(Washington, DC) Officials from the DC Office of the Chief Financial Officer (OCFO) testified today before the Council of the District of Columbia regarding the audit of the purchase card program administered by the DC Office of Contracting and Procurement (OCP).
The audit uncovered that purchase cards were used to acquire prohibited items such as gasoline, clothing, and food; there was a lack of adequate documentation to support purchases; approving officials did not carefully review and approve cardholder transactions; and cardholders were splitting purchases to avoid single purchase limitations. The audit also found agency finance officials did not enforce the “chase” element of the “pay and chase” policy, which required bills to be paid immediately, without supporting documentation, and cardholders and approving officials were to supply the documentation later. Also revealed was that OCP did not maintain a current listing of all cardholders nor did it adequately monitor purchase card activities; and that there were poor controls in canceling purchase cards after an employee left District government or was transferred to another agency.
Despite the purchase card program weaknesses, Chief Financial Officer Natwar M. Gandhi noted that, if administered properly, the purchase card program is an efficient way for the government to purchase small procurements timely. It reduces the tedious buying process, improves vendor payment processing, and will eventually reduce labor and administrative costs. Gandhi commended the OCFO’s Office of Integrity and Oversight for their timely review of the program, which was done with in-house resources and conducted from June through September. He also thanked Deputy Mayor for Operations Herbert Tillery for his leadership in the purchase card program and vowed to work with key stakeholders to improve the purchase card program.
Recommendations for improvements include strong disciplinary action against cardholders and approving officials who abuse or misuse their cards up to and including termination; finance officials should obtain all pertinent documentation from cardholders and approving officials prior to paying bills; and approving officials should review and approve purchases by signing the monthly bank statements. Also, OCP should work with US Bank, the financial institution that issues the cards and processes the charges, to implement their computer system capability known as Customer Service Automation Reporting Environment (CARE). CARE, which can be implemented at no cost to the District government, can be customized to prevent and report questionable transactions such as split purchases or purchases over authorized limitations.
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