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Best Practices for Purchase and Travel Card Integrity

Date: 
February 18, 2016
Program Area(s): 

The US Department of Housing and Urban Development (HUD) expects PHAs to implement strong internal controls over purchase and travel cards.   The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at title 2 of the Code of Federal Regulations Part 200 (formerly Office of Management and Budget Circular A-87) sets out the Federal cost principles that govern what purchases are allowable.  PHAs must follow these regulations as well as State and local laws as applicable. Purchase and travel card abuse is among the issues commonly identified during HUD’s Office of Inspector General (OIG) audits or investigations of PHAs.  Past reviews have uncovered cases of purchase or travel card fraud and misuse committed by PHA commissioners, executive directors, and other staff.  These individuals, entrusted with public funds, have spent tens of thousands of dollars on personal items, such as fine dining, casino gambling, alcohol, cameras, pet supplies, cruises, sporting events, golf supplies, concert tickets, and manicures.  While even small dollar purchases of ineligible items are not permitted, ignoring them can lead to large losses, if continued over a long period.  For example, an executive director in Ohio made $583,000 in fraudulent credit card purchases over a 5-year period.  In many cases, violators create false documents or destroy or alter original receipts to cover up the fraud.

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