Friday, May 29, 2009

Widespread abuse of government credit cards

May 29, 2009 - 7:57am


Laser eye surgery may improve one's visual horizons, but it doesn't qualify
as a travel expense, a congressional office says in a report on abuses of
the federal travel card system.
The Congressional Research Service, in a recent survey, found that federal
employees in a wide range of agencies misuse travel cards to buy goods for
their personal use, travel first-class or simply bilk the government.
Among the examples: a Federal Aviation Administration employee who charged
$3,700 for laser eye surgery; a Pentagon employee who received
reimbursements for 13 airline tickets totaling almost $10,000 that he never purchased;
and a State Department employee who took an unauthorized trip to Hawaii on
a first-class ticket.
Auditors had also determined that certain agencies have not collected
reimbursement for millions of dollars worth of unused airline tickets and had
repeatedly failed to pay travel card invoices in a timely manner, according
to the report.
"A private travel agency would be out of business running this kind of
operation," said Scott Amey, general counsel of the independent Project on
Government Oversight. He said the CRS report points out the need for immediate
improvements, including better oversight of all transactions and increased
penalties for misuse.
A 1998 law requires any federal employee who travels more than five times a
year to use travel cards. The CRS said travel card spending increased from
$4.39 billion in fiscal year 1999 to $8.28 billion in fiscal year 2008.
The report said one major problem is the failure of agencies to determine
whether tickets have been used. It cited a Government Accountability Office
study finding that over a seven-year period the Department of Defense may
have purchased more than $100 million in airline tickets that were not used
and had not been processed for refunds. Similarly, the State Department
failed to seek reimbursement for $6 million in unused airline tickets over an
18-month period.
The report also referred to Office of Management and Budget data showing
that the Pentagon had a delinquency rate on centrally billed travel card
accounts of 20 percent. NASA's delinquency rate was almost 16 percent. Federal
agencies received about $187 million in rebates from card vendors in fiscal
2008, and failure to pay bills in a timely fashion prevented agencies from
earning the maximum rebates.
Finally, the CRS said some agencies did a poor job of ensuring that
premium-class accommodations were used only when justified. A 2003 audit by the
GAO found that over a two-year period the Pentagon bought $123 million in
premium-class tickets. Of that, $90 million were not authorized, not
justified, or both.
The CRS report dealt only with travel cards. Federal agencies also use
purchase cards for supplies and services and fleet cards for fuel and service
of vehicles.
Congress has held several hearings on abuses in the chargecard system, and
last week the Senate Homeland Security and Government Affairs Committee
approved legislation requiring agencies to establish safeguards and controls
for card systems and set penalties for violations.
"Agencies can't continue to look the other way while employees are going on
shopping sprees at the taxpayers' expense," said Sen. Charles Grassley,
R-Iowa, sponsor of the Senate bill. He said that among the fraudulent or
questionable charge card tabs have been kitchen appliances, sapphire rings,
gambling, cruises, gentlemen's clubs and legalized brothels.
Rep. Joe Wilson, R-S.C., has a companion bill in the House.
The bills are S. 942 and H.R. 2189.

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