Federal Reports

The VA Office of Inspector General (OIG) substantiated an allegation that purchase cardholders at the VA St. Louis Health Care System (System) split purchases to install fire stops (building and fire protection features designed to minimize the effects of fire, smoke, and heat) at its facilities. The OIG found that out of 268 purchases made with a vendor in 2014 and 2015, purchase cardholders made 25 split purchases for the installation of fire stops valued at about $61,000. The OIG identified an additional 153 split purchases made with the same vendor for unrelated construction work valued at approximately $364,000. The OIG found that 211 of the 268 purchases also exceeded the $2,000 micro-purchase threshold for construction acquisitions. Of the 211 purchases that exceeded the micro-purchase threshold, 154 transactions were also split purchases. The value of the remaining 57 purchases exceeding the micro-purchase was approximately $139,000. In total, the OIG identified 235 purchases valued at about $564,000 that were unauthorized commitments and improper payments. The Federal Acquisition Regulation (FAR) requires project leaders to obtain competitive bids for purchases over a certain amount, but employees were following guidance from the System’s Accounting Department that was in direct conflict with FAR requirements and annual purchase card training. Because of these conflicts, System cardholders and approving officials did not have a clear understanding of what represented a split purchase. The OIG made three recommendations, including submitting ratification requests for the improper purchases, providing additional training on how to avoid split purchases and comply with micro-purchase thresholds, and establishing a rigorous monitoring mechanism to identify and prevent improper purchase card transactions.

The U.S. Postal Service operates one of the largest vehicle fleets in the U.S. In fiscal year (FY) 2017, the Postal Service used 205,997 vehicles, primarily to deliver and collect mail. Each of these Postal owned vehicles are issued a fleet card to pay for commercially purchased fuel, oil, and maintenance expenses up to $300. In addition to these cards, the Postal Service has fleet specialty cards. Fleet specialty cards are issued to each facility with assigned vehicles and to Vehicle Maintenance Facilities (VMF) to pay for maintenance or repairs over $300. The objective of our audit was to assess the effectiveness of controls over fleet specialty cards for delivery operations in the Pacific Area.

First Coast Service Options, Inc., did not claim $1.06 million of allowable Medicare Supplement Executive Retirement Plan costs for calendar years 2008 through 2010.

First Coast Service Options, Inc., claimed $43,835 of unallowable Medicare pension costs for calendar years 2008 through 2010.

The OIG investigated allegations that an oil and gas company irregularly reported oil sold in the Vernal, UT, area to avoid paying royalties. The Bureau of Land Management (BLM) also suspected that a BLM employee’s signature may have been forged on a document related to one of the company’s oil sales. Our joint investigation with the BLM’s Special Investigations Group did not substantiate either allegation. We found that the BLM had known about a measurement problem with an oil tank owned by the company since 2010 but took no action to resolve the discrepancy until 2016. The company that purchased oil from the tank also knew of the problem and used an alternative measurement method, so no royalty loss occurred. Finally, we found a BLM employee’s signature was not forged; instead, the employee’s name was written on a document to indicate the employee was present as a witness to a sale.