Control weaknesses in the Department of Homeland Security’s purchase card program leave it highly vulnerable to fraudulent, improper and abusive activity, the Government Accountability Office has said in testimony before the Senate Homeland Security and Governmental Affairs Committee.
It said that based on statistical tests from a random sample of transactions and data mining on all DHS purchase card transactions for a five-month period beginning in June 2005, a weak control environment and breakdowns in key controls exposed the department to fraud and abuse.
While DHS’s draft purchase card manual contains some effective control procedures, it was not finalized because of disagreements over its implementation, something GAO blamed on a lack of leadership by the CFO in resolving those disputes.
As a result, DHS cardholders did not follow the same procedures — and inadequate staffing, insufficient training, and ineffective monitoring also contributed to the weak control environment, according to GAO-06-957T.
It said this led to breakdowns in key controls, and that there was a lack of documentation that key purchase card controls were performed.
For example, 45 percent of DHS purchase card transactions were not properly authorized, and there was no evidence that goods and services were delivered for 63 percent of purchase card transactions, GAO said.
It said cardholders failed to dispute improper transactions and that DHS made non-competitive purchases — though it was authorized to do so — imprudently and wasted money.
GAO and the DHS inspector general also said convenience checks were used to pay for $460,000 of pre-packaged meals, and that purchase cards were used to pay for a beer brewing kit, an $8,000 plasma television, and tens of thousands of dollars for training at golf and tennis resorts.
