Results in Brief
transactions from federal agencies that had been granted specific authority over their own purchase card programs, such as the U.S. Postal Service (USPS).16 For these transactions, we requested and reviewed supporting documentation provided by the agency and conducted investigative work. Where a data-mining transaction was related to the acquisition of accountable and pilferable property, we also performed work to verify that the government had possession of the purchased items. While we identified fraudulent, improper, and abusive transactions, our work was not designed to identify, and we cannot determine, the extent of fraud, waste, and abuse occurring in the population of governmentwide purchase card transactions.
We conducted this performance audit from September 2006 through February 2008 in accordance with U.S. generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. We performed our investigative work in accordance with standards prescribed by the President’s Council on Integrity and Efficiency. Appendix II provides further detail on our scope and methodology.
Internal control weaknesses in agency purchase card programs exposed the federal government to fraudulent, improper, and abusive purchases and loss of assets. Based on our statistical testing of all purchase card transactions, we estimated that 41 percent of the transactions were not properly authorized, or there was no evidence that the goods and services were received by an independent party (independent receipt and acceptance). For purchases exceeding the micropurchase threshold of $2,500, we estimated that 48 percent did not have proper authorization or independent receipt and acceptance. With respect to purchases over the micropurchase threshold, we also tested whether agency officials obtained the requisite number of bids or quotes prior to purchase, or showed evidence that competition was not required, as part of our test for proper authorization. Additionally, our inventory work on a nonrepresentative
16All USPS purchase acquisitions are excluded from adherence to FAR regulations. Handbook AS-709, Credit Card Policies and Procedures for Local Buying, explains the policies and procedures of the USPS purchase card program.
GAO-08-333 Governmentwide Purchase Cards