Navy workers go on charge card shopping spree

Navy personnel bought $500 worth of Mary Kay cosmetics, $700 in compact discs and a $400 designer briefcase on their government purchase cards last year, officials with the General Accounting Office told Congress Monday. Weak internal controls make two Navy commands ripe for additional purchase card abuse, Greg Kutz, director of financial management and assurance at the GAO, told the House Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Affairs. Kutz based his comments on a GAO survey on the use of purchase cards at the Space and Naval Warfare Systems Center (SPAWAR) and the Navy Public Works Center, both in San Diego. "The two Navy units we reviewed had a significant breakdown in internal controls over the $68 million in fiscal year 2000 purchase card transactions that we tested," said Kutz. "We found that the primary problem with [internal] controls was that employees simply did not follow them." Sen. Charles Grassley, R-Iowa, who testified before the subcommittee, said the GAO's report shows the Pentagon cannot manage its charge card program. "Credit cards provide a shortcut to the cash pile," he said. "The Pentagon is giving everyone a big scoop shovel and telling them to rip into the national money sack at both ends." The Defense Department used purchase cards for more than 10 million transactions valued at $5.5 billion in fiscal 2000. Officials may use the cards for government purchases of up to $2,500 without going through the paperwork required for major acquisitions. While purchase cards allow federal workers to avoid the government's lengthy procurement process, the Navy commands let too many employees use the cards, according to GAO. For example, 36 percent of SPAWAR employees held purchase cards in 2000, while the command had only one official to approve their monthly card statements. As a result, certification became a rubber stamp at SPAWAR, according to Kutz. "With an average of over 700 monthly cardholder statements at SPAWAR San Diego and only one approving official…proper certification of monthly summary statements within five days of receipt is not physically possible," he said. Capt. Ernest Valdes, commanding officer at SPAWAR, said he was reducing the number of cardholders at his command by 18 percent and had stepped up training in proper use of the card. But Valdes also said management controls on the program were "adequate" and defended some of the purchases questioned by the GAO. For example, Valdes said Navy personnel were justified in purchasing a dozen flat panel computer monitors, which cost up to $2,300 each, instead of opting for a standard $300 monitor. The flat panel monitors use less energy than traditional monitors and free up space aboard Navy ships, according to Valdes. Kutz disputed this rationale, noting that SPAWAR secretaries and accountants were also using the costly monitors and that the cost savings achieved through added energy efficiency are minimal. Grassley and Rep. Stephen Horn, R-Calif., urged the Navy to perform credit checks on employees before issuing them purchase cards. Horn will hold another subcommittee hearing in November to measure progress in purchase card management at the two Navy commands, he said.
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.