GAO questions Forest Service purchases
- By Sara Michael
- Sep 05, 2003
"Forest Service Purchase Cards: Internal Control Weaknesses Resulted in Instances of Improper, Wasteful, and Questionable Purchases"
Improper supervision of the Forest Service's purchase card program likely led to about $2.7 million in wasteful and questionable purchases, the General Accounting Office said.
A review of the service's fiscal 2001 purchases uncovered evidence of unauthorized transactions and purchases of items highly susceptible to theft, such as snowmobiles and digital cameras, without proper documentation, GAO said in a report released last month.
The Forest Service, which is part of the Agriculture Department, lacked supervision of purchase approvals and had inadequate control over property, GAO's report says. This led to more than $1.6 million in purchases that violated Forest Service policy, including purchases paid for twice, split to avoid spending limits and made on former employees' accounts, the report says.
GAO said it also found $212,104 in purchases deemed wasteful compared to alternatives and $869,825 in purchases that lacked documentation.
Although the $2.7 million characterized as wasteful or improper expenditures makes up a small portion of the Forest Service's $320 million in annual purchase card spending, "it demonstrates vulnerabilities from weak controls that could be exploited to a greater extent," the report says.
In August 2001, the inspector general identified several similar weaknesses. The service tried to remedy them in revisions of purchase card regulations in June 2001, December 2002 and February, the office said. But the changes don't fully address issues of purchase supervision and property control, GAO said.
"Without significant improvements in its internal controls, the Forest Service's ability to detect and prevent improper or fraudulent purchase cards use or to safeguard vulnerable assets will continue to be hampered," GAO's report states.
GAO made several recommendations, including:
* Establishing policies that segregate duties for the phases of the purchasing processes.
* Requiring supervisory review and validation of purchase card transactions.
* Strengthening policies to quickly handle disputed transactions.
* Ensuring property worth less than $5,000 is designated as "sensitive" and documented in an inventory system.
In a response to the report, Forest Service officials said they have taken steps to strengthen the program's management, such as requiring levels of auditing and providing a workshop on oversight. In fiscal 2003, the agency issued a plan to increase the program's effectiveness by taking steps such as reducing the number of cardholders by 10 percent and issuing directions for supervisor review.
"We acknowledge that our purchase card program had some elements of internal control weaknesses as identified in the GAO report prior to and during the period of the GAO audit," the Forest Service said in a letter. "The agency began a series of steps designed to strengthen the overall management of the program."