TOPICS
TOPICS
Office of Management and Budget to issue guidance on purchase card requirements
The Office of Management and Budget will issue a memorandum to agency leaders early this week emphasizing and clarifying existing requirements for the use of government purchase cards.
The memo comes on the heels of a Government Accountability Office report that found nearly 41 percent of $14 billion in transactions were not properly authorized or signed for by an independent third party. GAO's sample of transactions more than $2,500 concluded that 48 percent of purchases did not properly comply with federal rules to deter fraud.
GAO recommended that OMB director Jim Nussle issue memoranda reminding agencies of existing controls over purchase card activity, and agency officials said in a conference call last week they would do that. According to the watchdog agency, breakdown of internal controls "resulted in numerous examples of fraudulent, improper and abusive purchase card use." GAO's examples included instances where cardholders purchased Internet dating services, iPods and lingerie.
"What we've taken from this [report] is that we need to do a better job of working with agencies to get them to adhere to the policies that exist," said Clay Johnson, OMB deputy director for management. "On top of that there are certainly opportunities to strengthen some of these policies and put some of them into law."
Johnson and Danny Werfel, acting controller of OMB's federal financial management office, said they are working with lawmakers, in particular Sen. Charles Grassley, R-Iowa, to expand existing OMB requirements into law.
"Once they're law, there's the ability to create stiffer penalties for misuse than are in OMB regulations, so we welcome Congress' help and partnership in building those stiffer penalties into the process," Werfel said.
Legislation to that effect, the 2007 Government Credit Card Abuse Prevention Act (S. 789), introduced by Grassley, passed the Senate Homeland Security and Governmental Affairs Committee last Thursday. A companion bill in the House, H.R.1395, awaits review by the Oversight and Government Reform Subcommittee on Government Management, Organization, and Procurement.
In the official written response to GAO's report, OMB officials agreed that the purchase card program will not be as efficient as it could be unless agencies implement strong and effective controls to prevent waste, fraud and abuse. They said they had designated charge card management a major focus area in 2005 under Appendix B of Circular No. A-123.
OMB also proposed issuing more guidance to agencies, pointing out that Appendix B extends to convenience checks as well as charge cards and agency personnel have financial responsibility with regard to unauthorized and erroneous purchase card transactions.
COMMENTS
- I'm a CO, unlimited warrant and am responsible for the purchase card program...no excuses for these criminals (or their bosses). I didn't notice any heads on pikes outside DOD offices where the worst abuses have always seemed to occurr. Are they recovering the money from these criminals? No. Seize their TSP accounts to pay the government back, then fire them and charge them in court. A few bodies in jail will clarify these people amazingly. Psst...I'd love to see the breakdown of the abusers: sex, grade and dollar amount...that won't happen. Craig Posted April 18, 2008 10:28 AM
- I am a Purchase Card holder ($25,000 limit) and have been for almost ten years. Where I work we use an automated system called "Purchase Card Management System or PCMS". This system works great. All the internal controls are embedded in the system and the proper approvals have to be made before the PC holder is allowed to make the purchase. Purchases over $2,500 require review by our Contracting office (ACA) to ensure we have documented and followed the FAR. Use of this system has led to few problems, except for speeding up the purchase process since everything is automated. Reports can be generated at any time for review. All agencies should look at adopting this system. For those who are determined to break the rules, criminal penalties are appropriate. Seldom are they enforced. The same applies to administrative penalties; they are seldom enforced. This is a Management problem. The proposed laws should cover use of all government issued cards to include travel, purchase, and fleet. Administrative penalties should be identified as well as the criminal. The nature of the infraction should determine what level of penalty is appropriate. In all cases, the legal office should review the proposed action and the Commanding Officer /Executive Director should be the person signing off on the penalty. In addition, a formal report sent to the next higher headquarters should be required. Harry Palmer Posted April 17, 2008 8:53 AM
- The GAO data mined about 25 million purchases conducted between July 2005 and June 2006. Looks like the agencies came out shining if the big issue is that the cardholder did not get someone to independently sign for receipt (which doesn't make sense). In the few examples of frauid - cardholders need to be held accountable and the same goes for the individual who approved them! Maybe then they will start to LOOK at what they are signing. Overall I say Great Job Guys and thanks for saving my taxpayer money! Past Program Official Posted April 15, 2008 5:48 PM
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