Recent news that reinforce the importance of P-Card monitoring
As more companies opt to reduce costs by introducing purchasing card (P-Cards) programs, stories of employees misusing the cards are increasingly making the news. Here are some of the stories making headlines recently:
According to an audit conducted by the agency’s inspector general, employees of the U.S. Environmental Protection Agency (EPA) used their government P-Cards to purchase fitness club memberships. This isn’t the first time that the agency’s P-Card program has been found lacking in oversight: in 2014 the inspector general published a report indicating that of the more than $150,000 they reviewed, almost $80,000 were for prohibited, improper or erroneous purchases.
The U.S. Government Accountability Office (GAO) says that approximately 20% of transactions made on government-issued P-Cards lack the documentation needed to substantiate the approval process. Because of this report and others stating that cards are being misused, the U.S. government has introduced enhanced training, monitoring and guidance—including the requirement to maintain proper documentation—to reduce misspending.
The expenses of a former council leader in the UK are under review for potentially breaching the Cheshire West & Chester Council’s P-Card procedures. The employee used his P-Card to pay for “subsistence, travel and accommodation”—purchases the council’s P-Card program don’t allow. The former council leader denies any wrongdoing, though a police review into the matter is also underway.
The Western Area Power Administration, a division of the United States Department of Energy, has been accused of having “a culture of corruption” that allowed employees to spend millions on questionable and sometimes fraudulent purchases using their government P-Cards. Internal reports indicate that the card misuse was able to continue for years due to lax or—in some cases—non-existent oversight. After an audit the covered the two-year period of 2012–2014, 11,600 questionable expenses were found, adding up to $6.8 million in purchases requiring further review.
A routine audit of a Louisiana school board found that a building custodial supervisor abused his P-Card over a period of three years. The employee misused the card to purchase fuel for his personal vehicle, accumulating almost $11,000 in charges, of which he repaid approximately $3,700 of before resigning from his post. In response, the school board’s transportation department has updated its fuel-use policy, and will require employees to agree to before being issued a new PIN for their cards.
Want to protect your company’s P-Card program from falling victim to similar cases of fraud? Watch our webinar series, ‘Preventing Card Abuse and Misuse’ for useful tips on how to find trends and outliers in your P-Card data, detect personal purchases, and detect travel and entertainment (T&E) expense disbursement fraud. Watch the full recordings here.
About Anu Sood
Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.