OMB calls for reports on stemming charge card abuse

The Office of Management and Budget is stepping up its oversight of agencies' charge card programs to help end the abuse of federal purchase and travel cards by employees.

In an Oct. 15 memorandum, OMB Director Mitch Daniels told agency heads to start submitting quarterly progress reports on their efforts to overhaul their charge card programs. The first reports are due to OMB's Office of Federal Procurement Policy on Jan. 15 and will cover October through December.

The 1998 Travel and Transportation Reform Act requires federal employees to use government charge cards, instead of personal credit cards, for travel expenses. Purchase cards allow officials to charge up to $2,500 without going through the paperwork required for major acquisitions. In fiscal 2001, Defense Department employees put $6.1 billion on purchase cards and another $3.4 billion on travel cards.

The OMB memo builds on an April 2002 directive from Daniels that told agencies to develop and implement plans to reduce fraud, misuse and abuse in their purchase and travel card programs. Those plans were due to OMB on June 1.

In the memo, Daniels described the success of some agencies in revamping their purchase and travel card programs. He pointed to wage garnishments and 400,000 account closures at the Defense Department, the government's worst offender, according to lawmakers. Daniels also praised Defense and a few other agencies for reducing delinquent accounts. But despite these success stories, agencies have not made enough progress in stanching abuse governmentwide, Daniels said.

"Despite these gains, progress is uneven and isolated," the director wrote. "All agencies should be implementing these types of remedial actions."

OMB has formed an interagency task force to identify best practices for reducing charge card abuse and fraud. Its full recommendations are pending. The group pointed out some effective initiatives at the Defense and Education departments to reduce charge card abuse, including data-mining for suspect transactions, more account reviews and blocking cardholders' access to certain merchants.

"Agencies should continue to take disciplinary actions and make appropriate civil and criminal referrals for employees who violate the public trust," Daniels said. "We will monitor agencies' progress as the 2004 budget is constructed."

At a recent hearing a House lawmaker asked the General Accounting Office to investigate vendor fraud in the federal purchase and travel card programs.