Homeland Security Passes Starbucks Audit
Watchdog finds $31,000 tab employees racked up in 2013 at coffee company was mostly legit.
As the government's third-largest agency, the Homeland Security Department is vulnerable to waste, fraud and abuse. But American taxpayers will be happy to know that a $31,000 Starbucks tab department employees racked up in 2013 was mostly legitimate, according to a new watchdog report.
The DHS inspector general concluded that 40 of 66 government purchase card transactions totaling $31,413 at the popular coffee company in 2013 were “supported, allowable, and reasonable.” Sixteen of those purchases did not have sufficient documentation, while 10 transactions were fraudulent, the watchdog found. The Starbucks review -- “as a result of concerns raised by members of Congress,” the report noted -- included purchases made by employees at four DHS agencies: Customs and Border Protection, Immigration and Customs Enforcement, U.S. Citizenship and Immigration Services, and the Coast Guard.
The IG said that one agency made multiple purchases from Starbucks--without documented market research. “This may give the appearance that cardholders are not seeking lower priced options based on personal preference,” the report warned.
The coffee audit was part of the IG’s larger review of the department’s charge card programs, which the IG determined was at “moderate risk” of being abused by employees. While DHS has developed internal controls to monitor the purchase and travel card transactions, it doesn’t always did a good job at enforcing oversight within its agencies.
“The DHS OIG did not identify any illegal purchases in the sample of transactions it reviewed; however, it did identify problems where cardholders did not comply with requirements established in DHS guidance,” the report said. “Additionally, the DHS OIG identified instances of employee misuse of the travel card.”
The larger audit, required by the 2012 Government Charge Card Abuse Prevention Act, looked at a sampling of purchase, convenience check, and travel card transactions from the Coast Guard, Federal Emergency Management Agency and CBP.
In its sample of 387 purchase card transactions worth $395,608, the IG found that 189 of those transactions, or 49 percent, did not comply with one of the requirements outlined in the department’s purchase card manual. For instance, in several transactions, the cardholder failed to get the proper approval prior to the purchase; in other cases, employees did not provide any purchase documentation.
The IG reviewed 147 travel card transactions valued at $379,004, and found that 15 of them worth $15,076 did not comply with the department’s policy. The watchdog discovered that one employee used his travel card improperly to buy computer equipment worth $417. Another employee used her travel card to obtain a cash advance, which she told investigators was for upcoming travel. The agency in question is investigating the employee’s use of the travel card after finding other transactions the employee made that were not associated with official travel.
“Use of the travel card when not on official travel is improper, even though the government is not responsible for those charges,” the IG report pointed out.
DHS has an active charge card program: From fiscal 2012 to fiscal 2014, employees charged more than $400 million annually in purchase and travel card transactions.
The department agreed with all four of the IG’s recommendations for better oversight of the charge card program. In particular, DHS is updating its travel card manual to include language on disciplinary actions that can be taken against employees who misuse their travel cards as well as strengthening its data mining system to track and monitor all charge card purchases.