Audit reveals credit misuse

Agriculture Department staff finds $5.8 million in personal charges

? Agriculture Department employees used government credit cards to pay tuition for bartender school, to buy Ozzy Osbourne concert tickets, lingerie and tattoos and to make a down payment on a car.

Based on a random audit of 300 cardholders, the department’s inspector general estimated that 15 percent of the 55,000 USDA employees who carry the government credit cards — or 8,250 employees — made a total of $5.8 million in purchases other than for bona fide travel expenses. The audit covered a six-month period from Oct. 1, 2001, to March 31, 2002.

The cards are intended to cover travel expenses, but many were used routinely whether the employees were traveling or not, according to the audit released Friday. Among the uses were paying for 900 purchases at Wal-Mart, Kmart and Target and making car payments.

The auditors also examined accounts of 25 USDA employees who obtained the most amount of cash out of ATMs. Although 12 of the 25 “never traveled for official government purposes, their card usage amounted to almost $196,000,” the auditors said.

Sometimes workers used the cash to pay off personal debts and then to repay the bank that is on contract to provide the department with the credit card accounts, according to the report.

“As a result, improper charges, if unpaid, could negatively impact the department in the form of lost rebates from the contractor bank if the delinquencies were eventually written off,” auditors warned.

They also said that as of December, 1,549 former employees were found to have still-active cards in their possession.

The auditors found the department has no policy for disciplining workers for misuse of cards and is inconsistent when it does punish them. In most cases, the agency suspends the worker for a few days, sends a letter of reprimand, restricts travel or requires the employee to undergo counseling.

Julie Quick, a department spokeswoman, said administrators were informed which cardholders had been misusing the cards and expected them to be reprimanded.

Quick said she wasn’t aware of whether any employees were fired but said workers were being advised how to use the cards properly. Also, credit limits have been lowered and cash advances restricted, she said, “but the important point for us is that we’ve established an across-the-board zero tolerance for misuse of the cards.”

Clyde Thompson, the department’s associate assistant secretary for administration, agreed to the audit’s findings in a written response and said new policies to guard against credit card abuse would be fully implemented by February. Some of the new policies will go into effect by September and November this year, he said.

“We also will remind employees that travel card misuse is a serious offense, and USDA will take action against employees who abuse government credit cards,” Thompson wrote. He did not specify the types of penalties that employees would face.

Sen. Charles Grassley, who has criticized the Pentagon for its problems with credit card abuse, said the Agriculture Department had an obligation to take swift action to prevent its workers from misusing cards.

“It’s obviously unacceptable for federal employees to use government travel cards to go to bartending college, and it’s wrong for employees who don’t travel for their government work to use government travel cards,” said Grassley, R-Iowa. “The agencies who allow this kind of abuse must be held accountable.”

Grassley and Sen. Robert Byrd, D-W.Va., led an effort last year to include provisions in the Defense Department’s budget to prevent credit card abuse.

Last year, audits by the General Accounting Office revealed federal workers had used the cards at adult clubs, brothels, sporting events and to buy jewelry.

The findings prompted the Bush administration in October to cancel thousands of credit cards at the Defense Department. Also, the Education Department blocked payments to thousands of businesses. Paychecks were docked to collect unpaid bills.

The Agriculture Department tried to block payments on certain purchases as the inspector general’s office worked on the latest audit. Nevertheless, the auditors said they were still finding instances where the cards were used to buy goods at stores including The Gap, Cigarettes for Less and the Oregon Liquor Store.