Audit finds EPA workers used gov't-issued cards for dubious expenses

(Office of the Inspector General)

A government audit found employees from the Environment Protection Agency used federally-issued charge cards to buy gym memberships, gift cards and other items that were either forbidden or not even documented.

The report by the office of the Inspector General faulted the agency for not keeping track of scores of transactions made by employees authorized to use so-called "SmartPay" cards. It found more than half of $150,000 in expenditures singled out for scrutiny was not in compliance with federal regulations.

“The EPA did not provide effective oversight to ensure that purchase card holders and approving officials comply with internal control procedures,” reads the abstract of the report, entitled ”Ineffective Oversight of Purchase Cards Results in Inappropriate Purchases at EPA.”

Among the nearly $80,000 in non-approved expenses charged to the cards was:

• Three instances in which card-holding EPA workers purchased gym memberships, two of which were for family memberships.
• Several purchases were made for meeting spaces at hotels without approval from an EPA facilities manager. One cardholder rented space at hotel despite a nearby government conference room, unnecessarily spending over $2,400.
• Inappropriate food purchases such as one for food provided for an award recognition ceremony which is considered a violation of policy.
• Seven transactions of the group sampled showed that gift cards were purchased with the SmartPay cards, including one transaction where 20 American Express gift cards were purchased at $1,588 to provide on-the-spot awards to employees.

In addition, it was discovered by the IG’s office that spending records were not properly maintained and that two transactions totaling $26,152 could not be located. The EPA requires that documentation on purchases be maintained for three fiscal years. One cardholder even stated that he lost the documentation, raising the possibility of fraud, according to the report.

In the report, the IG’s office recommended tighter oversight and better record-keeping of transactions.

“We recommend that the EPA implement regular transaction reviews to determine if the cardholders and approving officials are complying with EPA guidance," the report stated. "The EPA should provide additional training to the purchase card holders and approving officials to address issues identified in this report and institute follow-up actions for the prohibited, improper or erroneous purchases identified in this audit.”

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