EPA Bureaucrats Use Federal Charge Cards for Gym Memberships and Gift Cards
A report released by the Environmental Protection Agency’s Inspector General has found that EPA employees have improperly used federal charge cards to purchase everything from gym memberships to gift cards. The report indicated that over 90 percent of the sampled transactions were for prohibited, improper, or erroneous purchases, all paid for by American taxpayers. Ironically, Senate Democrats Monday night carried on an all-night filibuster in the hopes of generating even more power and funding for the EPA.
In order to compile the report, the Office of the Inspector General obtained a spreadsheet of 67,000 EPA transactions from Fiscal Year (FY) 2012, and randomly selected 69 transactions. They additionally selected 11 transactions that seemed inappropriate because of the name of the merchant involved. For instance, some transactions were with merchants listed as dance halls, child care organizations, music venues and theatres. Of the 80 transactions sampled, 75 were for prohibited, improper, or erroneous purchases. The 80 transactions sampled totaled $152,602 and $79,254 (52%) of which were for prohibited, improper, or erroneous purchases.
The report outlined nine specific internal control oversight issues, ranging from the approval of prohibited transactions by EPA officials to the outright failure to maintain transaction records. Of the primary internal control oversight issues, four were particularly outrageous, and the report found that of the transactions sampled:
- 35% of cardholders did not verify the receipt of purchases;
- 30% of cardholders did not obtain required approval prior for purchases;
- 25% of cardholders did not obtain funding prior to purchases; and
- 18% of approving officials never reviewed purchase logs.
Some specific instances of EPA employee misconduct were so egregious they are worth mentioning. In three instances, cardholders purchased gym memberships totaling $2,867. Two of those purchases were not even for EPA employees but for family members. Cardholders further violated EPA guidelines regarding inappropriate food purchases:
“Although light refreshments are defined as those that do not include portions of food typical of a meal, in one of our samples, light refreshments included all elements of a meal for an awards ceremony. Four different appetizers, chicken tenderloin, fresh fruit, pasta salad, large cookies, soft drinks and punch were purchased at a cost of $2,900. Meals are not an allowable expense for an awards recognition ceremony.”
The report also found that the purchase of gift cards by EPA cardholders was also a problem in seven transactions. For example, in one transaction 20 American Express gift cards were purchased totaling $1,588. Additionally, the report highlighted an instance where EPA employees blatantly violated records keeping requirements in that:
“Two transactions totaling $26,152 could not be located despite instructions to maintain supporting documentation. The EPA’s policy requires the retention of documentation for 3 years on a fiscal year basis. Cardholders were not attentive to this basic requirement. In two cases, the cardholders left their positions and no arrangements were made to retain the records. In another transaction the cardholder stated that records were not kept because of privacy concerns. This lack of documentation increases the risk that purchases could be fraudulent, improper or abusive.”
It must also be pointed out that the report focused on only 80 transactions out of 67,000, ninety-two percent of which turned out to be prohibited or improper. For FY 2012, the EPA had "1,370 active cardholders that transacted more than $29 million in purchases." The EPA also had "309 convenience check writers who wrote more than 1,000 checks totaling more than $500,000." It is very likely the 80 transactions sampled are just the tip of an iceberg characterized by improper and wasteful spending of federal funds.
The ultimate irony is that a similar report conducted in 2008 found the exact same internal control weaknesses as those found in the most recent report conducted by the Inspector General. Due to an obvious inability of EPA officials to correct these internal control weaknesses, there is no guarantee that any of the prohibited and improper conduct by EPA employees will change.
An obvious culture of improper spending has developed at the EPA with little to no oversight. Thus in years to come Americans could again find themselves paying for EPA employees’ gym memberships, gift cards, and whatever else may strike their fancy.
Photo credit: Neon Tommy (Photo has been resized)