An April 9, 2008, GAO report on the government’s SmartPay card program (meant to reduce bureaucracy and streamline government purchasing procedures) found widespread abuse. In a sampling of purchases from July 1, 2005 to June 30, 2006, the GAO found 41% failed to meet either of 2 basic internal controls: 1) proper authorization and 2) receipt and signature for goods or services by someone other than the cardholder. In another sample of purchases over the micropurchase limit of $2,500, the report found 48% did not meet one or both of these criteria. While such purchases represented only 3% of the total number of purchases, they accounted for 44% of the dollars spent.
Use of the SmartPay cards has increased from $3 billion in fiscal year 1996 to $17.7 billion in 2006. At the same time the number of cardholders has decreased from 670,000 in 2000 to 300,000 in 2006. For 2006, this comes to some $59,000 per cardholder.
The report noted several cases of abuse and poor book keeping. The Army, for example, could not account for 16 server configurations made up of 256 items which it had purchased for more than $1.5 million. It sent the GAO photos of one server configuration but did not supply proof that this was even one of the configurations in question.
An employee at the Department of Agriculture used the card account to write some 180 checks on the Forest Service’s fire suppression budget to a live-in boyfriend with whom the cardholder shared a bank account. This came to $642,000 and occurred over the course of 6 years (October 2000 to September 2006). The theft only came to light through the actions of a whistleblower. As a result, the cardholder was sentenced to 21 months for embezzlement and tax fraud, 36 months supervised release, and restitution of the money stolen.
Four cardholders at the Pentagon spent $77,000 on civilian clothing and accessories for service personnel from Brooks Brothers among others. This was far in excess of applicable clothing allowances.
An Interior employee took over 100 cash advances from July 2005 to September 2006 worth more than $24,000. The employee resigned rather than face disciplinary proceedings but was still liable for repayment of the money taken.
The US Post Office was hit with a $13,500 restaurant bill for 81 attendees of a conference in Orlando, Florida. This came to $160 per person and included some $3,000 in alcohol purchased over a 5 hour period.
A postmaster subscribed to two online dating services over 15 months (April 2004 to October 2006) using his government purchase card. Although these were the only charges on the card, they were all approved by the Post Office. In the end, the postmaster paid $1,100 in restitution, but no further disciplinary action was taken.
A NASA employee purchased two iPods ostensibly for data storage. Most of the data in question involved songs and music videos.
A cardholder at State purchased $360 in women’s underwear and lingerie from Seduccion Boutique for trainees participating in a jungle training drug enforcement program in Ecuador.
In an Administration where the looting of government is not the exception but the norm and the amounts in question are huge, this kind of pilferage is petty in comparison. At the same time, much of it could be eliminated by simple controls, reminders of agency guidelines, and common sense. If someone can’t see the potential problems with using public funds to buy underwear for jungle warfare from Seduccion Boutique, they don’t deserve to be in government.