Contractors often complain that it takes a lot of time and effort to manage company-issued credit cards. The Government has the same issue but on a grander scale. In a six month period ending March 31, 2017, Government charge card holders in just 20 Agencies, racked up more than 1.8 million purchases totaling $941 million using Government issued credit cards.
Twenty Federal Offices of Inspector General (OIGs) got together to conduct an analysis of Government purchase card transactions. The OIGs tested transactions using data analysis tools to identify purchase card transactions that were potentially illegal, improper, or erroneous, such as transactions that were made with prohibited or questionable merchants, transactions with sales tax, transactions with unauthorized third-party merchants, and transactions indicating they were split transactions. From this universe of 562 thousand high risk transactions totaling $588 million, the OIGs selected 1,255 totaling $1.3 million for further analysis.
Of the 1,255 transactions sampled, the OIGs found problems with 501 transactions. Some transactions were identified with more than one deficiency. The most significant deficiency related to purchases from questionable merchants like caterers and florists. Many lacked approval by an approving official. Split transactions, where a card holder will split a transaction into multiple payments to skirt limitations (such as the micro-purchase threshold) was a significant problem. The OIGs found many transactions where the cardholders improperly paid sales tax and found many transactions where cardholders made internet purchases to avoid mandatory sources.
The OIG's recommendations were very generic. They recommended that agencies should take steps to improve controls such as training, policies and procedures, separation of duties, and supervisory reviews to mitigate risks from potentially illegal, improper, or erroneous transactions.
The report, which can be downloaded (or read) at this link, contains useful information for contractors that desire to enhance their employee credit card policies and procedures.