Federal purchase cards abused, GAO says

Homeland Security officials charged taxpayers for a shopping spree after hurricanes ravaged the Gulf Coast, spending tens of thousands of dollars for items such as a beer-brewing kit, dog booties and a 63-inch plasma television set.

The purchases were made using government credit cards with a congressionally approved spending limit of $250,000 that the Government Accountability Office said resulted in numerous cases of fraud and abuse of taxpayer dollars.

Bureaucratic bickering within the department has postponed the implementation of a purchase card policy that dictates how, where and on what employees can spend, the GAO audit said.

More than half of 200 laptop computers on loan to the New Orleans Police Department disappeared, as did some printers and Global Positioning System units, at a loss of $170,000. The Federal Emergency Management Agency also misplaced a dozen flat-bottom boats for which it double-paid $150,000. Homeland Security officials said after a Senate hearing that the boats have been recovered.

A U.S. Citizenship and Immigration Services employee charged $2,300 for material used in a “team building exercise” during an annual leadership conference at the Hyatt Regency Chesapeake Bay Golf Resort, Spa and Marina in Cambridge, Md., which also cost taxpayers $40,000 in travel expenses for employees based in Washington.

The GAO report says 9,000 credit-card holders at the Department of Homeland Security used their cards for more than $420 million worth of goods and services last year, making it the top purchasing agency in the federal government.

Nearly half of the purchases were made without prior written authorization, and 63 percent “did not have evidence that the goods or services were actually received,” the report said.

The “abusive and questionable transactions” include $68,000 for 2,000 dog booties still in storage, $7,000 for IPod music players and $71,000 for three portable showers.

“In cases where appropriate, we plan to refer card holders responsible for these and other purchases to DHS management for possible administrative action,” GAO officials told the Senate Homeland Security and Governmental Affairs Committee.

David L. Norquist, chief financial officer of the department, said it has drafted a purchase-card policy manual that will “strengthen and standardize the internal controls and procedures,” but the new rules have not been implemented.

Hours after the hearing, Homeland Security said the policies will be implemented “within a matter of weeks.”

“At this point, I cannot comment on the specific cases identified by GAO in their testimony,” Mr. Norquist told the Senate panel yesterday.

“I was first briefed on these findings by GAO last Thursday, so I have not had time to explore and resolve these issues,” Mr. Norquist said. “As we do with allegations that arise during the course of our own internal reviews, we will examine these allegations on a case-by-case basis to determine what administrative, disciplinary or other actions are appropriate.”

Purchase-card spending has soared from $1 billion in 1994 to more than $17 billion in 2004, said Sen. Susan Collins, Maine Republican and committee chairman. The card system was implemented as part of the Paperwork Reduction Act.

“It is critical that agencies establish and enforce adequate internal controls to ensure that card holders are responsibly using purchase cards, or are held accountable if they are not,” Miss Collins said.

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