Risk Assessments of HUD's Charge Card Programs

As required by the Charge Card Abuse Prevention Act of 2012, Public Law 112-194, we performed risk assessments of the U.S. Department of Housing and Urban Development’s (HUD) purchase and travel card programs. In our risk assessments, we analyzed and identified the risks of illegal, improper, or erroneous purchases. Using information provided by HUD, we assessed risk for eight different risk factors and ranked each risk factor as low, medium, or high, based on predetermined criteria. We determined that the overall risk for both programs was low and at this time, an audit is not warranted. However, we did identify areas of medium risk in which HUD could make improvements to strengthen its charge card controls related to three risk factors for the purchase card assessment and one risk factor for the travel card assessment. The risks in both programs centered around weaknesses in procedures and monitoring. Specifically, in the purchase card program, the Office of the Chief Procurement Officer (OCPO) used and relied on an outdated policy implementation guide that did not reflect OCPO’s current processes and lacked standard operating procedures outlining the specific steps taken to execute the controls. Further, the monthly monitoring review process did not always ensure that potential improper use transactions were cleared with adequate documentation. In the travel card program, HUD program offices did not always follow up on potentially improper transactions identified by the Office of the Chief Financial Officer (OCFO) in a timely manner, and OCFO lacked the authority to act when reviews were untimely. We also noted that HUD did not sufficiently monitor for employees who did not use their government travel card when required for official travel-related purchases. To improve its processes and oversight for the purchase card and travel card programs, we made recommendations to develop and implement policies and procedures in the areas that we assessed as medium risk. While we assessed risks of illegal, improper, or erroneous purchases as low in both charge card programs, implementation of these recommendations will enhance and further strengthen HUD’s controls and oversight activities in this area.