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The Army failed to uncover $1.2 million in rule-breaking payments using government charge cards, much of it spent on sport shirts, knives and fishing gear, an audit found.
Pentagon auditors recommended the Army scrutinize such government purchase card (GPC) transactions better. The audit examined 112 transactions valued at $3.6 million and found 17 noncompliant transactions, only one of which the Army had noticed previously.
"The 17 transactions that were noncompliant occurred because cardholders ignored the GPC business rules so the cardholders could make the purchases they needed or wanted to make," auditors said. "The rate of violations of the laws and regulations in the transactions we sampled indicated to us that a risky control environment existed in the Army."
Auditors faulted the Army for failing to adopt the Defense Department's electronic data mining and card management system, called Purchase Card On-line System.
The Army told auditors it is using the system in a pilot program that ends in March.
The Army's government purchase card program is the largest in the Defense Department. In fiscal 2009, it used 53,300 cards and made 4.5 million transactions, which totaled $4.5 billion, auditors noted.
"Only two people in the [Assistant Secretary of the Army for Acquisition, Logistics and Technology] program management office monitor the Army GPC program," the audit states. "Without using a data mining tool, Army program management personnel could not readily review the Army-wide program to assess its risks."
Of the transactions, $1 million was spent by a cardholder in the 3rd Infantry Division's Office of Retention at Fort Stewart, Ga., who was directed by the installation budget office to spent $1 million before the end of the 2009 fiscal year, weeks away.
The cardholder purchased 57,000 items of the sort used as gifts to reward soldiers for re-enlisting. More than 800 items were improperly sent to his home address, including laptop bags, knives, shirts, flashlights, fishing lures and fishing packs, auditors said.
Auditors called the items "highly pilferable," including name-brand sport shirts, jackets and golf balls.
The audit faulted the Army for lax tracking of these items, for their inappropriate purchase in one fiscal year for use in the following fiscal year, and for splitting the purchases into multiple transactions to avoid caps on single transactions.
The Army's investigation found no violations of the federal accountability laws, and its investigation was closed, John Argodale, deputy assistant secretary of the Army for financial operations, said in an internal memo.
At the time of the purchases, five of 3rd Infantry's brigades were deployed in Iraq, and another was in Afghanistan, a Fort Stewart spokesperson said.
Argodale attributed the purchases to an anticipated increase in re-enlistments.