Sloppy oversight of government charge cards at the U.S. Environmental Protection Agency has led to inappropriate spending, an internal audit found.
More than half of the $153,000 in EPA charge card expenses examined by auditors were found to be “prohibited, improper and erroneous purchases,” according to the agency’s Office of Inspector General.
“The EPA did not provide effective oversight to ensure that purchase card holders and approving officials comply with internal control procedures,” the audit said.
In the 2012 fiscal year, 1,370 EPA employees spent nearly $30 million with their charge cards, the audit said.
Auditors examined transactions and focused on expense types identified as “high risk” to come up with the $153,000 sample.
Their investigation turned up multiple examples of cardholders and their supervisors not adhering to EPA policy:
• Some “approving officials” didn’t check transaction logs, allowing one cardholder to make an $800 “fraudulent purchase.”
“In this budget environment, it is especially important that approving officials ensure that cardholders are being good stewards of taxpayer dollars,” the audit said.
• Several prohibited expenses were approved by supervisors, such as an “individual employee membership in an academic organization.”
• Some cardholders spent money on items beyond their authority, like pre-paid family gym memberships.
• Money was spent in some instances without prior approval for the transactions or proper receipts.
• The EPA dispensed about $1,600 in American Express gift cards to workers contrary to agency requirements for awards.
“The gift cards were not an appropriate use of government funds and funds could have been put to better use within EPA programs,” the audit said.
• While charge cards can be used for “light refreshments” at awards ceremonies, in several transactions they bought more extensive meals.
• The agency skipped the 2010 biennial review of its charge card transactions and didn’t implement “corrective actions” identified in the 2008 review.
“Because the EPA’s purchase card biennial reviews are not effective in identifying and correcting internal control weaknesses, the same problems continue year after year,” the audit said.
In a response letter to the audit, an EPA official said the agency agrees with the recommendations and will fix shortcomings.
For example, the EPA plans to use an automated system for logging purchases to ensure the spending is pre-approved, the letter said.
The agency also plans to conduct more training for cardholders and approving officials to ensure they better understand EPA policy, the letter said.