IRS Finds Misuse Within its P-Card Program
It appears that even the IRS isn’t immune to purchasing card (P-Card) misuse. A report by the Treasury Inspector General for Tax Administration (TIGTA) dated January 14, 2016 found that the U.S. Internal Revenue Service (IRS) had 13 instances of confirmed purchase card misuse issuance and two instances of purchase card misuse pending final agency action.
Twelve of the 13 confirmed P-Card misuse cases collectively totalled $600 and were associated with the purchase of prohibited items such as hand sanitizer, bottled water, and tissues for office use. There was also one incident where an employee erroneously used his or her government-issued P-Card for a personal transaction.
TIGTA identified one potential P-Card fraud case where an employee may have falsified receipts to conceal two purchases of electronic tablets in July 2011. Further review identified 37 additional suspicious purchases from Office Depot and Amazon during 2011 that totalled almost $2,350.
While these incidents are relatively minor, there have been reports that abuses have been much more extensive. An article in cardrates.com listed their 10 (Unbelievable) Government Credit Card Abuses, and some of them are truly astounding. Some of the top examples of abuse include:
- Department of Defense employees charged $952,258 at casinos and $96,576 at adult entertainment services to their travel cards for a total of $1,048,834.
- $183,000 in cash advances and $2.1 million on non-government-related travel by Department of Transportation cardholders.
- Nearly $800,000 was spent on gift cards by the Bureau of Land Management; $70,000 of that was charged to a single government card at the Idaho State Office.
With their large budgets and numerous card holders, federal agencies are prone to P-Card abuse—but they’re not alone. First Hawaii’s Big Island Mayor, Billy Kenoi, was found to have charged excessive personal expenses on his county P-Card. Now a senior Maui government worker is suspected to have charged tens of thousands of dollars on his P-Card for a kitchen that wasn’t approved by the county.
No matter the type of organization, continuous monitoring of all P-Card transactions can reduce public embarrassment, scandals and extensive external audits.
Contact us to learn more about how you can leverage our technology to help grow your P-Card program, including ways to easily profile P-Card usage across your organization.
About Andrew Simpson
Andrew Simpson (LinkedIn | Twitter) is Chief Operating Officer at CaseWare RCM and has more than 20 years of experience building businesses in the fields of information systems audit and security, data analytics, Anti-Money Laundering and forensics. He is a regular contributor to conferences and a recognized thought leader in financial crime management.