Moderate Risk Identified in HUD's Fiscal Years 2017-2018 Purchase Card Program Risk Assessment

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, has completed its annual risk assessment of HUD’s purchase cards as required by the Government Charge Card Abuse Prevention Act of 2012 (Public Law 112-194) and Office of Management and Budget Memorandum M-13-21. Our objective was to identify and analyze risks of illegal, improper, or erroneous purchases and payments in HUD’s fiscal years 2017 and 2018 purchase card program. We found that a moderate risk was associated with HUD’s purchase card program. HUD’s purchase card program had a moderate risk of susceptibility to illegal, improper, or erroneous purchases. Risk-increasing factors included a prior audit recommendation not fully implemented, purchase card use by cardholders not identified as active or closed, cardholders and noncardholders late on meeting their 3-year training requirements, cardholders missing from the training records, potential split purchases, purchases at agency-restricted merchants, sales tax paid on purchases, interest paid on payments, and supporting documentation missing or not provided. Risk-decreasing factors included no open purchase card recommendations, a decrease in purchase card use from fiscal year 2016, and the discontinued use of the purchase card in the REAC Reverse Auction Program. This memorandum does not contain recommendations. We will use the risk assessment to determine the scope, frequency, and number of periodic audits or reviews of the purchase card program.