Purchase Cards:

Control Weaknesses Leave Army Vulnerable to Fraud, Waste, and Abuse

GAO-02-732: Published: Jun 27, 2002. Publicly Released: Jul 17, 2002.

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The Army's purchase card program--the largest within the Defense Department--offers significant benefits, but weak internal controls have left the Army vulnerable to fraudulent, improper, and abusive purchases. The Army has yet to issue servicewide regulations or operating procedures, instead relying on ad hoc memoranda and other informal guidance. The Army also does a poor job of overseeing the purchase card program. The Army lacks the infrastructure--guidance and human capital--needed for effective program oversight. GAO identified several improper transactions involving clothing, food, and other items. GAO also identified improper purchases in which cardholders made a large number of purchases of similar items to circumvent the mandated limit of $2,500 for a single purchase.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Under Secretary of Defense (Comptroller) should direct the Charge Card Task Force to assess the above recommendations, and to the extent applicable, incorporate them into its recommendations to improve purchase card policies and procedures throughout DOD.

    Agency Affected: Department of Defense

    Status: Closed - Implemented

    Comments: DOD incorporated the recommendations in our Army purchase card report in the Department of Defense Charge Card Task Force Status Report dated December 18, 2002, which is referred to within DOD as Management Initiative Decision (MID) 904. In addition, DOD established a Senior Steering Group charged with ensuring successful implementation of MID 904 and created an Integrated Product Team (IPT) to create solutions based upon the Steering Group's strategic direction. GAO staff participated in the March 21, 2003 IPT meetings and confirmed that DOD charge card corrective actions were planned or underway to address all GAO credit card report recommendations.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army and other Army (Procurement) officials as appropriate to improve the overall Army purchase card infrastructure by requiring reviews of existing cardholders and their monthly spending limits to help ensure that only those individuals with valid continuing purchasing requirements possess cards and that the monthly spending limits are appropriate for the expected purchasing activity. These reviews should result in canceling unneeded cards Army-wide and especially at Fort Hood where a significant problem was found.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: The Army issued Draft Government Purchase Card (GPC) Army Regulation (AR)715-xx covering the use and management of the Army's purchase card program with an effective date of December 6, 2005. The Deputy Assistant Secretary of the Army (Policy and Procurement) stated in the policy transmittal letter that compliance with GPC AR 715-xx is mandatory and supersedes the previous guidance dated July 31, 2002. To assess ongoing need for purchase cards, GPC AR 715-xx requires that the Activity/Organization Program Coordinator (A/OPC) is responsible for implementing, administering, and monitoring the purchase card programs at the installations and perform an annual review of an approving official's cardholder accounts to determine a cardholder's continuing need to maintain an account. Further, GPC AR 715-xx requires approving officials to notify the A/OPC to close any cardholder accounts for individuals who have transferred, terminated, or who are in "absent without leave" status, retired or have otherwise no further use of the purchase card. To address spending limits, GPC AR 715-xx requires the A/OPC, in coordination with the approving official, to set and maintain each cardholder's spending limits and merchant codes on a reasonable estimation of the cardholder's needs to buy as part of the activity mission and function. In addition, GPC AR 715-xx requires the A/OPC, in coordination with the approving official, to set single purchase limits and monthly limits that are commensurate with the buying history of the activity or organization. Further, the Army has reduced the number of purchase cards from 101,398 in fiscal year 2002 to 55,611 in May 2006.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by developing performance measures and goals to assess the adequacy of internal control activities and the oversight program.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP includes a listing of reports that are available and should be used by the program coordinators in assessing the adequacy of internal controls activities and the oversight program. It also lists seven additional metrics that should be collected and maintained to assess the adequacy of the program.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by developing and implementing a program oversight system for program coordinators that includes standard activities and analytical tools to be used in evaluating program results.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP includes a section that discusses surveillance and oversight of the program. The SOP establishes the oversight activities that are to be carried out by the program coordinators and the billing officials. Also, Appendix E provides review guidelines and checklists that can be used in program surveillance.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by assessing the adequacy of human capital resources devoted to the purchase card program, especially for oversight activities, at each management level, and provide needed resources.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP establishes a management chain of command for the purchase card program. It provides that (1) Principal Assistants for Contracting are to ensure that adequate resources are dedicated to the purchase card program within their agency/organization and (2) Chief of Contracting Offices are to ensure that adequate resources are dedicated to the program at the installation activity. It provides for semi-annual reports by program coordinators at the major commands and for installation program coordinators to annually inspect 100 percent of billing official accounts.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by helping ensure that program coordinators and approving officials have the needed authority, including grade level, to serve as the first line of defense against purchase card fraud, waste, and abuse by issuing a policy directive that specifically addresses their positions, roles, and job descriptions. Policies should also be established that hold these officials accountable for their purchase card program duties through performance expectations and evaluations.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP establishes a management chain of command for the purchase card program and specifically addresses the roles and responsibilities of program coordinators and billing officials. It provides for semi-annual reports by program coordinators at the major commands and for installation program coordinators to annually inspect 100 percent of billing official accounts.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by addressing key control environment issues in Army-wide standard operating procedures. At a minimum, the procedure should include appropriate cardholder spending limits.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP provides that the program coordinator, in coordination with the resource manager and the billing official, shall set each cardholder's spending limit and that both the single purchase limit and the monthly limit should be set at a level that is commensurate with the buying history of the activity or organization. The SOP also cites cardholder limits as an area to be included in approving officials' surveillance checklists.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by addressing key control environment issues in Army-wide standard operating procedures. At a minimum, the procedure should include span of control of the approving official.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP addresses span of control at the different levels of the purchase card program. It established 300 accounts as the standard span of control for the level 4 program coordinator and 7 cardholders as the standard span of control for a billing official. The SOP discusses specific actions when the standards are not met.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by addressing key control environment issues in Army-wide standard operating procedures. At a minimum, the procedure should include cancellation of cards when a cardholder leaves the Army, is reassigned, or no longer has a valid need for the card.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. In several sections the SOP addresses cancellation of cards when a cardholder no longer has a valid need for the card. The billing official and cardholder are responsible for notifying the program coordinator when cards should be canceled. In addition, the need to cancel accounts is addressed during the annual review of all billing official accounts.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by addressing key control environment issues in Army-wide standard operating procedures. At a minimum, the procedure should include controls over the issuance and assessment of ongoing need for cards.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued Standard Operating Procedures (SOP) covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. In several sections the SOP addresses controls over the issuance and ongoing need for cards. It addresses such controls at the time accounts are established and provides for at least an annual determination of continuing need.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by directing the implementation of specific internal control activities for the purchase card program in an Army-wide standard operating procedure. Although a wide range of diverse activities can contribute to a system that provides reasonable assurances that purchases are correct and proper, at a minimum, the procedure should include advance approval of purchases, including blanket approval for routine, low dollar purchases.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. Appendix D of the SOP lists prohibited items and items requiring pre-purchase approval. In addition, the SOP provides that cardholders should obtain pre-purchase approval and documentation for requirements that appear to be outside of normal needs of the requesting organization.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by directing the implementation of specific internal control activities for the purchase card program in an Army-wide standard operating procedure. Although a wide range of diverse activities can contribute to a system that provides reasonable assurance that purchases are correct and proper, at a minimum, the procedure should include independent receiving and acceptance of goods and services.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued its Government Purchase Card Standard Operating Procedure, which included requirements that (1) cardholders document property items and services acquired with a purchase card in their purchase card log, (2) billing officials review the purchase log and notify the property book officer of all property acquired, and (3) annual surveillance reviews ascertain whether (a) cardholders have entered all purchases in their purchase log and (b) billing officials have coordinated with property book officers to verify that all purchases of accountable property have been properly documented. In addition, the Standard Operating Procedures state that abuse or repeated non-compliance with property accountability procedures will be grounds to suspend a purchase card account until appropriate corrective actions are taken.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army (Procurement) should direct the Deputy Assistant Secretary of the Army and other Army officials as appropriate to improve the overall Army purchase card infrastructure to direct the implementation of specific internal control activities for the purchase card program in an Army-wide standard operating procedure. Although a wide rang e of diverse activities can contribute to a system that provides reasonable assurances that purchases are correct and proper, at a minimum, the procedure should include independent review by an approving official of the cardholder's monthly statements and supporting documentation.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP states that the billing official is responsible for (1) reviewing assigned cardholders' statements, (2) verifying all transactions were necessary government purchases in accordance with policies and guidance, and (3) retaining a copy of the billing statement and maintaining all original supporting documentation (e.g., receipts, logs, invoices, delivery orders, and approvals, etc.).

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by developing and implementing an Army-wide data mining, analysis, and investigation function to supplement other oversight activities. This function should include providing oversight results and alerts to major command and installations when warranted.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: In its June 2002 response to draft report, DOD concurred with this recommendation and stated that the DOD Inspector General had initiated a DOD data-mining program that will evaluate Army and other defense component card transactions. The response further notes that the Army will work closely with the data-mining group to ensure Army activities are quickly alerted to identify transactions and effective actions are taken. We are working with DOD officials to enhance DOD capability to use data mining as one means to improve oversight of purchase card transactions and deter fraudulent transactions. The results of the initial data-mining effort are expected to be available later in calendar year 2002.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by developing an Army-wide database on known fraud cases that can be used to identify potential deficiencies in existing internal control and to develop and implement additional control activities, if warranted or justified.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: The Army Audit Agency has partnered with the DOD Inspector General (IG) to establish a fraud database and data mining capability for purchase card oversight and detection of potentially fraudulent, abusive, and improper purchase card transactions. The DOD IG established a Data Mining Division with personnel from Army Audit Agency and other DOD audit activities in January 2003. GAO confirmed with DOD IG Data Mining Division personnel that the Army is actively working with the IG staff by providing input to the credit card database and conducting audits of problem transaction activity detected in the IG's data mining effort.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by analyzing the procurements of continuing requirements through micropurchases and requiring the use of appropriate contracting processes to help ensure that such purchases are acquired at best prices.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: In response to our recommendation, the Army awarded several Blanket Purchase Agreements (BPA) for office supplies to improve purchasing power for continuing requirements of these items and to ensure compliance with statutory requirements to purchase comparable products available from mandatory sources. In a memorandum dated September 13, 2004, the Deputy Assistant Secretary of the Army (Policy and Procurement) directed that purchases of office supplies be made against the BPA. In addition, on December 6, 2005, the Army issued Draft Government Purchase Card (GPC) Army Regulation (AR) 715-xx covering the use and management of the Army's purchase card program. In the transmittal memorandum on the draft policy, the Deputy Assistant Secretary of the Army (Policy and Procurement) stated that compliance with GPC AR 715-xx is mandatory and supersedes the previous guidance. Draft GPC AR 715-xx explicitly prohibits requirements to be split into smaller component parts to avoid formal contracting procedures and requires cardholders to comply with federal laws and regulations establishing mandatory sources of supplies and services. Further, in a memorandum dated December 13, 2005, the Deputy Assistant Secretary of the Army (Policy and Procurement) requires Army contracting offices to fully leverage purchasing volume in the marketplace by using General Services Administration Federal Supply Schedule contracts and requires cardholders to inquire about and obtain customary trade discounts when using the purchase card.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by requiring additional prior documented justification and approval of those planned purchases that are "questionable"--that fall outside the normal procurements of the cardholder in terms of either dollar amount or type of purchase.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP discusses the need for special approvals. It notes that some purchases are clearly permitted, others are obviously prohibited, and others fall within gray areas. It includes an appendix on general rules to be used in determining whether a particular buy is appropriate. It further notes that cardholders should obtain pre-purchase approval and documentation for requirements that appear to be outside of normal needs of the requesting organization.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by requiring the development and implementation of coordination and reporting procedures to help ensure that accountable property bought with the purchase card is brought under appropriate control.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP provides that major command specific procedures are to be developed to ensure that accountable property purchased with the card is brought under appropriate control and adds that procedures should emphasize documentation subsequent to purchase. Also, installation program coordinators and property book officers are to provide installation specific guidance. Furthermore, property book officers are to assist in reviews of billing officials/cardholders to ensure that property accountability procedures are followed.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by reiterating records retention policy for purchase card transaction files and require that compliance with record retention policy by assessed during the program coordinator's annual review of each approving official.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP states that, in accordance with DOD FMR, Volume 1, certified billing statements and supporting documents will be retained for 6 years and 3 months after final payment and cardholder statement can be disposed of 3 years after final payment. In Appendix E of the SOP, guidelines and checklists discuss records being in good shape and easy to track billings with purchases and billing officials maintaining original supporting documents.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure by developing and implementing procedures and checklists for approving officials to use in the monthly review of cardholders' transactions. These procedures and checklists should specifiy the type and extent of review that is expected and the required review documentation.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP identifies 13 responsibilities for the billing official, including key control activities discussed in our report, but states that the official's responsibilities are not limited to these 13 items. The identified responsibilities include (1) reviewing assigned cardholder's statements, (2) verifying that all transactions were necessary purchases in accordance with policies and procedures, (3) retaining a copy of the billing statement, and (4) maintaining all original supporting documentation, including receipts, logs, invoices, delivery orders, and approvals. The Army's SOP also includes a surveillance review checklist for confirmation of 20 billing official requirements, including additional requirements related to convenience checks and approving official span of control.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure to direct the implementation of specific internal control activities for the purchase card program in an Army-wide standard operating procedure. Although a wide range of diverse activities can contribute to a system that provides reasonable assurances that purchases are correct and proper, at a minimum, the procedure should include cardholders obtaining and retaining invoices that support their purchases and provide the basis for reconciling cardholder statements.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP states that the cardholder's responsibility include (1) maintaining receipts and other supporting documentation, (2) reviewing and reconciling all transactions and approved statements, and (3) resolving invalid transactions with vendors and disputing unresolved invalid transactions.

    Recommendation: To strengthen the overall control environment and improve internal control for the Army's purchase card program, the Secretary of the Army should direct the Deputy Assistant Secretary of the Army (Procurement) and other Army officials as appropriate to improve the overall Army purchase card infrastructure to direct the implementation of specific internal control activities for the purchase card program in an Army-wide standard operating procedure. Although a wide range of diverse activities can contribute to a system that provides reasonable assurances that purchases are correct and proper, at a minimum, the procedure should include an approving official reconciling the charges on the monthly statement with invoices and other supporting documentation and forwarding the reconciled statement to the designated disbursing office for payment as required by governmentwide and DOD regulations.

    Agency Affected: Department of Defense: Department of the Army

    Status: Closed - Implemented

    Comments: On July 31, 2002, the Army issued a SOP covering the use and management of the Army's purchase card program. The covering memorandum for the SOP notes that the document consolidates existing guidance and policy and is a comprehensive document that identifies processes and procedures, establishes standards, and strengthens controls over the purchase card program. The SOP states that the billing official is responsible for (1) reviewing assigned cardholders' statements, (2) verifying all transactions were necessary government purchases in accordance with policies and guidance, and (3) certifying and forwarding, to the paying office for payment, the official invoice. The SOP requires that billing officials certify the statement for payment within 5 working days of the statement date.

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