Federal employees are buying more with government credit cards than ever, but Americans don’t know how much of the billions of tax dollars being spent annually is legitimate versus what is lost to waste, fraud and corruption.
“We’ve been tracking this issue for years, and that’s why it’s unfortunate that it just doesn’t seem to go away,” Scott Amey, general counsel for the nonprofit Project on Government Oversight (POGO), told The Daily Caller News Foundation.
A widely read report earlier this month detailing a top Pentagon aide’s use of his government credit card at foreign strip clubs highlighted how egregious abuses still plague the federal government. But waste, fraud and corruption can be difficult to catch when credit card spending is so high.
An estimated 261,000 federal employees spent $19 billion using government-issued credit cards in fiscal year 2015, up from 2014’s 263,000 employees spending $17.1 billion, and the most since that kind of spending reached $19.5 billion in 2011, according to the credit card-managing General Services Administration (GSA).
That’s more than enough to buy the five most valuable NFL teams, worth a combined $16.65 billion, and more than twice as much as the $8.4 billion the National Retail Federation expects Americans to spend on Halloween this year.
But efforts to strengthen oversight — like the Government Charge Card Abuse Prevention Act introduced by Iowa Republican Sen. Chuck Grassley and passed in 2012 — haven’t required the federal government to calculate how much is lost to waste, fraud and abuse.
TheDCNF sought to total credit card waste across 16 top cabinet-level departments and agencies, as estimated by their Inspectors General (IGs), analyzing all reports since 2013. But credible figures can’t be calculated because IGs use widely varying approaches to analyzing credit card spending.
The 2012 law requires agencies to submit a report of all “confirmed violations” of credit card abuse to the Office of Management and Budget (OMB) and their IG. The law also requires IGs to “conduct periodic assessments” of the purchase card program. An OMB memo to agencies on how to implement the law clarified — in a footnote — that “periodic” should mean at least once a year.
But most IGs aren’t conducting such annual public assessments, much less issuing reports that analyze yearly government credit card waste, fraud or abuse.
The OMB, which gathers agency and IG reports on credit cards, did not respond to TheDCNF’s repeated requests for information on which agencies and IGs have complied with federal reporting requirements. IGs, when they issued reports, most frequently cited a lack of documentation, too many inactive credit card holders and insufficient training as the most common problems.
A May, 2016, Government Accountability Office (GAO) report reviewing six large agencies — the Department of Defense (DOD), the Department of Veterans Affairs (VA), the Department of Homeland Security (DHS), Department of Energy, the Department of the Interior (DOI) and the Environmental Protection Agency (EPA) — found managers looked for intentional abuses, but questioned whether they might be relying on credit cards too much when other purchasing options might be more cost effective.
But not all credit card reports go public, even when agencies or IGs produce them.
A January, 2015, Department of Energy (DOE) IG report on credit cards covering $143 million in total spending for fiscal years 2011 and 2012 identified no instances of waste, fraud or abuse. But internal DOE audits obtained in August 2015 by TheDCNF found about $6.8 million in potentially fraudulent payments for things like high-end knives, ammunition, and “pimping out” trucks.
The VA accounted for more than half of all government-wide credit card spending in 2015 — more than $10 billion. But the VA IG, although it is auditing credit card transactions, has produced no department-wide audits of the program.
The Department of State IG issued reports covering fiscal years 2013 and 2014 for the $100 million employees spent using government credit cards in each of those years, but did no independent analysis of the data.
The Department of Education IG has issued no public reports on credit cards since the Grassley law went into effect. The IG wrote letters to OMB in February 2015 and January 2016, however, saying, “based on our review, we determined that the purchase card program does not pose a high risk to the department and an audit of the program is not necessary.”
The U.S. Department of Agriculture IG has issued no public reports but the letters it sent to OMB aren’t publicly available. The IG told TheDNCF those letters would likely require a Freedom of Information Act request.
The Department of Defense (DOD) IG has issued no reports on credit card spending across the entire department. The DOD’s credit card spending levels, at $4.6 billion in fiscal year 2015, are second only to the VA’s total.
The Department of Labor IG’s only recent report covering fiscal year 2013 estimated about 5 percent of the 57,000 transactions lacked any supporting documentation, but found no instances of waste, fraud or abuse.
The Department of Justice IG’s one report on credit cards found no instances of waste, fraud or abuse out of $700 million spent by more than 9,000 employees.
Even so, as credit card spending climbs, so must oversight, Amey said.
“Obviously, the law that you referred to did I think add a lot of transparency and oversight over the process so you don’t see some of the crazy or prohibited transactions that you once saw in the old days, but there are still some questions about the lack of oversight with these purchases and poor training with employees in how to use them,” Amey told TheDCNF.
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