Los Alamos steps up purchase card oversight
Los Alamos is taking steps to prevent purchase card fraud similar to that exposed by two whistleblowers in the fall of 2002, according to Energy Department investigators.
In the wake of management lapses, Los Alamos National Laboratory has improved its oversight of government charge cards, according to a recent investigative report.
Managers at the New Mexico nuclear facility have reduced the number of employees holding government purchase cards and fine-tuned the process of approving card transactions, the Energy Department Inspector General's office concluded in the April report. The IG's office analyzed 60,000 fiscal 2003 purchase card transactions at the lab.
In the fall of 2002, two whistleblowers alleged that Los Alamos managers knew of purchase card fraud, but looked the other way to avoid jeopardizing the University of California's contract to run the lab for the Energy Department. These revelations prompted increased congressional scrutiny and a management shake-up at the lab.
Since then, Los Alamos has taken a number of steps to better monitor the use of purchase cards, which are intended to help government officials buy less expensive items without going through a lot of paperwork, the IG report stated. Lab officials decreased the number of government charge cards in circulation from 800 to 550 to reduce the risk of fraud.
Los Alamos managers now examine charge card purchases in several stages. An "approving official" reviews receipts regularly and a "group manager" looks over monthly transactions. The lab's Purchase Card Office also searches monthly lists of purchases for unusual items. Each quarter, managers pick more than 100 card holders and assesses every purchase they made.
No charge card holders at Los Alamos can self-approve purchases any more, the IG report noted. Approving officials also have fewer transactions to oversee.
In addition, Los Alamos is improving its training for charge card holders, inspectors concluded. Lab employees now receive lists of items they cannot buy with the cards, and learn more about how to document purchases. If employees or managers skip out on training, they lose their government charge account.
There are several steps Los Alamos could take to further advance purchase card management, the Energy IG said. The lab could impose harsher penalties on employees who violate charge card rules and "identify trends in repeat offenders or categories of violations."
In addition, lab officials should consider using computer software designed to review purchases, the IG recommended. The technology would help managers catch odd behavior that is difficult to detect when looking over receipts by eye, the report explained.
For instance, by using a computer program to review more than 60,000 transactions from 2003, the inspectors found 58 instances where employees may have split up larger orders so they would not overspend their card limits. "Absent a compelling justification, split purchases are an unacceptable practice," the IG explained.
Los Alamos also could revamp its list of items that cannot be bought using purchase cards. The list should include explanations of why items are off limits, and clearly outline procedures for seeking exemptions, the investigators said.
Lab officials agreed with the IG's suggestions and are implementing some. For instance, Los Alamos is purchasing computer software to analyze purchase card data.