Poor oversight and shaky internal controls on the use of government purchase cards to make relief transactions for victims of Hurricane Katrina led to widespread abuse and fraud, according to a report issued by the Government Accountability Office.
A series of audits and investigations by the GAO and the Department of Homeland Security Office of Inspector General agreed that that although the DHS’s Purchase Card Manual “generally contained” effective control procedures, it was not finalized due to a lack of leadership by the CFO in resolving disagreements over implementation. That subsequently led to DHS cardholders following a number of different procedures.
Compounding that were examples of inadequate staffing, insufficient training and ineffective monitoring. The GAO and DHS OIG uncovered several instances of abuses including the purchase of a beer-brewing kit, a 63-inch plasma television costing $8,000 and tens of thousands of dollars for training at golf and tennis resorts.
Other examples of possible fraud were more than 100 missing laptops with a value of $300,000 and $208,000 for the unauthorized use of a boat.
The GAO recommended that DHS implement changes to its draft purchase card manual and issue a final, agencywide version as well as establish policies and procedures to ensure more effective oversight and enforcement of the purchase card program.
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