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Regional Aviation
News
GAO Audit Uncovers $6 Million In Wasteful & Improper Purchases By FAA Offices
Improper Purchases Included Hardware Store Gift Cards, Waterford Crystal & Personal Internet Subscriptions
March 26 , 2003 Washington, D.C. - The General Accounting Office (GAO) has determined that insufficient controls over the use of official government purchase cards at the Federal Aviation Administration (FAA) led to more than $6 million in improper, wasteful or questionable expenditures in fiscal year 2001, according to a newly released GAO report. The audit was performed at the request of U.S. House Transportation and Infrastructure Committee Chairman Don Young (R-Alaska). A previous GAO report, also performed at the request of Chairman Young and released in May 2002, examined purchasing controls and the validity of purchases at FAA’s Alaska Region and found the controls to be inadequate, leading to improper purchases. The report released today, entitled FAA Purchase Cards: Weak Controls in Instances of Improper and Wasteful Purchases and Missing Assets (GAO-03-405), reviewed purchase card and convenience check use for FY 2001 at FAA headquarters, the two FAA centers and the other eight regional offices. The entire GAO report can be reviewed here. The Aviation Subcommittee will hold a hearing on Thursday focusing on the reauthorization of the FAA and aviation programs. The results of the GAO study may be discussed at the hearing. “I Don’t Consider Gift Cards At Wal-Mart & Waterford Crystal To Be In The Realm Of Legitimate Government Spending” – Chairman Don Young “I’m disturbed by the results of this report,” said Chairman Young. “I do not consider gift cards to Wal-Mart and Waterford crystal to fall within the realm of legitimate government spending. “FAA needs to establish better purchasing controls and enforcement of controls when violations occur so that FAA funds are more wisely and properly spent. We in government are entrusted with the taxpayers’ money and those who irresponsibly use that money must be held accountable. “Our Committee intends to monitor this issue closely and I strongly encourage FAA to improve their procedures governing the use of purchase cards and get their house in order,” said Young. GAO Found Millions In Improper Transactions & Missing Or Stolen Equipment The GAO audit uncovered $5.4 million in purchases that were considered improper, such as purchases made by unauthorized card users, and purchases spilt into multiple segments in order to avoid single user purchase limits. GAO also uncovered $630,000 in purchases considered wasteful because of excessive cost, questionable government need, or lack of documentation to determine the appropriateness of the purchase. According to the report, “The lack of adequate internal controls and monitoring of the program created an environment in which improper purchases - meaning those that violated law, regulation, or FAA policy - could be made with little risk of detection. “Despite prior audit reports dating back to 1997 communicating some of these weaknesses, we found the same weaknesses continued during our review, which covered fiscal year 2001.” Some improper or questionable purchases found by GAO included personal digital assistants and various accessories such as Coach leather cases, individual internet subscriptions despite FAA’s provision of on-line access for workers, gift cards to stores such as Wal-Mart, Home Depot, and Safeway, and Waterford crystal retirement gifts. “Although these types of policy violations are subject to disciplinary action, we generally found that action had not been taken against the cardholders or approving officials,” the report stated. The $6.1 million in improper purchases, though a comparatively small part of total purchase card expenditures, nevertheless “demonstrates vulnerabilities from weak controls that could easily be exploited to a greater extent. Because we only tested a small portion of the transactions we identified that appeared to have a higher risk of fraud, waste, or abuse, there may be other improper, wasteful, and questionable purchases in the remaining untested transactions.” The report also found that, due to poor internal controls, $4.1 million in asset-related transactions had not been recorded in FAA’s property management system. Of the purchase card items that GAO asked FAA to locate, nearly $300,000 worth could not be located. Nearly $2 million in lost or stolen items were reported at one FAA location in 2001 and 2002. The poor controls and documentation found by GAO create unnecessarily high risks of equipment theft and loss. According to the report, “Given the systemic weaknesses we identified in FAA’s property controls, the actual amount of missing or stolen equipment agency wide could be much higher.” GAO Recommendations For Improving Purchase Card Program GAO made some recommendations for improving FAA’s purchase card program, including:
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U.S. House Committee on Transportation and
Infrastructure Contact: Steve Hansen (Director of Communications) (202)
225-7749 To: National Desk/Transportation Reporter
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