An inspector general audit has found there is a “medium” risk of misspending in the VA’s government-issued purchase card program, through which some $5 billion in purchases were made through more than 7 million transactions in 2019.
While the number of cardholders was down slightly to just above 13,000, both the number of transactions and the amounts involved have been increasing, which “makes it important to have strong controls over purchase card use to safeguard government resources and ensure compliance with policies and procedures that reduce the risk of error, fraud, waste, or abuse,” it said.
In rating the program at medium risk—the same as in the prior review a year before—the auditors identified 1.8 million potential duplicate payments involving more than $400 million by matching transactions that had the same purchase date, merchant name, credit card number, and dollar amount. Using the same methods, they identified some 226,000 potential “split purchases” involving more than $560 million—using multiple transactions for the same purchase in order to keep each under the $10,000 micropurchase threshold where there is less scrutiny.
Other issues the IG identified included excessive numbers of cardholders per approving official; inadequate reporting; increased spending near the end of the fiscal year; and questionable use of convenience checks, which are supposed to be used only as a last resort when no reasonable alternative merchant that accepts purchase cards or electronic funds transfers is available.
The audit further found low risk in the VA’s travel and fleet card programs, which together account for only about 3 percent of department’s total spending on government-issued cards.