Posted on 07/17/2002 7:39:56 AM PDT by Stand Watch Listen
Washington -- Army personnel misused government credit cards last year to pay for dating services, pizzas and at least $2,400 in L.L. Bean Inc. parkas, the General Accounting Office said in a report.The Army's system for monitoring use of cards for purchases under $2,500 is flawed, permitting numerous cases of fraudulent, wasteful or improper transactions, GAO said in a review of card use at four U.S. installations and by the Texas National Guard.
The examination by the investigating arm of Congress follows a Pentagon Inspector General examination of the 13-year-old "purchase" card program -- the Defense Department's bid to streamline its acquisition process. An earlier GAO review disclosed similar abuses at two naval facilities in San Diego.
"Based on our identification of a number of potentially fraudulent cases at installations we audited, we believe that the number of cases involving potentially fraudulent transactions could be significant," GAO said in the report.
The Pentagon wouldn't comment, said spokesman Glenn Flood. Officials said controls on the card's uses must be tightened to prevent a loss of public support as Congress considers the biggest military spending increase in 35 years.
The Pentagon issued 207,025 cards to personnel who made 10.6 million purchases totaling $6.1 billion last year. The cards are for purchases of $2,500 or less, such as office supplies and equipment or smaller military items that don't require the paperwork and approval process for larger acquisitions.
Citigroup Inc. and U.S. Bancorp process transactions before military officials review and certify the purchase. Minneapolis- based U.S. Bancorp is the parent of U.S. Bank.
'Ineffective Oversight'
"A weakened overall control environment and breakdown in key government control activities leave the Army vulnerable to potentially fraudulent, improper and abusive purchases," the report said. "A major contributor to the weak, overall control environment is ineffective oversight."
The report is to be released tomorrow during a hearing of the House Government Reform subcommittee on government efficiency.
Pentagon Comptroller Dov Zakheim in March, responding to the earlier criticisms, set up a task force that issued 25 recommendations to tighten controls.
"Although the task force believes that most purchase cardholders are using the card appropriately, audits and investigations reveal more problems than are acceptable in a mature program," the task force report said.
Transactions Reviewed
Congressional investigators reviewed 258,000 transactions in 2001 at Fort Hood, Texas; Fort Benning, Georgia; the Army Soldier, Biological, Chemical Command, Natick, Massachusetts; Eisenhower Army Medical Center, Fort Gordon, Georgia; and various locations of the Texas National Guard.
The agency culled the Army transactions from the records of 10 million purchases by the military.
All the location lacked effective internal procedures to set up a system that would deter fraud or abuse, GAO said.
The GAO investigation discovered a card user at an undisclosed location charged $630 on June 15, 2001, for a New Jersey-based escort service. The transaction was approved while the person was a billing officer at the base, the GAO said.
A Fort Hood civilian who left the Army in early 2001 charged $524 for pizza and prepaid telephone cards in June 2001. The approving official failed to review documentation or discover the cardholder left the service, GAO said. The card was active as of December 2001.
A civilian working with a vendor at an unidentified base made 62 unauthorized purchases of $12,832 in six months for car repairs, gas and groceries. The fraud was undetected because the approving official didn't review records until the GAO audit.
Computers, Parkas
At the Eisenhower Army Medical Center, a cardholder, the approving officer and several soldiers colluded to buy an about $100,000 in products such as electronic game stations, computers, digital cameras, a 32-inch television and stereo system for their use. Criminal investigators began a review after the GAO audit.
A Fort Benning military cardholder spent $30,000 for personal goods and cash advances in 178 transactions before and after he retired. "It appears the approving official's certification was only a rubber stamp and did not notice charges were continuing after the cardholder retired," GAO said.
Fort Hood paid improper mobile telephone charges because no one was monitoring, GAO said. One cell phone user who had a $79.95 per-month plan with 650 minutes of airtime exceeded the plan by $1,040, $795 and $523 in three months last year.
"Fort Hood officials told us the excessive charges occur because units do not have the appropriate monthly plan" and stem from personal use, GAO said.
At the Natick, Massachusetts, command, a card holder bought 10 L.L. Bean Gore-Tex parkas for $2,400 for employees who worked outside in the cold. "These jackets were not used solely for official use," GAO said. "The employee were allowed to take the jackets home and wear them in off-duty hours."
Wonder how this works now ? Used to be that I was issued a corporate card with no limit. If I bought something the bill was sent to my home and I had to file my travel voucher with DOD finance office for "my" reimbursement of funds I paid to the Credit card company from "my" billing address.........not Uncle Sugars............
If I missed a payment, just as any other CC holder the card was canceled or purchase power suspended till they were paid ect ect. That process seemed to keep GI's honest back when.......
Stay Safe !
The population of people working for DoD are a microcosm of the nation as a whole, and credit card debt is considered acceptable to the average serviceman or civil servant. In this case, however, the debt is supposed to be for official expeditures and paid in full within 30 days of using the card. DoD is doing a lousy job of enforcement and the program needs to be completely re-vamped, if not done away with altogether. More comments Here
We'll we "officially" used condoms to cover a .50 caliber dearmer. Or the time we bought a case of curex fingernail polish remover from a small town drug store at 3 am. It's acetone base was used to render safe some old dynamite that had formed crystals.
The best ones are when you need more demolitions materials than the few pounds of "C" that ya had on ya and you had to go to the local feed and seed or chemical supply house to make yer own boomage per se.....
I think the most I ever had to put on the card was 6 rented motorhomes and dozens of rental 4x4's for a 90 day range clearance. I think that tab would have been less had I just bought the vehicles and built a house on site but hey ! At the time it was someone elses money and I had a job to do...........!
Bottom line is that I "always" had to justify my use of the cards an if that is not mandated for all users then indeed it needs to be "revamped " as you suggest.
Stay Safe !
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