Navy units urged to put controls on purchase card use

Officials at two Navy commands should adopt stringent internal controls over purchase card transactions in order to staunch fraud and misuse, the General Accounting Office has recommended in a new report. Purchase cards have been adopted across government to circumvent the time-consuming and costly procurement process for relatively small, routine purchases. The cards may be used for official purchases of up to $2,500 without going through the paperwork required for major acquisitions. However, in July, GAO officials told the House Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Affairs that weak internal controls led to purchase card abuse by employees at the Space and Naval Warfare Systems Center (SPAWAR) and the Navy Public Works Center, both in San Diego. Some of the abuses included purchases of $500 worth of Mary Kay cosmetics, $700 in compact discs and a $400 designer briefcase. GAO's report, "Purchase Cards: Control Weaknesses Leave Two Navy Units Vulnerable to Fraud and Abuse" (GAO-02-32) summarizes the results of its review of purchase card internal controls at the two Navy units. To prevent future abuses, GAO recommended the two installations minimize the number of cardholders, set credit limits for individual users and require credit checks of prospective cardholders. Both units should also develop effective internal review programs that would require a review of monthly statements to identify potentially fraudulent purchases, and implement procedures for documenting confirmation of items and services paid for by purchase cards, GAO said. Most importantly, the report noted, the Navy should include specific consequences for misusing the cards in its policies and regulations. Defense Department officials disagreed with some of GAO's recommendations, including limiting the number of cardholders and developing specific penalties for misuse of the cards. Defense officials said the number of purchase cards issued in each Navy command is based on mission requirements. They also said policies currently in place clearly identify the consequences for misusing purchase cards, by stating that deliberate misuse may be prosecuted as fraud.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security


When you download a report, your information may be shared with the underwriters of that document.