Audit: Beer, iPods Among Homeland Security Emergency Expenses Post-Katrina

WASHINGTON – Wielding government-issued credit cards, Homeland Security employees racked up hundreds of thousands of dollars in unjustified expenses last year, including booties for rescue dogs, iPods, designer rain jackets and beer-making equipment, according to a congressional audit released Wednesday.

Investigators also cited more than 100 missing laptop computers that department employees bought in Hurricane Katrina's aftermath, although officials say at least some have been found.

Poor training, lax oversight and rampant confusion over what employees are allowed to buy with government-issued credit cards "allowed potentially fraudulent, improper, abusive, or questionable transactions to go undetected," Government Accountability Office investigator Gregory D. Kutz told a hearing by the Senate Homeland Security and Governmental Affairs Committee.

He estimated that 45 percent of department purchases with the cards — reviewed from June to November 2005 — were deemed improper.

The report "shows yet again that the Department of Homeland Security seems to be sometime run more like a college fraternity house, than an agency meant to protect us from terror," said Sen. Charles Schumer, D-N.Y.

Kutz said about 9,000 Homeland Security employees carry credit cards for business-related expenses. The cards usually have a $2,500 spending limit, but that was raised to $250,000 for emergencies after Hurricane Katrina hit last Aug. 29.

Homeland Security chief financial officer David Norquist said new department-wide spending guidelines will soon be enforced, which should eliminate much of the confusion and make sure purchases are strictly supervised. He also promised a crackdown on department shopaholics who use their cards improperly.

Sen. Norm Coleman, R-Minn., said he was outraged that Homeland Security does not already have department-wide spending standards in place.

"Is it a sense of, 'Well, it's not my money?" Coleman asked Norquist. "We give cards to folks and ultimately the responsible party is not the cardholder. It's the government. That's who's responsible."

Answered Norquist: "I would rather focus on the accountability of the people involved, because in the end, some of these are just about good judgment on the individual with the card."

Among the expenses investigators described as abusive or questionable:

—More than 2,000 sets of dog booties, costing $68,442, that have sat unused in storage since emergency responders decided they were not suited for canines assisting in Gulf Coast recovery efforts.

—Three portable shower units for $71,170 from a contractor who investigators said overcharged the government. Customs and Border Protection agents could have gotten similar showers for nearly a third of the price — and faster.

—12 Apple iPod Nanos and 42 iPod Shuffles, priced at $7,000, for Secret Service "training and data storage." Because the Shuffles cost less than $300, the Secret Service said they were not required to track them to ensure they were used properly.

—37 black Helly Hansen designer rain jackets, costing nearly $2,500, for use in a firing range that the Customs and Border Protection purchaser later acknowledged shuts down when it's raining.

—Conference and hotel rooms at a golf and tennis resort at St. Simons Island in Georgia, worth $2,395, for training 32 newly hired attorneys when they could have used a nearby federal law enforcement training center.

—A beer brewing kit and ingredients for more than $1,000 for a Coast Guard official to brew alcohol while on duty as a social organizer for the U.S. Coast Guard Academy. "The estimated price for a six-pack of USCG beer was $12," the investigators noted, adding: "Given that the six-pack cost of most beers is far less than $12, it is difficult to demonstrate that the Academy is achieving cost savings by brewing its own beer."

Investigators also noted that Customs and Border Protection wasted up to $464,586 by buying meals-ready-to-eat over the Internet instead of contracting through the Pentagon, as is standard procedure. And they found that the Federal Emergency Management Agency cannot locate 22 printers and two GPS units worth $170,000, as well as 12 of 20 boats the agency bought for $208,000.

Department officials said they have found most of the missing laptops but did not immediately have exact numbers. Senators said 74 of 107 of the lost computers were reported found Wednesday morning.

About 70 Homeland Security employees have been disciplined for improper card purchases, department officials said. The department spent $435 million with the purchase cards in the 2005 budget year, compared to $296 million in 2004.