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Case 3

4

5

6

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Description

of activity

Agency

Various clothing and DOD sporting goods stores

Improper use of credit card

Relocation services

Violation of agency policy

Department of Energy (DOE)

Automatic teller machines

Department of the Interior (DOI)

Improper cash advances

Multiple merchants

USPS

Web-based awards system inconsistent with published agency policy b

Ruth’s Chris Steakhouse

USPS

Excessive cost

Page 27

Total amount

77,700

60,000 52,000

24,300

15,700

13,500

Additional facts

During fiscal year 2006, four cardholders purchased clothing and accessories for servicemembers, including expensive clothing totaling over $45,000 from high-end vendors, for example, Brooks Brothers, Talbot’s, and Johnston Murphy.

The cost of suits and accessories at Brooks Brothers totaled $2,300 per individual.

The four cardholders also purchased over $32,000 at other clothing and “outfitting” establishments.

One cardholder paid relocation services for two employees totaling over $110,000 with convenience checks, thus violating agency policy.

DOE purchase card policy limits convenience checks to amounts no greater than $3,000, except in emergency situations when the purchase card program coordinator may approve a check up to $10,000.

According to DOE officials, the agency no longer uses convenience checks to pay for relocation services.

From July 2005 through September 2006, the cardholder obtained over $24,000 for personal gain by taking over 100 cash advances.a

The cardholder resigned rather than face disciplinary action, and the vendor bank is holding the cardholder liable for repaying the improper advances.

USPS purchased noncash award items—some costing over $600—including briefcases, music systems, 30 GB iPods, and iPod docking stations.

The USPS Employment and Labor Relations Manual (ELM) 18, subchapter 470, specifies that noncash awards should not exceed $50.

USPS officials maintain that their internal Web-based awards system allows for noncash awards up to $3,000, which is inconsistent with the published ELM policy.

According to USPS officials, a January 2006 memo overrode the ELM and allowed for noncash awards over $50.

We found that although the internally issued memo addressed income tax consequence of awards, the memo did not specifically state that it was meant to supersede the ELM, address the inconsistency in policy, or establish a noncash awards threshold.

USPS officials informed us that a correction of its award policy is currently under way to address the inconsistencies described above.

The cardholders charged dinner for 81 individuals at more than $160 per person.

Dinner included steaks, crab, and alcohol charged over a 5- hour period.

GAO-08-333 Governmentwide Purchase Cards

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