FEMA Workers Ran Up $247,100 in 'Improper Purchases' on Government Credit Cards--Including $4,318 in 'Happy Birthday' Cards
In all, $247,100 in “improper” expenses was made to FEMA credit cards, according to a report by the Department of Homeland Security Office of Inspector General.
“Disaster purchase cards can be used only for disaster needs, using disaster funding, and are the preferred method to pay for disaster-related micro-purchases,” the IG report says. “With more effective internal controls, FEMA could have prevented more than $247,100 of improper purchases or detected them more quickly.”
Between October 2007 and June 2009, the time period in which the OIG reviewed the credit card purchases, the office found a total of 280 people holding disaster-purchase cards spent more than $14.1 million. Office supplies were the most common purchase, but fit within authorized expenses.
The report notes that not every improper use of the cards was for personal reasons. Improper usage falls into three categories: incorrect, unauthorized and fraudulent.
Incorrect purchases are “mistakes caused by an unintentional error during the purchase process.” This could include buying the wrong type of equipment.
An unauthorized purchase includes buying items that are intentionally purchased outside of the cardholder’s purchasing authority. Fraudulent purchases “include those that were unauthorized and intended for personal use; made using government charge cards or account numbers that had been compromised; and correctly charged to the charge card but that involve potentially fraudulent activity.”
The bulk of misspent money – $158,600 – was spent for purposes for which it was not designated.
“More than $158,600 of purchases, by 26 cardholders, used funds designated for other purposes. For example, cardholders bought more than $20,400 of software, printers, facsimile machines, copiers, and scanners using funds designated for other commodities,” the report said.
“By not using the correct categories of funds, these cardholders made it difficult for FEMA to know where money was actually needed and for what types of goods or services. Also, they increased FEMA’s risk of making expenditures in excess of available funds and having unliquidated obligations that could be used for other needs,” it added.
The report continued, “At least $78,000 in split purchases by three cardholders in one FEMA region.
“Items purchased included umbrellas, tents, telephones, and office supplies. All three cardholders should have forwarded the actions to warranted contract specialists rather than breaking up the requirements so that they were below the single purchase limit established for each cardholder,” it said.
“By acting as they did, these cardholders exceeded their authority and violated federal acquisition regulations,” the report added.
The Department of Homeland Security’s Office of Inspector General recommended that FEMA update procedures to make it clearer when a car can be used; to increase oversight, to work more closely with the DHS and JP Morgan Chase, the service provider for the DHS.
FEMA concurred with the recommendations, according to the report.
Inconsistent procedures have caused problems, according to the report.
“A cardholder with extensive disaster experience said that each FEMA region does things differently,” the report said. “When there are multiple sources of written guidance, cardholders can become confused as to which procedures they should follow and what constitutes an eligible purchase.
“Eighteen cardholders and [Authorizing Official] told us that they usually go to their colleagues or the FEMA Organization Program Coordinator for guidance, and a number of cardholders identified confusing guidance as an area needing improvement,” it added.