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.
Or are the individuals responsible only once they get caught?
I guess the answer is neither, remember the defense department lady who paid for her daughters ten thousand dollar wedding and the one that bought herself a new mustang. Rumsfeld never fired either one as far as I remember.
Sens. Coleman and Levins are two of many tyrants sitting on Capitol Hill. Like George III, against whom Americans fought for independence over two and a quarter centuries ago, they have "erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance."
The solution to problems in government is always more government. We are no longer being governed; we are being ruled, and only because Americans refused to put their foot down for so many decades. Too many Congress critters view you and me as their own personal lines of credit. And, after all, if the top bananas in Washington can get away with it, then why should their underlings (stupid bureaucrats) give a damn either?
That said, this goes doubly for the State and local governments.
And who knows how many middle managers and assistants to assistants to nowhere.
Do you seriously expect a POTUS to address this issue, or even be aware of it?
I'm sure some of these employees have been on the job for 30+ years and are protected by their union.
Oh, I will. That's for sure.
Stealing is as wrong in the public sector as it is in the private sector.
I'm Army. I have one for government travel. Need it because I'm TDY, and the logistics of settling my lodging & meals is easier than reimbursing me on a travel voucher.
But I use mine very judiciously.
Send the recipient of the services a copy of the claim from the provider and then give VERY generous rewards for those who report fraud. (The rewards funded out of the very Draconian fines levied against offenders)
It’s only theft if the employee doesn’t pay for the charges. I’m not justifying misuse of the cards, but it’s not surprising giving the millions of government employees and cards out there. It’s just another reason why people should be taking power AWAY from government, not giving it more.
Fire every one, like the private sector would do, no questions asked.
Maybe if the lingerie was made of sheer chiffon camouflage? (snicker)
“Fire every one, like the private sector would do, no questions asked.”
Private companies don’t force every employee to have company credit cards. Granted, the abusers should be fired, but you are going to get a lot of fraud, waste, and abuse in any government program.
How do you know it wasn't something like this?
Are you Army JAG. Thought you were a law school student, or did you already graduate?
At my last duty station in the Navy back in 2000, all senior enlisted as well as civilian were issued these cards regardless of need or want.
I explained to my supervisor if I was issued the card it would go unused so why issue it. In the end I was told that it was Command policy and it was basically forced on me.
I put the card away in a safe place and left it unused and turned back in when I retired from the Navy. For others, not many, but some, the temptation to abuse the privilege got the better of them.
That is what I was afraid of - That these cards are thrown around willy-nilly and the same people who are issuing them are the ones who are responsible for ensuring that their use is monitored and controlled!
You are right, in many instances it is an invitation to someone to abuse the card, sort of like an attractive nuisance that gets otherwise upright people to go astray.
And this is just the tip of the iceberg!
And this is the fundamental “Two Americas” that should really be discussed: Those that are held accountable, live-or-die by the entrepreneurial spirit, and pay almost all of the taxes.
The recipient, the other Other, has a job that demands mediocrity, cannot be fired, and counts success as generating more paperwork and headaches for others to solve. The taxpayer is his mother’s milk, the government is the teet. He is the bureaucrat driving the Taurus and secretly envies those that can do what he cannot.
Can’t say it wasn’t. But I WAS looking at it from my angle, if you get my meaning. ;O)
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