REVIEW OF THE
INTERNAL REVENUE SERVICE’S PURCHASE CARD VIOLATIONS REPORT AND
THE STATUS OF GOVERNMENT CHARGE CARD RECOMMENDATIONS
Final Report issued on January 14, 2016
Highlights of Reference Number: 2016-10-013 to the Internal Revenue Service Deputy Commissioner for Operations Support.
IMPACT ON TAXPAYERS
Federal audits of agency charge card programs have found varying degrees of fraud, waste, and abuse. On October 5, 2012, the President signed into law the Government Charge Card Abuse Prevention Act of 2012 (Charge Card Act), which reinforced Administration and congressional efforts to prevent fraud, waste, and abuse of Governmentwide charge card programs.
WHY TIGTA DID THE AUDIT
This audit was initiated because the Charge Card Act requires each agency with more than $10 million in purchase card spending in the prior fiscal year to submit semiannual reports of employee purchase card violations and the disposition of those violations, including any disciplinary actions taken. Inspectors General must annually report to the Director of the Office of Management and Budget 120 days after the end of each fiscal year on agency progress in implementing purchase and travel card audit recommendations. The overall objective of this review was to assess the IRS’s implementation of and compliance with the law’s requirements for the period April 1 through September 30, 2015.
WHAT TIGTA FOUND
The IRS properly identified and reported 13 instances of confirmed purchase card misuse and two instances of purchase card misuse pending final agency action. TIGTA’s independent review found one additional instance of potential purchase card fraud and four additional instances of purchase card misuse pending investigation or final agency action. The 13 confirmed purchase card misuse cases reported by the IRS collectively totaled almost $600. The potential purchase card fraud case involving the purchase of two electronic tablets and 37 other items for personal cardholder use totaled almost $2,350.
TIGTA also reviewed the IRS’s current charge card guidance and determined that policies and controls have been established and designed to mitigate the risk of fraud and inappropriate Government travel and purchase card practices, including controls that address centrally billed travel card accounts. In the Fiscal Year 2015 annual assurance statement under the Federal Managers’ Financial Integrity Act of 1982, the IRS attests that these polices and controls are in place.
TIGTA also reviewed the status of the 28 recommendations issued in audit reports related to IRS purchase and travel cards issued over the past five fiscal years (Fiscal Years 2011 to 2015). TIGTA identified one recommendation from a prior TIGTA report issued in April 2013 that has not been implemented. TIGTA recommended that the IRS develop and implement a policy in which cardholders with evidence of significant personal financial problems associated with charge card misuse (including suspended accounts, issuance of insufficient funds checks, and charged-off accounts) are referred to the IRS Human Capital Officer for a reevaluation of background investigations, security clearances, and suitability for employment. The IRS has developed a policy framework to implement this recommendation, but has not yet created a final policy due to what it believes to be collective bargaining obligations.
WHAT TIGTA RECOMMENDED
TIGTA made no recommendations as a result of the work performed during this review. However, key IRS officials reviewed this report prior to its issuance and agreed with the facts presented.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to:
Phone Number / 202-622-6500
E-mail Address / TIGTACommunications@tigta.treas.gov
Website / https://www.treasury.gov/tigta