GAO Report on Government Credit Card Abuse

The Government Accountability Office recently released a report entitled "Government Purchase Cards: Actions Needed to Strengthen Internal Controls to Reduce Fraudulent, Improper, and Abusive Purchases". The report for the 2006 fiscal year detailed certain improper charges that were put on government credit cards. According to the report, the purchase card program has had success in increasing purchase efficiency. However, the report also notes that "...if not properly managed and controlled, use of the purchase cards results in fraud, waste, and abuse."

The study found that around 41% of all transactions made with purchase cards during that time period were not properly authorized. Around 48% of transactions above the $2,500 "micropurchase threshold" were unauthorized. From the sampling that the GAO studied, around $1.8 million worth of purchases was unaccounted for. The report refers to the failure rate as "unacceptably high." Examples of fraud, abuse and waste were found at "dozens" of government agencies, including:

• the U.S. Forest Service--$642,000 worth of fraudulent use of convenience checks paid to cardholder's live-in boyfriend
• the U.S. Navy--$2,200 worth of lost computer equipment (presumed stolen)
• National Science Foundation--$1,800 worth of fraudulent purchases from a nail salon
• United States Postal Service (USPS)--$1,100 for internet dating sites
• Department of the Interior--$24,300 worth of "Improper cash advances" for personal gain
• USPS--$13,500 for dinner at Ruth's Chris Steakhouse
• Department of State--$360 in women's underwear and lingerie for use during jungle training by trainees of a druge enforcement program in Ecuador
• Department of Defense--$77,000 in high-end clothing stores

You can read the entire GAO report here.
Contact Congress about the GAO report.