oversight

Government Charge Card Abuse Prevention Act FY18 Letter to OMB

Published by the Denali Commission, Office of Inspector General on 2018-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

January 25, 2018

The Honorable Mick Mulvaney
Director
c/o Stannis Smith
Office of Management and Budget
725 17th Street NW
Washington, DC 20503

Dear Mr. Mulvaney:

The Government Charge Card Abuse Prevention Act of 2012 (Charge Card Act) and Office of
Management and Budget’s (OMB’s) implementing guidance require each office of inspector
general (OIG) to perform periodic risk assessments of agency purchase card and travel card
programs to identify and analyze the risks of illegal, improper, or erroneous purchases and
payments. Where annual travel card spending for an agency exceeds $10 million, the Charge
Card Act and OMB M-13-21 require periodic audits or reviews of the agency’s travel card
program. OIGs must also submit an annual purchase and travel card audit recommendation
status report to OMB. Below is a summary of the actions we have taken during fiscal year (FY)
2017 to fulfill these requirements, as well as additional information on our related work.

We conducted a risk assessment of the Denali Commission’s (the Commission’s) purchase and
travel card program to assess the risks of illegal, improper, or erroneous purchases and
payments associated with the Commission’s purchase and travel card program. We reviewed
the annual amount of purchase and travel card spending during FY 2017, the number of
cardholders, internal control processes and procedures, and the results of prior reviews and
audits.

For FY 2017, the Commission reported there were two purchase cardholders with
expenditures totaling $88,183, and 14 travel cardholders with expenditures totaling $130,330.
The Commission did not meet the threshold of $10 million in purchase card spending and,
consequently, we were not required to submit semiannual reports to OMB regarding purchase
card violations. Further, because travel card expenditures for FY 2017 were significantly less
than the $10 million threshold, an audit of the travel card program is not required.

We completed an audit1 of the Commission’s purchase card program and issued our report in
September 2016, in which we made four recommendations to strengthen internal control in
the Commission’s purchase card program. During FY 2017, the Commission implemented and
closed the four recommendations (see enclosure). As of the end of FY 2017, the Commission
has no unimplemented or unresolved recommendations related to purchase and travel cards;
therefore, an audit recommendation status report to OMB is not required.


1
 Denali Commission Office of Inspector General, September 28, 2016. Improvements Are Needed in the Denali
Commission Government Purchase Card Program, DCOIG-16-008-A. Anchorage, AK: Denali OIG.
Based on the audit work completed in FY 2017, implementation of recommendations, and
relatively low volume of purchases and low number of cardholders, we concluded that the risk
of illegal, improper, or erroneous purchases and payments through the Commission’s purchase
and travel card programs during FY 2017 was low. Nevertheless, in an effort to provide routine
oversight of administrative operation, we initiated an audit of the Commission’s use of
government travel cards in March 2017.

Work related to that government travel card audit is still ongoing. However, we believe that
additional reviews or audits of the Commission’s use of the government purchase card during
FY 2018 are not warranted.

If you have any questions, please contact me at (202) 482-3884.

Sincerely,



Mark H. Zabarsky
Principal Assistant Inspector General for Audit and Evaluation
U.S. Department of Commerce
Office of Inspector General

Enclosure




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Enclosure.
Status of Government Purchase Card Audit Recommendations

 Card Type                              Recommendation                               Status
                 1. We recommend that the Commission strengthen internal
                    control in its purchase card program by updating internal
 Purchase           guidance to better reflect federal requirements with regard to
                                                                                     Closed
                    purchase card transactions and documentation and
                    emphasizing the importance of following guidance when
                    making purchases.
                 2. We recommend that the Commission strengthen internal
                    control in its purchase card program by removing access to
 Purchase                                                                            Closed
                    the online purchase card management system from staff no
                    longer employed by the Denali Commission.
                 3. We recommend that the Commission strengthen internal
                    control in its purchase card program by including a procedure
 Purchase                                                                            Closed
                    during the off-boarding process to verify any access to the
                    online purchase card management system is removed.
                 4. We recommend that the Commission strengthen internal
                    control in its purchase card program by updating the purchase
 Purchase           card merchant category code template to reduce risk and          Closed
                    revising the allowed merchant category codes for current
                    cardholders.
Source: Denali Commission OIG Report No. DCOIG-008-A




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