Purchase Cards: Control Weaknesses Leave Army Vulnerable to Fraud, Waste, and Abuse
Abstract
The Department of Defense (DOD) is promoting department wide use of purchase cards for obtaining goods and services. It reported that for the year ended September 30, 2001, about 230,000 cardholders used purchase cards to make about 10.7 million transactions at a cost of over $6. 1 billion. Purchase cards are to be used exclusively for government-related purchases. Purchase card transactions include acquisitions at or below the $2,500 micropurchase threshold, commercial training requests valued at or below $25,000, and payments on contracts. The use of purchase cards has dramatically increased in past years as agencies have sought to eliminate the lengthy process and paperwork long associated with making small purchases. The benefits of using purchase cards versus traditional contracting and payment processes are lower transaction processing costs and less "red tape" for both the government and the vendor community. We support the use of a well-controlled purchase card program to streamline the government's acquisition processes. However, it is important that agencies have adequate internal control in place to protect the government from fraud, waste, and abuse. In July 2001 and March 2002, we testified on significant breakdowns in internal control over purchase card transactions at two Navy sites in San Diego, California. This work identified a weak internal control environment; ineffective internal control; and potentially fraudulent,2 improper, and abusive purchases.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2002
- Accession Number
- ADA404578
Entities
Organizations
- United States Government Accountability Office