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EPA Fails to Monitor Its Purchase Card Spending

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A recent report by the Office of the Inspector General (OIG) for the Environmental Protection Agency (EPA) found abuse of the EPA’s purchase cards and significant problems with the agency’s system for ensuring that charge cards are not misused.

The OIG looked at the 67,000 EPA charge card purchases made in fiscal year 2012 and selected an 80-charge sample, worth $152,602. The OIG found 75 of the 80 purchases, totaling $79,259, were prohibited, improper, or erroneous. This sample was not random. The OIG specifically looked for purchases that were atypical in some way in order to better test the controls that the EPA had in place to prevent prohibited transactions: 69 were selected because of a higher risk merchant code, and 11 for being inherently suspicious merchant codes.

Of the 80 highlighted transactions, the OIG identified several internal control oversight issues. The biggest issue was that the cardholders did not verify that they received the item in question, which accounted for 28 of the 80 charges. The second biggest issue was that cardholders did not get prior approval of their purchase, a problem in 24 cases. Other problems the OIG identified: transactions were not funded prior to purchase, the purchase logs were not reviewed, records were not maintained, and prohibited transactions were approved, among other issues.

The OIG conducted this analysis to comply with the Government Charge Card Abuse Protection Act of 2012, which was enacted to address the serious problem of government purchase card fraud, waste, and abuse. Purchase cards had been used to purchase breast implants, lingerie, iPods, and party supplies, all on the taxpayers’ dime. The law requires agencies to maintain records on who uses the charge cards and what they use them for, and requires that the Inspector General perform periodic assessments of the controls that agencies put in place to monitor the use of the charge cards.

The OIG found that the EPA’s oversight was not effective because of inattention by everyone involved, and inadequate training. A recurring theme in the report is the claim by employees that they did not realize they were violating policy. In addition, the internal EPA team responsible for reviewing charge card purchases admitted that they had not been reviewing certain purchases due to a lack of staff. The OIG found that employees did not have training on how to stay compliant with charge card procedures, which created non-compliance with the EPA policies on purchase cards.

While the report notes that the EPA intends to make a number of improvements to auditing and supervision systems, it does not undo the fact that the agency wasted almost $80,000 in FY 2012, plus whatever improper purchases the OIG didn’t catch. These abuses of the purchase card system are remnants of a past where there was little oversight of these programs, and they cannot be allowed to continue into the future. Hopefully by improving its oversight, the EPA can create a more open and transparent system for ensuring that charge cards—and taxpayer dollars—are not misused.

Image from Flickr user 401(k) 2012.

By: Emily Binkow
Legal Intern, POGO

Emily Binkow is a legal intern at the Project On Government Oversight.

Topics: Government Accountability

Related Content: Inspector General Oversight, Waste

Authors: Emily Binkow

Submitted by EPA peon at: June 7, 2014
You have absolutely NO idea the depth of the corruption within this agency that some employees fight against every single day at this agency. The same people who are supposed to be "overseeing" these cards, are in FACT the ABUSERS...I will contact POGO and explain what my encounters were with one of these cards. I am keep detailed records and document everything...I also REFUSED to do anything that even looked illegal. The training I received from the DC folks was thorough and proper, the problem was local lab "management" criminals have a difference set of "rules" they play by and will stop at nothing to force you to do what they want...I was even threatened with disciplinary action because I reported a legitimate ILLEGAL charge to my card one Monday morning. I fought them too. I was surrounded by these idiots as well as the AFGE prick in a conference with DC card overseers and the DC folks told them, "the cardholder is SUPPOSED to immediately call the card bank and CANCEL a card when unauthorized charges are discovered to protect themselves as well as the agency(taxpayers), she is doing what she was trained to do." John C. Beale is small potatoes compared to what I have seen where I work. Mark my word, you haven't seen anything yet...
Submitted by I.M.P.A.C. at: March 31, 2014
Being a "remnant of the past" and in the Congressional Record of the GAO-02-506T audit, the OIG will always be unhappy because they couldn't pursue "whatever improper purchases the OIG didn't catch." Too bad "Examples of Potentially Fraudulent Purchase Card Transactions" of "Adult entertainment, other Internet purchases" with ibillcs.com was for some very sexy "Software, PipeNetwork Calculator, $70" that "Compute[s] pressure and hydraulic head at each node and flow in each pipe." Don't ever recall having the GAO acknowledge that they too suffered from "inattention" to the details. Ms Binkow conflates "fraud, waste and abuse" along with "Travel Card" and "Purchase Card." "breast implants" were purchased on the "Travel Card" where the employee paid the monthly balance and the the credit card company charged the doctor a fee for the use of the card giving a percentage back to the US Government. Any fraud or waste would be an issue with the credit card company contract, not the dumb employee or the doctor.
Submitted by Underledge at: March 29, 2014
This is chicken feed in relation to government waste. Hold the individuals who are responsible for these cards use accountable. Hiring additional staff to monitor would more than cost the taxpayers more than the "wasted almost $80,000".

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