Treasury Inspector General for Tax Administration
November 2, 2011
TIGTA - 2011-76
Contact: Karen Kraushaar
WASHINGTON -- The Internal Revenue Service (IRS) needs to improve its oversight of fleet credit cards used by its Small Business/Self-Employed (SB/SE) Division.
That is the conclusion of a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA). The report is one in a series of audits planned to assess how the IRS manages its credit card usage.
The credit cards, known as fleet cards, are used by SB/SE employees who use Governmentleased vehicles to visit retail and wholesale fuel facilities to enforce fuel excise tax laws. TIGTA assessed the SB/SE Division Fleet Card Program to determine whether the IRS has established effective controls and whether those controls are sufficient to identify and prevent errors and instances of waste, fraud, and abuse.
TIGTA found that the Fleet Card Program lacks sufficient management oversight and internal controls. TIGTA established that in some cases, reconciliation and certification of the monthly Citibank statements were not conducted in accordance with procedures. TIGTA reviewed a sample of monthly statements and found instances of no managerial approval, no employee certification of charges, and missing receipts.
Finally, from October 1, 2001 until July 28, 2010, the Fleet Card Program did not have approval by the Secretary of the Treasury for home-to-work authority but employees used its fleet vehicles for that purpose. As a result, inappropriate charges were placed on fleet cards. Without adequate internal controls, IRS management cannot be assured that the fuel and repair charges are incurred only for official purposes. Consequently, this increases the risk of paying for inappropriate vehicle expenses.
Although TIGTA did not identify specific transactions indicative of waste, fraud, or abuse, the audit determined that the SB/SE Division did not retain adequate documentation to justify that all transactions charged to the fleet cards during the audit period were appropriate and legitimate.
“It is imperative that the IRS ensure that purchases made by its employees using Governmentissued credit cards are solely for Government use,” said J. Russell George, Treasury Inspector General for Tax Administration.
TIGTA recommended that the Commissioner, SB/SE Division, develop and implement formal fleet card policies, procedures, and management controls that comply with the Office of Management and Budget (OMB) and other Federal requirements.
IRS management agreed with this recommendation. SB/SE Specialty Tax Program staff plan to develop formal fleet card policies, procedures, and management controls to enhance procedures not covered in the interim guidance and to ensure compliance with OMB standards.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA’s internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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