NCPA - National Center for Policy Analysis

Government Employees Abusing Credit Cards

May 9, 2014

Millions of dollars are being misused by federal employees, according to a report from the Fiscal Times.

The government issues credit cards to its employees in order to streamline the procurement process, but without oversight, government workers are spending millions of dollars on non-government purchases.

  • According to a new report from the Inspector General of the Labor Department, Job Corps workers and students had used their cards to pay for phone bills, shopping sprees, and visits to the hair salon. The cards were intended to cover travel costs.
  • The Labor Department report found $250,000 in improper Job Corps purchases, but the authors believe the actual number is even higher. They also identified $4 million worth of "questioned purchase card transactions."
  • The Job Corps has no internal procedures for staff to review or monitor the cash card expenses. Of the 125 Job Corps centers in the U.S., abuse was reported at 98 of them.

These improper purchases reach beyond the Labor Department:

  • According to a recent report from the Inspector General of Veterans Affairs, employees within the agency had misused $650,000 in credit card purchases.
  • The Inspector General of the Environmental Protection Agency found that its employees had used government cards to purchase gym memberships, expensive dinners, and DVDs. Of a 2012 sample of charges worth $152,600, $79,300 were improper.
  • And according to an audit from last year, IRS workers were using their government cards to purchase smart phones, romance novels, baby clothes, diet pills, and pornography.

While Congress passed a law in 2012 requiring agencies to review their purchase card programs, the problem has persisted, and agencies have not reviewed their employees' purchases.

In the private sector, employees are required to submit monthly expense reports to their supervisors for approval. Some companies use software that automatically rejects improper expenses.

Source: Brianna Ehley, "Widespread Abuse of Government Charge Cards," Fiscal Times, May 6, 2014. 


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