for 81 dinners averaging over $160 per person31 for customers of the Postal Customer Council32 at an upscale steak restaurant. Further, USPS paid for over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand- name liquor such as Courvoisier, Belvedere, and Johnny Walker Gold.
In case 9, a NASA cardholder purchased two 60GB iPods for official data storage. During the course of our audit, we found that the iPods were used for personal use, such as to store personal photos, songs, and video clips. Further, we question the federal government’s need to purchase iPods for data storage when other data storage devices without audio and video capabilities were available at lower cost.
The purchase card continues to be an effective tool that helps agencies reduce transaction costs for small purchases and provides flexibility in making acquisitions. While the overall failure rates associated with governmentwide purchase card transactions have improved in comparison to previous failure rates at specific agencies, breakdowns in internal controls over the use of purchase cards leave the government highly vulnerable to fraud, waste, and abuse. Problems continue to exist in the area of authorization of transactions, receipt and acceptance, and accountability of property bought with purchase cards. This audit demonstrates that continued vigilance over purchase card use is necessary if agencies are to realize the full potential of the benefits provided by purchase cards.
Recommendations for Executive Action
We are making the following 13 recommendations to improve internal control over the government purchase card program and to strengthen monitoring and oversight of purchase cards as part of an overall effort to
31According to USPS, 108 individuals were invited to the dinner, and 95 attended. While USPS was able to provide documentation of the 108 invitees, it was not able to identify the 95 who attended. Further, independent, third-party evidence we obtained from Ruth’s Chris Steakhouse showed that 81 individuals attended the dinner. Our review of the independent documentation also showed that 81 entrees and 81 salads were provided. Therefore, we used the information provided on the merchant receipt to calculate the per-person cost.
32Postal Customer Councils are formed to establish dialogue and improve communications between USPS and its customers—including commercial mailers, organizations, service bureaus, and individuals who use services provided by USPS.
GAO-08-333 Governmentwide Purchase Cards