Short Take: GSA Releases Audit Report of its Purchase Card Program
October 11, 2016
The General Services Administration (GSA) performed a routine annual audit of its Government Purchase Card (GPC) program, analyzing transactions from Fiscal Year 2015 (FY15). Under the GPC program, cardholders procured $27.5 million worth of goods and services for GSA in FY15, down nearly 8 percent from the previous year’s use. Overall card use has decreased every year since 2011, when GSA card purchases totaled $69.3 million.
The audit identified several vulnerabilities in the program. GSA purchase cards have a per-transaction limit of $3000.00, so they are often issued to lower level employees who do not necessarily have adequate oversight and supervision. For each card purchase, cardholders under GSA’s system are required to upload three pieces of documentation: an order form or authorization; an invoice or receipt; and an independent receipt or document indicating that the procured good or service was accepted. GSA found that these steps were not being consistently taken; in a random sample size of 35 transactions, 23, or two-thirds, lacked the required documentation. The auditors followed up to determine if GSA had the documentation and did not upload it, but this only resolved the errors for 6 of the transactions—still leaving nearly half unsubstantiated.
Further, the audit found that split transactions remain a challenge in the GPC program. FAR 13.003(c)(2) prevents “transaction splitting,” which occurs when a GPC cardholder divides what should be a single transaction into multiple purchases in order to stay under the agency’s stated limit, or the FAR’s micro-purchase threshold; transactions above the applicable threshold must be procured through means other than GPCs. For instance, the government might decide to procure new office furniture totaling $5,000.00. Purchase splitting occurs where such a transaction is split into two charges—in this case, each at $3000.00 or under—where normally the purchase would be made in a single transaction. The audit found, generally, that GSA did not have adequate controls in place to identify split transactions. While the GSA’s guidelines notify cardholders of the prohibition on purchase splitting, the audit noted that some Approving Officials were not consistently reviewing transactions to look for split purchases, and that there is no tool in GSA’s current software to help flag potential split purchases.
While the GPC program can provide a convenient and flexible way to fulfill small, routine requirements, the scope of the program, and the small dollar value of the individual transactions, means that it is vulnerable to abuse by cardholders, whether intentional or otherwise. Audit reports such as this one provide meaningful information for all federal agencies to examine their own vulnerabilities and further the goal of procurement integrity.
Carrie Willett is responsible for the contents of this Short Take.
© 2016 Jackson Kelly PLLC