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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the HUD’s travel and purchase card programs for fiscal year 2016 based on (1) our annual risk assessment of these programs and (2) our requirement under the Charge Card Abuse Prevention Act of 2012 to periodically review government travel and purchase cards.  The most recent risk assessment found that there was a moderate risk of illegal, improper, or erroneous transactions occurring.  The Act required inspectors general to perform analyses or audits of government charge card programs as necessary.  Our audit objective was to determine whether HUD travel and purchase cards were used for potentially illegal, improper, and erroneous purchases.

Some HUD employees used government travel cards for potentially improper charges.  Specifically, we identified 3,160 travel card transactions that totaled more than $550,000 and contained indications that the employee incurred the charge without a travel authorization.  Also, some HUD employees used government purchase cards without all required approvals.  Specifically, one employee used a government purchase card without all required preapprovals, and three HUD employees used government purchase cards at merchants with agency-restricted merchant category codes without written approvals for that use.

We recommend that HUD develop and implement adequate written policies to ensure that cardholders obtain appropriate authorizations to support charges to their government travel cards and establish a process for submitting a written request for a merchant code unblock to the Office of the Chief Financial Officer (OCFO), develop and implement written policies to ensure that program offices adequately follow up on identified questionable charges and inform OCFO of significant travel card violations when they are identified, and review the identified 3,160 travel card transactions to determine whether they were for official government travel, taking appropriate actions as necessary.  Additionally, we recommend that HUD strengthen current purchase card controls to ensure that purchases are supported by all required approvals before the purchase is made and review the four cardholders with incomplete approvals and determine whether the purchase card use was allowable and proper, taking appropriate administrative actions as necessary.

Recommendations

Chief Financial Officer

  •   2017-KC-0009-001-A

    Closed on Julio 02, 2019

    Develop and implement adequate written policies to ensure that cardholders obtain appropriate authorizations to support charges to their government travel cards and establish a process for submitting a written request to OCFO for a merchant code unblock.

  •   2017-KC-0009-001-B

    Closed on Julio 02, 2019

    Develop and implement written policies to ensure that program offices adequately follow up on identified questionable charges and inform OCFO of significant travel card violations when they are identified.

  •   2017-KC-0009-001-C
    $555,337.00

    Closed on Septiembre 06, 2019

    Review the identified 3,160 transactions totaling $555,337 to determine whether they were for official government travel. If they were not for official travel, OCFO should determine whether the cardholders paid the credit bill for the improper charges, request reimbursement when applicable, and take all other appropriate actions.

Chief Procurement Officer

  •   2017-KC-0009-002-A

    Closed on Diciembre 14, 2017

    Strengthen current purchase card controls to ensure that purchases are supported by all required approvals before the purchase is made.

  •   2017-KC-0009-002-B

    Closed on Diciembre 26, 2017

    Review the four cardholders with incomplete approvals and determine whether the purchases were allowable and proper. If they were not for official government use, OCPO should determine whether the cardholders paid the credit bill for the improper charges, request reimbursement when applicable, and ensure that appropriate administrative sanctions are taken.