Widespread abuse of government credit cards

Laser eye surgery may improve one’s visual horizons, but it doesn’t qualify as a travel expense, a congressional office says in a report on abuses of the federal travel card system.

The Congressional Research Service, in a recent survey, found that federal employees in a wide range of agencies misuse travel cards to buy goods for their personal use, travel first-class or simply bilk the government.

Among the examples: a Federal Aviation Administration employee who charged $3,700 for laser eye surgery; a Pentagon employee who received reimbursements for 13 airline tickets totaling almost $10,000 that he never purchased; and a State Department employee who took an unauthorized trip to Hawaii on a first-class ticket.

Auditors had also determined that certain agencies have not collected reimbursement for millions of dollars worth of unused airline tickets and had repeatedly failed to pay travel card invoices in a timely manner, according to the report.

"A private travel agency would be out of business running this kind of operation," said Scott Amey, general counsel of the independent Project on Government Oversight. He said the CRS report points out the need for immediate improvements, including better oversight of all transactions and increased penalties for misuse.

A 1998 law requires any federal employee who travels more than five times a year to use travel cards. The CRS said travel card spending increased from $4.39 billion in fiscal year 1999 to $8.28 billion in fiscal year 2008.

The report said one major problem is the failure of agencies to determine whether tickets have been used. It cited a Government Accountability Office study finding that over a seven-year period the Department of Defense may have purchased more than $100 million in airline tickets that were not used and had not been processed for refunds. Similarly, the State Department failed to seek reimbursement for $6 million in unused airline tickets over an 18-month period.

The report also referred to Office of Management and Budget data showing that the Pentagon had a delinquency rate on centrally billed travel card accounts of 20 percent. NASA’s delinquency rate was almost 16 percent. Federal agencies received about $187 million in rebates from card vendors in fiscal 2008, and failure to pay bills in a timely fashion prevented agencies from earning the maximum rebates.

Finally, the CRS said some agencies did a poor job of ensuring that premium-class accommodations were used only when justified. A 2003 audit by the GAO found that over a two-year period the Pentagon bought $123 million in premium-class tickets. Of that, $90 million were not authorized, not justified, or both.

The CRS report dealt only with travel cards. Federal agencies also use purchase cards for supplies and services and fleet cards for fuel and service of vehicles.

Congress has held several hearings on abuses in the chargecard system, and last week the Senate Homeland Security and Government Affairs Committee approved legislation requiring agencies to establish safeguards and controls for card systems and set penalties for violations.

"Agencies can’t continue to look the other way while employees are going on shopping sprees at the taxpayers’ expense," said Sen. Charles Grassley, R-Iowa, sponsor of the Senate bill. He said that among the fraudulent or questionable charge card tabs have been kitchen appliances, sapphire rings, gambling, cruises, gentlemen’s clubs and legalized brothels.

Rep. Joe Wilson, R-S.C., has a companion bill in the House.


The bills are S. 942 and H.R. 2189.


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