Fraudulent and Potentially Fraudulent, Improper, and Abusive Transactions
Fraudulent and Potentially Fraudulent Activities
approving official, and requester had no recollection of requesting or receiving the iPods. To find out whether these pilferable items could have been converted for personal use and effectively stolen, we asked the Navy to provide a photograph of the camera and iPod, including the serial number. However, the Navy informed us that the items were not reported on a property tracking system and therefore could not be located.
We found numerous instances of fraud, waste, and abuse related to the purchase card program at dozens of agencies across the government. Internal control weaknesses in agency purchase card programs directly increase the risk of fraudulent, improper, and abusive transactions. For instance, the lack of controls over proper authorization increases an agency’s risk that cardholders will improperly use the purchase card. As discussed in appendix II, our work was not designed to identify all instances of fraudulent, improper, and abusive government purchase card activity or estimate their full extent. Therefore, we did not determine and make no representations regarding the overall extent of fraudulent, improper, and abusive transactions governmentwide. The case studies identified in the tables that follow represent some of the examples that we found during our audit and investigation of the governmentwide purchase card program.
We found numerous examples of fraudulent and potentially fraudulent purchase card activities. For the purpose of this report, we define fraudulent transactions as those where a fraud case had been adjudicated or was undisputed or a purchase card account had been compromised. Potentially fraudulent transactions are those transactions where there is a high probability of fraud, but where sufficient evidence did not exist for us to determine that fraud had indeed occurred. As shown in table 4, these transactions included (1) acquisitions by cardholders that were unauthorized and intended for personal use and (2) purchases appropriately charged to the purchase card but involving potentially fraudulent activity that went undetected because of the lack of integration among the processes related to the purchase, such as travel claims or missing property.
In a few instances, agencies have taken actions on the fraudulent and potentially fraudulent transactions we identified. For example, some agency officials properly followed policies and procedures and filed disputes with the bank against fraudulent purchases that appeared on the
GAO-08-333 Governmentwide Purchase Cards