Charles E. Gillman Company Accounting Specialist Sales and Marketing Everready Glass Sales Reps Administrative & Professional Jorgensen Brooks Group Counselor Mechanical Komatsu Equipment Co Resident Field Mechanic Trades/Construction RANCHO RESORT MAINTANANCE POSITION Administrative & Professional Tucson Urban League CEO/President WashingtonU.S. credit-card abuses detailedTHE ASSOCIATED PRESS
Tucson, Arizona | Published: 04.09.2008
WASHINGTON — Federal employees charged millions of dollars for Internet dating, tailor-made suits, lingerie, lavish dinners and other questionable expenses to their government credit cards over a 15-month period, congressional auditors say.
A report by the Government Accountability Office, obtained Tuesday by The Associated Press, examined spending controls across the federal government following reports of credit-card abuse at departments including Defense, Homeland Security and Veterans Affairs.
The review of card spending at more than a dozen departments from 2005 to 2006 found that nearly 41 percent of roughly $14 billion in credit-card purchases, whether legitimate or questionable, did not follow procedure — either because they were not properly authorized or they had not been signed for by an independent third party as called for in federal rules to deter fraud.
For purchases over $2,500, nearly half — or 48 percent — were unauthorized or improperly received.
Agencies often could not provide the required paperwork to justify questionable purchases. Investigators also found that federal employees sometimes double-billed or improperly expensed lavish meals and Internet dating for many months without question from supervisors.
"Breakdowns in internal controls over the use of purchase cards leave the government highly vulnerable to fraud, waste and abuse," investigators wrote, calling the government-wide failure rate in enforcing controls "unacceptably high."
The report calls for the General Services Administration and the Office of Management and Budget, both of which help administer the government's credit-card program, to set guidance to improve accounting for purchased items, particularly Palm Pilots, iPods and other electronic equipment that could be easily stolen.
The two agencies were also urged to tighten controls over convenience checks, which are a part of the credit-card program, and to remind federal employees that they will be held responsible for any items if the purchases are later deemed improper.
In response, both OMB and GSA officials agreed with portions of the report. But GSA administrator Lurita Doan noted the vast majority of federal employees use their cards properly and that many oversight measures already are in place.
The GAO study comes amid increasing scrutiny of purchase cards, which are used by 300,000 federal employees and are directly payable by the U.S. government.
Among the expenditures cited in the report:
● An Agriculture Department employee fraudulently wrote 180 convenience checks for more than $642,000 to a live-in boyfriend over a six-year period. The money was used for gambling, car and mortgage payments, dinners and retail purchases that went unnoticed until the USDA's inspector general received a tip from a whistle-blower. The employee, who pleaded guilty to embezzlement and tax fraud charges, was sentenced last year to 21 months in prison and ordered to repay the money.
● U.S. Postal Service workers separately billed more than $14,000 to government credit cards for Internet dating services and a dinner at a Ruth's Chris Steakhouse in Orlando, Fla., for 81 people at a cost of $160 each for steaks and crab. The dinner bill also included more than 200 appetizers and more than $3,000 worth of wine and brand-name liquor such as Courvoisier and Belvedere.
In the Internet dating case, a postmaster charged $1,100 over 15 months for two online services, including the Ashley Madison Agency. The expenses went unnoticed for more than a year even though he was under internal investigation for viewing pornography on a government computer. The postmaster was eventually told to repay the Internet charges but faced no disciplinary action.
● At the Pentagon, four employees purchased $77,700 in clothing and accessories at high-end clothing and sporting goods stores. The spending included more than $45,000 at Brooks Brothers and similar stores for tailor-made suits — $7,000 of which were purchased a week before Christmas. The credit-card holders said the items were for service members working at U.S. embassies with civilian attire. Pentagon rules allow purchases of civilian clothing when performing official duty, but generally only up to $860 per person.
● At the State Department, one credit-card holder bought $360 worth of lingerie at Seduccion Boutique for use during jungle training by trainees of a drug enforcement program in Ecuador.
Workers charged lingerie to lavish meals to taxpayers
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