GAO, Hill grill Navy over purchase card use

GAO, Hill grill Navy over purchase card use

By Dawn S. Onley

GCN Staff


JULY 31—The Navy defended its employee purchase cards yesterday at a House hearing, calling them a vital acquisition tool that speeds up buys.

The Navy's stance came on the heels of a General Accounting Office report, also issued yesterday, that found that a lack of internal controls and monitors at two San Diego Navy commands made the agency vulnerable to 'fraudulent, improper and abusive purchases.'

This vulnerability, GAO said, resulted in several instances of Navy personnel using the cards to purchase flat-panel monitors, home computers, notebook PCs, personal digital assistants and DVD players among other alleged fraudulent or improper purchases.

But the Navy argued that flat-panel monitors, although more costly than regular monitors, are needed to preserve space on board ships. In addition, Navy officials said the purchase cards save time.

'They save money on the whole acquisition process. This eliminates having to put out a purchase order,' said Lt. Doug Spencer, a Navy spokesman.

GAO reviewed 50,000 card transactions at the Space and Naval Warfare Systems Command's Systems Center and the Navy Public Works Center and found numerous cases of fraud, said the report, Purchase Cards: Control Weaknesses Leave Two Navy Units Vulnerable to Fraud and Abuse.

Out of 50,000 transactions, 69 were suspicious, said Capt. Ernest Valdes, commanding officer of the SPAWAR center. And, of the 69, nine were found to be either a misuse of the cards or possible fraud.

The nine questionable transactions accounted for $2,100 in purchases, Spencer said. The number is minuscule and doesn't indicate a problem on the rise, Navy officials said.

GAO said it would trust in the Navy's response that it would use an automated tool to monitor card acquisitions and to better control card use.

Rep. Steve Horn (R-Calif.), chairman of the House Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations, held the hearing. He asked that GAO expand its investigation of purchase cards to include other Defense Department agencies and report back to the subcommittee in three months.

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