless the card was reported lost or stolen. Employees shall pay the contractor in accordance with the contractor bank payment terms. These responsibilities are explained in the Cardholder Agreement that each employee signs during the application process. Furthermore, employees are not relieved of their obligation to pay the travel charge card bill in those rare instances when the agency has not reimbursed the traveler within the 30-days after receipt of a timely submitted voucher. (FTR 301-52.24)
Where the regulation refers to reimbursement they are referring to the per diem allowances, air fare or mileage, rental car expense and hotel costs that a traveler may claim.
You have a point about the cost of the investigation, but the fact is that these folks are violating the law, it’s just that the violations actually cost taxpayers zero.
I believe the only reason it’s an issue is that part of the contract with VISA is to hold down the incidents of individuals defaulting on the cards.
A fellow employee bought a repair part for his outboard motor. He was gone in 3 days after submitting his expenses.
I was the AOPC for my unit. The card holders HATED me.
If something REALLY looked bad it was passed to the First Sergeant or Commander. I gave the Commander a list of overdue bills once per week. I would give the Flight leadership heads up the week before. They could bring proof of payment to the Commander's Staff meeting...or have time to work on a really good tap dance routine.
You're talking about a govt TRAVEL card. (I have one, too.) These guys were abusing govt PURCHASE cards. Different critters.
I was thinking along those same lines for the USPS! Our finance department is after us if we pay taxes on hotel rooms (instead of providing tax exempt forms, where hotels accept them), let alone do anything else inappropriate. I know someone who was "fired" (actually, allowed to take unpaid leave for the year till he was eligible for retirement) for taking cash advances against his card (for gambling). I don't think the Postmaster in the article can possibly work for the same USPS I do...
And just WHO has been president for the past eight years? A supposed compassionate “conservative”. A real case of don’t care, won’t do anything, and won’t put competent people in charge of these agencies. Think about it when you pay your tax bill next week.
That makes some sense. So I can see why it has become an issue now, with credit card credit falling through a black hole.
I've got news for you. The Gov't already has dominion over the administration of Billions and Billions of our Health Care Tax Dollars in the form of Medicare and Medicaid.
Ask anyone who is involved in either the administration or use of these fraud machines about them. All of the efficiency of the Post Office or IRS lubricated with the grease of the Third Party Payer Syndrome.
Yep. I accidentally bought lunch at the drive-through with mine (my company card and one of my personal cards have the same color-scheme, it’s easy to mix them up) and accounting made me pay it back.
Here’s a different perspective:
The government FORCES government employees to use the government card for travel. You cannot use your own credit card, because they have a contract that forces you to use theirs. If you carry the government card, which is forced on you, there’s always the possibility you can charge something accidentally on it.
There are two types of government cards. The IMPAC card is used for organization purchases. The individual cards are issued to every government employee for travel expenses. IMPAC abuse is a completely different issue than travel card abuse.
Personally, I don’t see a big problem so long as the employee pays off any charges on his travel card. If the government allowed people to use personal cards, there’s no doubt the government cards would be mostly destroyed (personal cards can give rebates or other bonuses the government card doesn’t provide).
As for IMPAC abuse, don’t ask me where that comes from, as the government card managers generally watch IMPAC purchasers very closely. However, so long as it can be proved the purchases are for government use, what’s the issue? Again, the government forces organizations to use these cards for purchases that used to be controlled by the government supply system. If abuse is proven, fire or fine the employee as necessary.
Having dealt with the government for many, many years, I can tell you anyone who wants to give greater power to government is a complete fool. Government does nothing efficiently or economically. That’s a fact!
Unless someone gets enough intestinal fortitude to pick about 1,000 bureaucrats and prosecute them and jail them (not that phony “allowing those crooks to retire with full pensions” crap) this will never end. No President has the guts to take on the corrupt federal bureaucracy. Certainly none of the 3 candidates have that courage.
I don’t think government employees are any more corrupt than private ones. True, there are some who are bad, but most are generally decent people who want to do a good job.
The problem is the system itself. No organization as big and powerful as government can possibly be operated efficiently. It’s just not possible.
That’s why it’s vitally important for conservatives to try and reduce government. It’s the fundamental flaw of compassionate conservatives in my opinion. They have noble goals but they are relying on government to get them done. That’s a fool’s errand for sure.
It is IMPOSSIBLE to make government efficient. It might be made more efficient, but it will never be as good as the private sector. Why idiots want to give up more freedoms to the behemoth is beyond me, but there are no shortage of lib Democrats. Amazing, isn’t it?
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