selection of assets found that control weaknesses over accountable property procured with the purchase card resulted in missing or stolen assets; some of these assets appeared to have been acquired for personal use. We also found that agencies could not provide evidence showing that they had possession of, or could otherwise account for, 458 of 1,058 accountable and pilferable items. The missing items were valued at over $1.8 million, out of over $2.7 million tested.
Overall, the results of this audit show that the governmentwide failure rate is unacceptably high. However, it is lower than the failure rates we have previously reported at certain individual agencies. For example, in 2002, we reported that the estimated failure rate for independent receipt and acceptance was 87 percent at one Department of the Army (Army) location,17 and in 2006, we estimated that 63 percent of DHS purchase card transactions failed the same control test.18 In comparison, for this audit, we estimate that 34 percent of governmentwide transactions did not have receipt and acceptance. Because prior audits had been restricted to individual agencies, we cannot state conclusively that the lower failure rate is attributable to improvements in internal controls governmentwide. However, some agencies with large purchase card activities, such as DOD, have implemented improved internal controls in response to our previous recommendations. The Office of Management and Budget (OMB) also increased scrutiny over the program, as evidenced by the issuance in 2005 of Appendix B of OMB Circular No. A-123, Improving the Management of the Government Charge Card Program, prescribing purchase card program guidance and requirements.
Weak internal controls over proper authorization and independent receipt of purchase card acquisitions expose the government to fraudulent, improper, and abusive purchase card activity and loss of assets. Examples of fraudulent, improper, and abusive activity we identified through statistical sampling and data mining of purchase card transactions governmentwide19 included the following:
17GAO, Purchase Cards: Control Weaknesses Leave Army Vulnerable to Fraud, Waste, and Abuse, GAO-02-732 (Washington, D.C.: June 27, 2002).
19As stated previously, we statistically tested executive agency purchase card transactions from July 1, 2005, through June 30, 2006. With respect to data mining, we included transactions from July 1, 2005, through September 30, 2006, and transactions from agencies that were exempt from the FAR.
GAO-08-333 Governmentwide Purchase Cards