10/9/14 Credit Card Abuse


The U.S. Transportation Department issues credit cards to employees for official travel expenses.  This could include cash advances, when warranted.

DOT’s IG conducted a random audit of 2012.  It examined 400 cash advances [out of 48,554] and 400 purchases [out of 890,132].

The results showed a program ripe for fraud, waste and abuse.

The IG found 24 cash advances were excessive.  And not a single one was detected by DOT’s internal controls.  Another 83 cash advances weren’t travel-related.  The IG estimated more than $180,000 in cash advances were not travel-related for 2012.

As an aside, the IG also looked at all 218 cash advances taken at gambling casinos.  Yes, gambling casinos. 

27 were taken while not on government travel.  One cash advance of nearly $500 was taken by someone who hadn’t been an employee for more than two years.

Of the 400 purchases examined, 8 were not authorized.  These also escaped detection.  The sample suggests more than $2 million in unauthorized purchases were made by DOT employees in 2012.

Government credit cards are often abused.  A 2008 GAO report estimated more than 40% of credit card use fails to meet basic internal control standards

The GAO gave examples of millions of dollars in fraudulent spending such as the employee who took about $650,000 in unauthorized advances over six years.  While four employees spent nearly $80,000 on clothing purchases.

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