USDA Employees Used Government Credit Cards at Bowling Alleys, Barbershops

$192.2 million in ‘questionable transactions’

• March 25, 2015 11:55 am


U.S. Department of Agriculture employees used government credit cards at bowling alleys, barbershops, and amusement parks, according to an audit by the Office of Inspector General (OIG).

The OIG found $192.2 million in potentially "questionable transactions" by employees using agency purchase cards and convenience checks. The audit, released Tuesday, blamed the improper purchases on poor training.

From a pool of 169,054 questionable transactions, the OIG selected 230 for closer review. The audit found that 174 were questionable, totaling $163,160, because transactions were "prohibited by [the Office of Procurement and Property Management] OPPM’s policy, were not properly approved, or lacked supporting documentation."

"Some of the questionable transactions involved retailers identified as beauty and barber shops, bowling alleys, and amusement parks," the OIG audit said.

"This occurred due to inadequate oversight at both the agency and departmental levels," it said. "Agencies were not consistently training card users or supervisors, were not performing their required reviews, and occasionally overrode or disregarded controls intended to prevent questionable purchases from being processed."

Of the 174 questionable purchases, 50 were self-approved by the employee or processed without any approval at all, totaling $47,044.

Nine purchases totaling $1,141 were made at retailers not authorized by the Merchant Category Code (MCC), which is intended to "prevent potentially improper purchases." The OIG said managers were bypassing the MCC.

"We also found that agency supervisors were overriding a control, the MCC, which is intended to flag questionable transactions—such as those taking place at casinos, or payments to charitable organizations—to prevent the bank from processing them," the audit said.

"When asked why the questionable transactions had been processed, the responsible users or supervisors informed us that they were either unaware of, or had not taken, applicable training," the OIG said.

The review was based on purchases made in fiscal year 2011. According to the audit, 16,415 USDA employees had an agency credit card that year.

The audit also found USDA employees improperly used government credit cards in foreign countries.

"For FY 2011, USDA cardholders reported to U.S. Bank that 489 transactions, totaling approximately $379,315, charged in a foreign currency were erroneous (i.e., possibly fraudulent), which should be refunded," the OIG said.

USDA transactions that were reviewed included employees in the Agricultural Research Service, Animal and Plant Health Inspection Service, Farm Service Agency, Forest Service, Natural Resources Conservation Service, and Office of the Chief Information Officer.

The OIG recommended that the USDA implement standardized training and strengthen its review process for the credit card program.

Published under: Government Waste