LOS ALAMOS, N.M. – Nearly $4.9 million in employee credit card purchases at Los Alamos National Laboratory were not processed properly, were questionable or had been disputed by the lab and not credited by the bank, according to an audit report.
The report is the result of a three-month investigation by a team led by former Energy Department Inspector General John Layton, who was contracted by lab officials to review LANL's credit card program after potential irregularities were discovered.
"We have concluded that internal control weaknesses existed in the (purchase card) program, which left LANL vulnerable to fraud and abuse," Layton said in a Dec. 12 letter to lab director John C. Browne.
"Numerous cardholders failed to reconcile monthly purchase card statements and managers did not ensure that these statements were appropriately reviewed. Purchases were made in violation of LANL policies and procedures," Layton said in the letter.
A spokeswoman for the lab said LANL accountants have been reviewing the report, attempting to close out accounts and resolve any charges the report described as disputed.
Thus far, the accountants had tracked down all but $316,000 in questionable transactions, unreconciled accounts and disputed purchases, spokeswoman Linn Tytler said.
University of California auditors were double-checking the lab's accounting, she said. UC manages the lab for the U.S. Energy Department.
The report accuses several employees of using the lab's credit cards to buy goods unrelated to their work, including a Ford Mustang, jewelry and casino cash advances. The employees were not identified by name.
The lab contracted PricewaterhouseCoopers to audit the purchase card program. The firm reviewed 170,000 transactions from Oct. 1, 1998, through June 30, totaling $120 million. Auditors also interviewed 36 employees.
Browne said in a statement Wednesday that he was satisfied with the report, noting auditors did not find rampant abuse.
Brown called the report a "valuable guide" for the lab as it continues to overhaul the purchase-card program.
The lab has been under scrutiny since the purchase-card irregularities were discovered.
The FBI, DOE Inspector General, and two congressional committees are investigating the card program as well as allegations of theft of lab equipment.
Investigators from the House Energy and Commerce Committee are at the lab this week interviewing people about the alleged irregularities.
Browne said the lab has already fired one employee for using a lab credit card to buy food, gas and get cash advances. He said the lab was waiting to take action against three others pending results of the DOE inspector general's investigation.
PriceWaterhouseCoopers is continuing its review of the lab's purchasing system and is expected to issue another report in February.