DOT Needs To Enhance Oversight of Its Purchase Card Program To Mitigate Internal Control Weaknesses

What We Looked At According to U.S. Bank, Department of Transportation (DOT) employees made more than 327,000 purchase card transactions—totaling $223.7 million—from October 2016 through March 2018. In 2013, we reported several internal control weaknesses in the Department’s purchase card program, such as lack of prior approval or funding certification for purchases; use of cards by individuals other than cardholders; split purchases to circumvent single purchase limits; payments of incorrect amounts; and purchases of items not included in purchase requests. In addition, our annual charge card risk assessments disclosed areas that constitute risk to the Department’s charge card program such as purchase cardholders (PCH) not meeting training requirements and using their DOT-issued purchase cards to commit acts of fraud. As a result, we determined that another audit of this program was needed. Our objectives were to (1) test existing controls to determine if they provide reasonable assurance that improper purchases are prevented or detected in the normal course of business and (2) evaluate DOT’s policies and procedures for oversight of its purchase card program. We looked at purchase card program policies and procedures and supporting documentation for purchases.   What We Found We identified internal control weaknesses in multiple areas of the purchase card program. The weaknesses show that PCHs are not consistently following existing controls to prevent improper purchases, putting the Department’s purchase card program at increased risk of misuse and abuse. Specifically, based on our findings for 44 of the 109 purchase card transactions in our sample, PCHs did not always follow prescribed controls for an estimated $86.1 million in purchases. Furthermore, we found that employees did not always use proper purchase request channels, thus putting DOT at risk for Anti-Deficiency Act violations. We also found that DOT’s policies and procedures for overseeing the purchase card program are not sufficient. For example, DOT does not review individual Operating Administrations’ purchase card guidance for compliance with the Transportation Acquisition Manual.   Recommendations We made 13 recommendations to assist DOT in improving its oversight of the purchase card program and increasing the effectiveness of its internal controls. DOT fully concurred with 10 recommendations and partially concurred with 3.