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Steak and Cocktails? Lingerie? Charge It to the Taxpayer!

A report released this week by the Government Accountability Office (GAO) found widespread abuses in the use of federal agencies' credit cards. Over the years, government employees have used their "SmartPay" cards to pay for gambling, breast implants for one inventive and compassionate federal employee's girlfriend, online dating services, iPods and lingerie. And what would a report on government fraud, waste and abuse be without the obligatory lavish steak-and-cocktails dinner costing well into the five figures?

The GAO report, based on a representative sampling, found that 41 percent of the purchase card transactions occurring from July 2005 through September 2006 did not comply with federal purchasing guidelines, lacking proper authorization or documentation. Federal agencies were also unable to locate over $1.8 million worth of items identified in the audit. Overall, the report found that problems in the purchase card program were "unacceptably high."

POGO recommended 'common sense' rules of engagement several years ago, including consistent program internal controls, training for participants with proper authorizing rules, and rigorous audits on a monthly basis. No reason to forfeit accountability for efficiency.

This report is the culmination of a series of GAO audits conducted over the last several years on the purchase card programs at specific agencies such as the Department of Defense and the Department of Homeland Security. The audit was requested by Senators Norm Coleman (R-MN) and Carl Levin (D-MI). As Coleman told the press, "Too many government employees have viewed purchase cards as their personal line of credit. It's time to cut up their cards and start over."

The General Services Administration-managed purchase cards program was started in the 1990s to help agencies reduce transaction costs for small purchases and provide flexibility in making acquisitions. In fiscal year 2006, about 300,000 government employees made roughly $18 billion in acquisitions with the cards, purchasing everything from pens and pencils to computers, relocation expenses and vehicles.  The report recommends ways the GSA and Office of Management and Budget can minimize improper and abusive purchase card activities. Unfortunately, the GSA is already balking at the majority of the GAO's recommendations.  It is really hard to see why.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Authors: Neil Gordon

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