The IRS lacks sufficient controls to provide assurance that its employees do not improperly use government-issued purchase cards, the Treasury Inspector General for Tax Administration has said.
It said during fiscal 2010 and 2011 the agency had 5,241 purchase card accounts, and that cardholders made approximately 234,000 purchases totaling $103.2 million.
According to the audit the IRS lacks a policy to timely cancel purchase cards prior to employee separation, it lacks guidance defining what qualifies as a split purchase for office supplies, and lacks a process to review credit card purchases to detect personal use.
The IG raised concerns about the purchase of improper decorative and give-away items for managers’ meetings and Combined Federal Campaign fundraising events, although the IRS maintains the items were appropriate.
IRS officials also used purchase cards to pay for multiple lunches, dinners, and related alcohol purchases when entertaining foreign officials during an International Executive Conference in 2010 – including a dinner rounding out to $140 per person, TIGTA noted.
It acknowledged that the expenditures were authorized but said they were high and questioned their reasonableness.
IRS management agreed with recommendations to: require purchase card accounts to be closed prior to the date of a cardholder’s separation; clearly define what constitutes a split purchase; develop an oversight process to identify IRS employee personal use of purchase cards and other inappropriate purchase card transactions; and, require its credit card services branch to report all instances of potential inappropriate use of purchase cards to the labor and employee relations function for potential disciplinary action.
