GAO issues recommendations for improving purchase card program

Veterans Health Administration employees continue to make improper, wasteful and questionable purchases due to a lack of agency oversight, according to a new General Accounting Office report.

The report (GAO-04-737) makes 36 recommendations to VHA and the Veterans Affairs Department that focus on segregating duties, better documentation, vendor discounts and program monitoring.

GAO found that a failure to segregate duties allowed for questionable purchasing. While the health agency does require that those who authorize transactions be separated from those who make the purchases and record the transactions, it does not require that an independent person receive the merchandise.

According to the auditors, if the worker who receives the purchase is different than the one who buys, the merchandise more likely will be intended for government, not personal, use. "We believe documented independent receiving is a basic internal control activity that provides additional assurance to the government that purchased items come into the possession of the government," the report said.

The watchdog agency also found numerous instances where purchases were not accompanied by supporting documents, such as authorizations or vendor invoices. The auditors said the agency should expect an almost zero failure rate for having documentation since invoices are easily obtained or replaced if accidentally lost. The report said missing invoices should be a red flag for potential fraud.

The report's sampling found that cardholders rarely take advantage of vender-offered discounts, or sometimes credit the discounts toward their own account instead of toward the purchase. Part of the problem, the auditors said, is a lack of agency-established policies to ensure that cardholders take advantage of these discounts. They also said that monitoring officials need to track occurrences to address why and how often discounts are passed over, to allow officials to pinpoint savings opportunities.

GAO's review found that the agency lacked procedures to ensure that cardholder accounts were closed when employees leave the agency, and that credit limits closely match actual needs and spending. One aspect of this, according to the auditors, was a lack of human capital resources to do the monitoring.

The report also detailed training needed to prevent questionable or wasteful purchases. It said that a lack of controls resulted in purchases that violated laws or agency policy. These included food, clothing and gift certificates that were for personal use.

The report urged the agency to take "appropriate disciplinary or corrective action for purchases determined to be not for a legitimate government need."

In response to a draft of the report, Veterans Affairs Department officials agreed with the majority of recommendations, saying the agency "has actions already in place or planned that meet the intent of the recommendations." The agency also pointed out that the reported $435,900 in fraudulent purchases is less than .01 percent of all purchase card activity.

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 Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


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