A lot of people have trouble keeping their credit card spending under control — ideally, those people aren’t government employees using taxpayer-funded payment cards. In a congressional hearing Tuesday, federal auditors described purchase-card misuse across several government departments, amounting to millions of dollars of misused or wasted government funds.
It’s not the first time this problem has come up. Two years ago, President Barack Obama signed into law the Government Charge Card Abuse Prevention Act of 2012, which was designed to reduce waste, fraud and abuse among employees with government-supplied payment cards. As the auditors’ testimony shows, there’s still a lot of room for improvement.
For example, Elliot Lewis, assistant inspector general for audits in the Labor Department’s inspector general’s office, testified about an audit of the Job Corps program, a nationwide network of campuses offering career development services to at-risk young women and men: About 35% of prepaid debit cards issued to Job Corps centers were misused to buy electronics, clothing, cellphone services and a variety of online purchases, totaling $249,477. These cards were supposed to pay for student travel expenses, but in many cases, Job Corps employees were using the cards for personal gain.
The Job Corps’ use of prepaid cards was pretty inefficient: The program paid $106,776 in merchant fees from December 2009 to March 2013, unused balances totaled $30,000, and four centers had a massive amount ($72,240) of unused cards lying around, increasing risk for fraud and theft.
Then there’s the Environmental Protection Agency. Janet Kasper, director of contracts and assistance agreement audits in the EPA inspector general office, said the agency did not effectively oversee its cardholders. Of the transaction sample auditors reviewed, 94% were not in compliance with EPA policies.
Here’s an example: The audit found three times cardholders purchased gym memberships, prepaying nearly $3,000 for the services, and two of those purchases were family memberships, not just the EPA employee.
An internal review at the Bureau of Land Management found $800,000 of gift card purchases, $70,000 of which were made on a government purchase card of an employee in the agency’s Idaho office, a September report shows.
Just like losing track of your purchase habits can push you over budget, these government oversights can really add up. Unfortunately, we’re not only financially responsible for our spending missteps, our tax dollars support the government’s.
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Image: Carsten Reisinger