[Survey Report on Use of the Governmentwide Purchase Card, Bureau of Land Management]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 98-I-352

Title: Survey Report on Use of the Governmentwide Purchase Card,
       Bureau of Land Management

     Date: February 17, 1998



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   U.S. Department of the Interior
   Office of Inspector General

   SURVEY REPORT: USE OF THE GOVERNMENTWIDE PURCHASE CARD,
   BUREAU OF LAND MANAGEMENT
   
   REPORT NO. 98-I-352
   MARCH 1998


   MEMORANDUM


   United States Department of the Interior
   OFFICE OF INSPECTOR GENERAL
   Washington, D.C. 20240

   
                TO:  The Secretary
   
              FROM:  Robert J. Williams 
                     Acting Inspector General
  
   SUBJECT SUMMARY:  Final Survey Report for Your Information -
                     "Use of the Governmentwide Purchase Card,
                     Bureau of Land Management" (No. 98-I-352)  
     
  
     Attached for your information is a copy of the subject final
     survey report. The objective of the survey was to determine
     whether the Bureau of Land Management managed the Governmentwide
     Purchase Card Program in accordance with applicable laws,
     regulations, and guidelines. We concluded that, overall, the
     Bureau managed the Program in accordance with applicable laws,
     regulations, and guidelines. Therefore, we terminated the audit
     at the end of the survey. However, we did note instances in
     which cardholders' statements had not been processed promptly,
     receipts were not maintained for some transactions, and some
     purchases were made by unauthorized personnel. These conditions
     occurred because cardholders and procurement officials did not
     comply with established regulations and procedures in the
     Bureau's Training Manual. We made two recommendations to improve
     management and internal controls over the Program. The Bureau's
     response to the draft report did not indicate concurrence or
     nonconcurrence with either recommendation. Therefore, based on
     the response, we considered both recommendations unresolved and
     have requested the Bureau to reconsider these recommendations.
  
     If you have any questions concerning this matter, please contact me at
     (202) 208-5745.
   
     Attachment
   


     Memorandum                                            C-IN-BLM-003-96
                                                           MAR 31 1998
     United States Department of the Interior
     OFFICE OF INSPECTOR GENERAL
     Washington, D.C. 20240
   
     SURVEY REPORT
   
     To: Director, Bureau of Land Management
   
     From: Robert J. Williams 
     Acting Inspector Gener
   
   
   
     Subject: Survey Report on Use of the Governmentwide Purchase Card, Bureau
              of Land Management (No. 98-I-352)
  
     INTRODUCTION 
     
     This report presents the results of our survey on
     the use of the Governmentwide purchase card at the Bureau of
     Land Management. The original objective of the survey was to
     determine whether the Bureau managed the Governmentwide Purchase
     Card Program in an efficient and economical manner and in
     accordance with applicable laws, regulations, and guidelines.
     However, during our survey, the General Accounting Office issued
     the report entitled "Acquisition Reform, Purchase Card Use Cuts
     Procurement Costs, Improves Efficiency" (No. GAO/NSIAD-96-138).
     The report stated: "Agencies have found they can support their
     missions at reduced costs by having Program staff use the
     purchase card for simple purchases. Further, agency studies have
     shown that purchase card use reduces labor and payment
     processing costs." Therefore, based on these statements, we
     revised our objective to determine whether the Program was
     managed in accordance with applicable laws, regulations, and
     guidelines rather than efficiently and economically. 
     
     BACKGROUND
     
     In 1989, the General Services Administration awarded a contract
     to Rocky Mountain BankCard System (Rocky Mountain Bank) to
     provide credit card services within the Federal Government. The
     card was intended (1) to streamline the small purchase and
     payment processes and (2) to be used only for official purposes.
     On June 28, 1990, the Department of the Interior issued the
     "Handbook for Utilization of the Governmentwide Commercial
     Credit Card," under Department of the Interior Acquisition
     Policy Release (DIAPR) 90-35. According to the Release, the
     Department's intent in issuing the Handbook was to present the
     general policy within which each bureau could develop its own
     credit card policy. The Bureau, through participation in a
     Department of Commerce pilot study, has used the card since
     1987. On January 30, 1990, the Bureau issued general policies
     and procedures on the use of the purchase card in its
     "Purchasing - BLM [Bureau of Land Management] 
  
  
  
     Handbook H-1510-1." In July 1993, the Bureau issued specific
     policies and procedures on the use of the purchase card in its
     National Training Center Training Manual "Using Government
     Purchase Cards." The Training Manual is also used as a quick
     reference guide for card users. In July 1995, the Bureau updated
     the guidance in its Training Manual to incorporate new
     Departmental and Bureau regulations and requirements that
     resulted from a new contract awarded in 1994 by the General
     Services Administration. According to the updated Training
     Manual, the purchase card may be used to acquire items that fall
     into four basic categories: small supply purchases, short-term
     rental of nonvehicular equipment, miscellaneous services and
     repairs, and property. The purchase card is to be used only by
     the individual to whom the card was issued and cannot be used
     for cash advances, travel- related costs, the rental of vehicles
     or buildings, repairs for vehicles in the General Services
     Administration fleet, gas or oil for vehicles, telephone
     services, personal items, or printing. An exception is made for
     crew chiefs of the fire, cadastral survey, or wild horse and
     burro operations, who are allowed to use the card for travel
     -related costs in emergency situations. The Rocky Mountain Bank
     electronically transmits a monthly invoice and a data file
     containing each individual transaction for the month to the
     Bureau's National Business Center, in Denver, Colorado. The
     Bureau totals the data by what it calls its "Level 4 of fices,"'
     prepares a payment document, and processes the payment to the
     Bank. In addition, the Bank submits to each cardholder a monthly
     statement that itemizes the cardholder's transactions. Within 5
     days of receiving the statement, the cardholder is required, by
     the Training Manual, to review and reconcile the transactions
     and certify that the transactions were recorded accurately. The
     car&older is then required to forward the certified statement
     and all applicable supporting documentation to the cognizant
     approving official. The approving official is required, by the
     Training Manual, to certify the cardholder's statement within 10
     days of receiving the documentation and to determine whether the
     purchases were appropriate and were recorded accurately. The
     Training Manual further states that if the cardholder will not
     be available to sign the statement, the cardholder is required
     to arrange for someone else to review, reconcile, and certify
     that the transactions were recorded accurately. If the approving
     official is unavailable to approve the statement within the
     required time period, the approving of ficial is responsible for
     designating an "acting" of ficial, who must write on the
     statement that he/she is acting. The use of the card within the
     Bureau has been increasing annually. Specifically, our January
     1993 audit report (see Prior Audit Coverage) indicated that
     fiscal year 1990 card purchases were approximately $3 million;
     fiscal year 1991 card purchases were approximately $4.3 million;
     and fiscal year 1992 card purchases (as of August 31, 1992) were
     $5.1 million, at which time 1,200 cards had been issued. Since
     that time, the number of cardholders and the card's use have
     continued to increase to approximately 3,891 cards The Level 4
     offices are the state offices of Alaska, Arizona, California,
     Colorado, Eastern States, Idaho, Montana, New Mexico, Nevada,
     Oregon, Utah, Wyoming; the National Business Center; the
     National Interagency Fire Center; the Washington, D.C.
     headquarters office; and the Helium Operations office. 2 
  
  
  
     and $22.6 million in purchases Bureauwide as of June 1, 1997, as
     shown in the following table: September 30. 1995 September 30.
     1996 June 1. 1997 Purchase Cards 2,936 3,409 3,891 Purchase
     Transactions 76,453 101,279 77,876 Net Purchases $17,773,491
     $26,625,467 $22,599,928 SCOPE OF SURVEY Our survey was conducted
     from March through July 1996 and May through June 19972 and
     included purchases made by Bureau employees for the 18 monthly
     billing periods from September 14, 1994, through March 13, 1996,
     and the period of April 14, 1997, to May 13, 1997. We
     judgmentally selected 130 statements for 83 cardholders from the
     approximately 630 cardholders working at 3 of the Bureau's 16
     Level 4 offces. The 130 statements involved 846 individual
     transactions, totaling $380,700. Survey fieldwork was conducted
     at the Utah State Office and the Salt Lake City District Office,
     in Salt Lake City, Utah; the Vernal District Office, in Vernal,
     Utah; the Nevada State Office, in Reno, Nevada; the Carson City
     District Office, in Carson City, Nevada; the headquarters offce,
     in Washington, D.C.; and the Bureau's National Business Center,
     in Denver, Colorado. In addition, with the assistance of the
     Bureau Purchase Card Coordinator, we contacted all 16 of the
     Bureau's Level 4 offices and obtained information on the annual
     review of credit card transactions required by the Bureau's
     purchasing handbook. Our survey was made in accordance with the
     "Govemment Auditing Standards," issued by the Comptroller
     General of the United States. Accordingly, we included such
     tests of records and other auditing procedures that were
     considered necessary to accomplish our objective. As part of our
     survey, we reviewed the Department's Accountability Report for
     fiscal year 1996, which includes information required by the
     Federal Managers' Financial Integrity Act, to determine whether
     any reported weaknesses were within the objective and scope of
     our audit. There were no reported weaknesses that were within
     the objective and scope of our audit. We also evaluated the
     Bureau's system of internal controls related to card activities
     and found that, overall, the Bureau provided adequate management
     control of purchases made with the card. However, we did find
     some areas where improvements are needed. The improvements and
     recommended corrective actions are discussed in the Results of
     Survey section of this report. The recommendations, if
     implemented, should improve the internal controls in these
     areas. 2 We suspended work on this audit from July 1996 to May
     1997 in order to conduct our audit of the Bureau's financial
     statements for fiscal year 1996. 3 
  
  
  
     PRIOR AUDIT COVERAGE

     During the past 5 years, the Of fice of
     Inspector General and the General Accounting Of fice have each
     issued an audit report that addressed issues related to the
     management of Government purchase cards as follows: The Of
     fice of Inspector General report "Use of the Government Credit
     Card, Bureau of Land Management" (No. 93-I-370), issued in
     January 1993, reported that the Bureau of Land Management had
     little or no control over card purchases made by personnel at
     the field offices reviewed. Specifically, purchases made by
     individual cardholders were required to be made in accordance
     with the General Services Administration's "Cardholder
     Instructions" and with the Federal Acquisition Regulation.
     However, the Bureau paid for card purchases, even though the
     acquired goods and services (1) were specifically excluded from
     acquisition under the Program and (2) were not properly signed
     for and approved. Additionally, the report stated that the
     Bureau may have issued more Government credit cards than were
     necessary for the efficient and effective use of the cards. As a
     result, the Bureau had no assurance that all fiscal year 1991
     card purchases, amounting to $4.3 million, were (1) necessary
     for Program operations, (2) obtained at the least cost, or (3)
     actually received by the Bureau. The report recommended that the
     Bureau (1) review the credit card program and implement
     sufficient internal controls to ensure compliance with the
     Federal Acquisition Regulation and Departmental acquisition
     regulations and (2) ensure that the number of cards issued at
     each field location was limited to the number actually needed
     for efficient and effective operations. In response to our
     recommendations, the Bureau issued Instruction Memorandum No.
     93-166, dated March 8, 1993, which discussed our audit report
     and emphasized the need for controls to the field of fices, and
     Information Bulletin No. 93-577, dated September 3, 1993, which
     requested a review of and report on the need for all cards.
     During our current review, we found that, overall, the Bureau
     had made improvements in its management of the purchase cards.
     However, we noted that some improvements are still needed. - The
     General Accounting Offfice report "Acquisition Reform, Purchase
     Card Use Cuts Procurement Costs, Improves Efficiency" (No.
     GAO/NSIAD-96-138), issued in August 1996, stated that "agencies
     have found [that] they can support their missions at reduced
     costs by having program staff use the purchase card for simple
     purchases." The review included 12 civilian and military
     agencies, including the Department of the Interior. There were
     no recommendations in the report addressed to the Department.
     Instead, the report recommended that the Administrator for
     Federal Procurement Policy provide Federal Acquisition
     Regulation coverage and establish electronic media such as the
     Acquisition Reform Net to facilitate agencies' efforts to
     exchange information about problems or progress with the
     purchase card. 4 
  
  
  
     RESULTS OF SURVEY
     
     We concluded, overall, that the Bureau of Land
     Management Governmentwide Purchase Card Program was being
     managed in accordance with applicable laws, regulations, and
     guidelines. Therefore, we terminated the audit at the end of the
     survey. However, we did note several conditions, which are
     discussed in the following paragraphs, that need to be addressed
     by Bureau management. Based on our judgmental sample of 846
     transactions out of the 255,608 transactions made during the
     audit period, we found that some cardholders' statements had not
     been processed promptly, receipts were not maintained for some
     transactions, and some purchases were made by unauthorized
     personnel. These conditions occurred because cardholders and
     procurement offcials did not comply with established regulations
     and procedures in the Bureau's Training Manual. We believe that
     oversight of the Purchase Card Program by Bureau management
     should be improved to ensure that the Bureau complies with the
     Program's policies and procedures. Untimely Processing of
     Statements The Bureau's Training Manual states that the
     cardholder has 5 days from receipt of the statement to
     reconcile, sign, and forward the statement to the approving
     official. The approving official has 10 days to review and
     approve the statement. However, ofthe 130 statements reviewed,
     totaling $380,700, we found 11 statements, totaling $50,448, for
     10 cardholders that were processed from 2 to 16 days late. The
     cardholders stated that they were out of town and/or that other
     work load requirements precluded the prompt processing of the
     statements. However, as stated in the Training Manual, other
     arrangements are to be made if the cardholders will be
     unavailable to review, reconcile, and certify the statements
     within the 5-day time limit. These requirements are important
     controls that will assist Bureau management in identifying and
     correcting problems in purchase card usage in a timely manner.
     Missing Receipts The Bureau's Training Manual requires that
     individual purchases be supported by receipts which list the
     items or services purchased and indicate that these items or
     services were received. In our review of the 846 purchases,
     totaling $380,700, we found 39 purchases, totaling $ 19,925, for
     14 car&orders that did not have the required receipts. For 36 of
     the 39 purchases, both the car&orders and the approving offcials
     had signed the statements indicating that a receipt for each
     transaction was attached. One procurement office car&older who
     made 16 purchases, totaling $10,473, of the 39 purchases said
     that vendors did not send receipts on telephone orders. Instead,
     according to the car&older, the receiving copies of the
     requisition form were generally signed and dated when the
     purchase was 5 
  
  
  
     received. However, in those instances reviewed, the cardholder
     said that she was detailed to another office just before the
     statement we reviewed was received and that the individual who
     processed the statement may not have noticed that the receiving
     reports were not signed and dated. For the remaining 23
     purchases, the cardholders stated that they had lost the
     receipts. Unauthorized Use The Bureau's Training Manual requires
     the purchase card to be used only by the cardholder. However, of
     the 846 purchases reviewed, totaling $380,700, we found 6
     purchases, totaling $3,500, for one cardholder that were made by
     individuals other than the car&older. According to the
     car&older, the card was routinely used by other individuals in
     the office who had reached their purchase limits on their own
     cards and by one employee who had his card taken away because
     the employee had not processed his statements in a timely
     manner. In one instance, a $500 phone order purchase was made on
     the card by the car&older's approving official. Annual Reviews
     The Bureau's "Purchasing - BLM [Bureau of Land Management]
     Handbook H-1510-1" requires that a warranted contracting of
     ficer review the record of card transactions at least once
     annually to ensure proper use of the card. However, during our
     review of the 16 Level 4 offices, we found that 2 offices were
     not performing the required annual reviews. Although the
     required annual reviews were performed in the remaining 14
     offices (3 of which we visited), improvements are needed to
     ensure that the cardholders and management comply with the
     established regulations and procedures, as discussed in the
     previous paragraphs. Recommendations We recommend that the
     Director, Bureau of Land Management: 1. Ensure that cardholders
     comply with established Purchase Card Program policies and
     procedures and that the purchases are reviewed by a warranted
     contracting of ficer at least annually. In addition, any
     weaknesses identified, including the untimely processing of
     statements, missing receipts, and unauthorized use, should be
     corrected. duties. 2. Ensure that the purchase limit is adequate
     for the needs of each car&older's official 6 
  
  
  
     Bureau of Land Management Response and Office of Inspector Ge':]
     Reply In the January 22, 1998, response (Appendix 1) to the
     draft report from the Director, Bureau of Land Management, the
     Bureau did not indicate concurrence or nonconcurrence with
     either recommendation. Based on the response, the Bureau is
     requested to reconsider its response to both recommendations,
     which are unresolved (see Appendix 2). Recommendation 1.
     Concurrence/nonconcurrence not indicated. Bureau of Land
     Management Response. In its response, the Bureau stated that a
     handbook for program coordinators and procurement users was
     being developed and that this handbook, which will be issued by
     June 1998, will "set forth policy and procedures for warranted
     car&orders and local Purchase Card Program managers." The Bureau
     further stated that the car&orders are no longer required to
     process the statements within 5 days because of implementation
     of the Bank Card interface; that requisitions are used as
     receipts by warranted car&orders that invoices are not always
     available, particularly for telephone orders; and that all
     offices are now performing required annual reviews. In addition,
     the Bureau stated that although telephone orders were placed by
     the car&older, the item`; purchased were picked up by other
     individuals and that therefore there was no unauthorized use of
     the card. Offce of Inspector General Reply. Although the
     recommendation was for the Bureau to ensure compliance with
     established polices and procedures and the Bureau response
     indicated that the revised handbook would set forth policy and
     procedures, the Bureau did not address how it would ensure
     compliance with the policy and procedures set forth in the new
     handbook. The Bureau should also emphasize, in its handbook or
     training courses, that, for warranted car&orders, requisitions
     need to be signed and that, for nonwarranted cardholders,
     documentation such as packing receipts is necessary to
     demonstrate that goods or services have been received. In
     addition, we suggest that the Bureau emphasize that the card is
     to be used only by the car&older and only for items needed in
     the official duties of the car&older. In the instances we
     identified, the car&older stated that she did not make the calls
     and did not have a need for the items in performing her duties
     but that the calls were made by other individuals and that the
     purchases were for items necessary for them to perform their
     duties. Further, the Bureau did not provide any informalion on
     the offices that have completed their annual reviews.
     Recommendation 2. Concurrence/nonconcurrence not indicated.
     Bureau of Land Management Response. In its response, the Bureau
     stated that cardholders may request an increase in their monthly
     purchase limit but that the 7 
  
  
  
     monthly purchase limit is "a tool for controlling budget within
     an office and is ar tne discretion of the cardholder's
     supervisor." Omce of Inspector General Reply. Although
     car&orders may request an increase in their monthly purchase
     limit, they apparently were not seeking such an increase. We
     found that car&orders were borrowing cards from other car&orders
     to make purchases when they reached the limits on their own
     cards. We suggest that the Bureau review card limits and/or
     notify the car&orders of the option to increase their limit to
     ensure that the limits meet the needs of individual of fices and
     the Bureau. In accordance with the Departmental Manual (360 DM
     5.3), we are requesting a written response to this report by May
     11, 1998. The response should provide the information requested
     in Appendix 2. The legislation, as amended, creating the Office
     of Inspector General requires semiannual repo'`ting to the
     Congress on all audit reports issued, actions taken to implement
     audit recommendations, and identification of each significant
     recommendation on which corrective action has not been taken. We
     appreciate the assistance of Bureau of Land Management personnel
     in the conduct of our audit. 8 
  
  
              
                                                           APPENDIX 1
                                                           Page 1 of 13
   

   UNITED STATES DEPARTMENT OF THE INTERIOR
   BUREAU OF LAND MANAGEMENT
   Washington, D.C.
   
                                           In Reply Refer To:
                                           1510 (850)
  
     MEMORANDUM
   
   
     To:       Assistant Inspector General for Audits
   
     Through:  Bob Armstrong
               Assistant Secretary, Land and Minerals Management
   
     From:     Director, Bureau of Land Management
   
     Subject:  Response to Draft Survey Report:
               Use of Governmentwide Purchase Card,
               Bureau of Land Management, November 1997; C-IN-BLM-003-96
  
  
  
      Thank you for the opportunity to respond to the subject draft 
     survey report. We have reviewed the draft survey report and offer
     the following response to both recommendations. Our detailed
     comments are attached. Recommendation 1: "Ensure that
     cardholders comply with established Purchase Card Program
     policies and procedures and that the purchases are reviewed by a
     warranted contracting officer at least annually. In addition,
     any weaknesses identified, including the untimely processing of
     statements, missing receipts, and unauthorized use, should be
     corrected." Response: A handbook for Program Coordinators and
     procurement users is being developed. This handbook will set
     forth policy and procedures for warranted cardholders and local
     Purchase Card Program managers. It is expected to be completed
     by June 1998. Recommendation 2: "Ensure that the purchase limit
     is adequate for the needs of each cardholder's official duties."
     Response: Cardholders may request an increase in their monthly
     purchase limit. However, the monthly purchase limit is a tool
     for controlling budget within an office and is at the discretion
     of the cardholder's supervisor. 9 
  
  
  
     APPENDIX I 
     Page 2 of 13 
     
     2 The Assistant Director, Business and
     Fiscal Resources, is the official responsible for
     implementation. If vou have anv questions, please contact
     Cynthia Martin, BLM Purchase Card Program Coordinator, at 202
     -452-5174 or Gwen Midgette, BLM Audit Liaison Officer, at 202
     -452-7739. Attachment 10 
  
  

                                                           APPENDIX 1
                                                           Page 3 of 13

     USE OF THE GOVERNMENTWIDE PURCHASE CARD
     BUREAU OF LAND MANAGEMENT
     November 1997
     Assignment No. C-IN-BLM-003-96
   
     Page 5, Untimely Processing of Statements. Nonconcurrence.
     Office of Inspector General (OIG) Conclusion:
  
     The Bureau's Training Manual states that the cardholder has 5
     days from receipt of the statement to reconcile. sign, and
     forward the statement to the approving official. Bureau of Land
     Management (BLM) Response: As a result of the implementation of
     the Bank Card Interface' it is no longer necessary for another
     employee to reconcile, sign, and forward an absent employee's
     statement of account when the cardholder will be absent for a
     short period of time. Under the new Remote Data Entry
     procedures. the BLM is no longer at risk of incurring interest
     under the Prompt Payment Act because of delayed processing of
     statements. The training manual has been updated to reflect the
     change in procedures. Paye :. Missing Receipts. Partial
     Concurrence. OIG Conclusion: The Bureau's Training Manual
     requires that individual purchases be supported by receipts
     which list the items or services purchased and indicate that
     these items or services were received. BLM Response: As stated
     in the training manual, page iv, "this self-study training
     package was developed for nonprocurement users of the program
     .... " The requirement for receipts to be attached to the
     statement of accounts applies to nonprocurement car&orders only.
     Purchases made by procurement cardholders are supported by
     requisitions. This is the same as though the transaction were a
     purchase order instead of a credit card. OIG Conclusion: For 36
     of the 39 purchases, both the car&orders and the approving
     officials had signed the statements indicating that a receipt
     for each transaction was attached. BLM Response: Receipts should
     be attached, when available, for purchases made by
     nonprocurement type cardholders. Receipts are not always
     available, particularly for telephone orders. Cardholder and
     approving official signatures certify that the purchases were
     made for official Government business, that the items have been
     received, and that all statements are true, correct, complete
     and made in good faith . . . "; therefore, payment is
     authorized. 
  
  
  
     APPENDIX 1 
     Page 4 ofl3 
     
     - Greater emphasis is being placed on
     approving officials' responsibilities to ensure that all
     purchases are for official Government business. funds are
     available. and required documentation is in place. Management's
     efforts include Instruction Memorandum No. 97-159 (Attachment
     l), which has been incorporated into the training manual. With
     the assistance of the OIG's Eastern Division Investigations
     Office. a presentation on prevention of fraud and abuse for the
     Purchase Card Program was made at the BLM's annual training
     workshop conference in Denver in March 1997. All regional
     Purchase Card Program managers were present. Page 6.
     Unauthorized Use. Nonconcurrence. OIG Conclusion: According to
     the cardholder, the card was routinely used by other individuals
     in the office who had reached their purchase limits on their own
     cards and by one employee who had his card taken away because
     the employee had not processed his statements in a timely
     manner. BLM Response: These orders were placed by the cardholder
     over the telephone. Other employees then went to pick up the
     items. Employees were required by merchants to sign as picking
     up the item, thus, giving the appearance of use by someone other
     than the cardholder. The monthly purchase limit is a control
     point and budget tool, and may be raised at the discretion of
     the supervisor. Page 6. Annual Reviews: Concurrence. OIG
     Conclusion: Improvements are needed to ensure that the
     cardholders and management comply with the established
     regulations and procedures. BLM Response: All offices are now
     performing required annual reviews. Efficient and effective
     management of the Purchase Card Program is a priority with BLM
     management as is evidenced by the periodic issuance of policy
     statements. An example is Instruction Memorandum 9747
     (Attachment 2), which reiterates the BLM's policy for training,
     use of good business judgment, and emphasis on approving
     officials' responsibilities. 12 



                                                         APPENDIX 1
                                                       Page 5 of 13
  
  
     
     UNITED STATES DEPARTMENT OF THE INTERIOR
     BUREAU OF LAND MANAGEMENT
     Washington, D.C. 20240
     August 8, 1997
                                                 In Reply Refer To:
                                                1510.151013 (850) P
                                                       Ref.IM 97-47


     EMS TRANSMISSION 8/12/97
     Instruction Memorandum No. 97-159
     Expires: 9/30/98
      
     
     To:       All WO and Field Officials
     
     From:     Director
     
     Subject:  Responsibilities of the Purchase Card Program
               Approving Official
     

     One of the many Bureau of Land Management (BLM)
     initiaties to streamline business practices is the use of the
     purchase card bv emploees to meet their own acquisition needs
     Instruction Memorandum (IM) No. 97-47 set forth a oal to make 90
     percent of all acquisition transactions less than 57.500 bv
     using the 1\fPAC purchase card (\'ISA). While there are
     significant benefits for both the Government and industry by
     using the purchase card, there is also increased potential for
     fraud and abuse. The Purchase Card Program has controls built in
     the system; when these controls are followed, the opportunity
     for fraud or abuse is significantly reduced. The most important
     control is the review performed bv the approving offcial. The
     approving official. who is usually the cardholder's supervisor
     or program leader vho manases program funds, is the principal
     management and quality control point. It is the approving
     official who reviews and approves the cardholder's monthly
     statement of account. By signing the statement of account, both
     the approving official and cardholder are certifying that
     purchases are for official Government business and are
     appropriate acquisitions. The purpose of this Instruction
     Memorandum is to emphasize the importance of the approving
     official's role and to provide information on how to protect the
     Purchase Card Program from fraud and abuse. Each approving
     official is encouraged to be proactive in managing the program.
     The approving official must assure that purchase cards are used
     responsibly, i.e., only reasonably priced items needed for job
     performance are purchased. He or she ensures that funds are
     available for all purchases and takes appropriate action when
     misuse occurs. Attachment 1 provides tips on preventing fraud
     and abuse. A detailed description of the approving official's
     duties is contained in BLM National Training Center Course
     Number SS 1500-11, which should be used as a desk guide. For
     assistance in identifying acquisitions which require special
     processing, Attachment 2 is provided. It also lists items that
     are prohibited purchases. 13 
  
  
  
     APPENDIX 1 
     Page 6 of 13 
     
     If you have any questions reardino the
     Purchase Card Prorum or how you can be proueti`-e in presentin
     frclud and abuse. as ï¿½`ell as actions ' - to take when ou
     suspect there mav te a problem. please contact our iocai
     procurement analvsr or C!nthia .\lartin. BLSI Purchase Card
     Coordinator. on :02 451-'174. / , \,J Z(t ; ,,' / / I,.7" (1'
     Peter W. Niebauer Acting Assistant Director tor Business 2
     attachments and Fiscal Resources I - How to Protect the Purchase
     Card Proram From Fraud and Abuse I p) 2 - Items Which Slav
     Require Special Processin or Nlav Be Prohibited t] pp' 14 
  
  
  
     APPENDIX 1 
     Page 7 of 13 
     
     HOW TO PROTECT THE PURCHASE CARD FROM FRAUD AND ABUSE
     
     Tips to protect the Purchase Card Program from t'raud. . Revie. 
     update and follow   internal control procedures; .\,Iake sre that
     employees are correctly trained on the proper c`e . f the purchase
     and: Reviev summary reports and question any undocumented or
     suspicious purchases: .\latch monthly approving ot'ficial
     reports with cardholder monthly statements: Never accept I don't
     l;now''as an answer; Watch spending patterns A sudden
     unexplained increase in purchases maV he an indication ot'a
     problem,: Take action when fraudulent activity is discovered:
     Report fraudulent activity to manager: and Treat your card as if
     it were your personal card. Protect the number. do nor leave it
     lying around. 

     OPPORTUNITES FOR FRAUD AND ABUSE 
     
     Following are some opportunities for fraud and mav require special
     attention. Remote locations; Little or no onsite supervision or
     review; Downsizing or restructuring of divisions or offices:
     During large or repetitive purchases: During holidays or special
     projects: and During travel. 

     FRAUD INDICATORS AND ABUSE 

     The following are fraud indicators to be aware of. Purchases from
     inappropriate or prohibited vendors. (See Attachment 2 for a
     list of items which may be prohibited or require special
     handling); Poor or nonexisting documentation of purchases;
     Unusual or unexplained entries or purchases; Photocopied records
     in place of originals; An individual that appears to be living
     above their means; An individual with financial difficulties; A
     drastic change in behavior as it relates to the use of the card;
     and Numerous billing mistakes. 15 Attachment I 
  
  
  
     APPENDIX 1 
     Page 8 of 13 
     
     ITE:\lS WHI(:'H '\1\' REQL-IRE SPEL'I\L
     I'R()t'l..`itilNt; ()R!1.\' 13E l'ROHllil'rI,I) l,(!itIti(!N
     sit`ll/ it, tI!7plietl t'l?iV t`' !1t' feLr.` [' 1`iliLi'
     [i?t' i!/!'rri.,'` ```, fitllit' t't't't'!'t tis ,'ie,-`i.` {
     -r'1ititl i,V i.:. Principles ot'Feder;ll AProprl;l[ton L.l``
     Ot't'ice ot'the Generai Counsel L'.S. General Accountin Ot't'ice
     GAO For supplies or services lited belox\. pecial rules or re
     uiations appl\. Purctase cardholdcr and approvin ot't'icials must
     revie`- this list and become t'amiliar `-ith these tems. See
     your .Ncquisition Office it'ou h.i`-e an! uneitions or <`culd
     like more int'orm.ton ADP EOL'[P\lEN'T AYD SERVICES ADVERTISI>iG
     IY 'EWSP.APERS OR PERIODICALS .NIRCRAFT. HIRE OF l'se or v our
     purchase card i prohibited 'or the hire ot'aircrat't. C:ntact !
     ur lcal (:)t't'icc ` Aircrat't Services tor assistance. AIRLIYE.
     BUS. TRA[N'. OR OTHER TRAVEL-RELATED TICKETS ALCOHOL No alcohol
     products are authorized to be purchased. ANNUITANTS APPRAISAL
     SERVICES ARCHITECT-ENG'EER (A-E) SERVICES ARMS AND AMMUNITION
     AUDIOVISUAL SERVICES AWARDS. NONMONETARY See IB No. 96-84 or the
     Human Resources Management office for more information. BUSINESS
     CARDS Usin appropriated funds for business cards is prohibited.
     Also, see Greeting Cards. CALENDARS CARPETING 16 Attachment 2-I
     
  
  
     APPENDIX 1 
     Page 9 of 13 
     
     CASH .ND\`'AN'CES Cash advances are
     prohibired. For raxel-related cash ai\ancei. ue the travel
     c;lrci. CHE.lICALS CLOTHING CONSTRL'CTION CON'TESTS. ENTRY FEES
     DECALS. BLM DECORATIONS, SEASONAL DESEL DRAPERIES DUPLICATING
     AND PRINTING SERVICES EMPLOYEES. PURCHASES FROM ENTERTAINMENT
     FOR GOVERNMENT EMPLOYEES Paying for entertainment is generally
     not allowed. ENVELOPES EQUIPMENT RENTAL WITH OPERATOR EXPERT AND
     CONSULTANT SERVICES FINES AND PENALTES As a general rule, no
     authority exists for the Federal Government to use appropriated
     funds to pay fines or penalties incurred as a result of its
     activities or those of its employees. FILM PROCESSING MAILERS
     You may not purchase processing mailers that include the cost of
     film processing. This would amount to paying for a service in
     advance which is prohibited by law. FURNISHINGS. OFFICE
     (Decorative Items) GASOLINE 17 Attachment 2-2 
  
  
  
     APPENDIX 
     1 Page 10 of 13
     
     (,IFTS Gt'ts .annot te purchael th .
     grrnr.`l tlnLls GREETING CARDS Busness. `,reein. or holida! car-
     are considered ersonai ue ren V< cJnnor ue Governmen t'unds to
     obtain them. INFOR.\IATION TECHNOLOGh'/.NDP EOL'IPMENT AND
     SER\'ICES INSL'RANCE The Governmen is essentially ielt'-insured.
     primarily in re<'ard to loss or damae to Goemment properts and
     the liability ot'Goernment employees inot';lr .- the Governmen `
     leall responsible or would ultimateiv bear the loss. \tEALS.
     DRINKS. LODGING Meals. drinks and lodging are prohibited except
     t'or authorized cre`` chiet's. \lEMBERSHIP FEES .:IOTION
     PICTE'RE PRODE'CTION' AND REPRODE'CTION NEWSPAPERS. MAGAZINES.
     PERIODICALS. ,ND OTHER PE:BLICATIO>IS PAID ADVERTISING IN
     SUPPORT OF THE WILD HORSE AND Bl'RRO PROGRAM PERSONAL CONVENENCE
     ITEMS Government funds may not be used to buy items intended for
     any employee's personai convenience or to satisfy personal
     desires (i.e.. a desk heater. humidifier. special desk
     accessories.) PERSONAL EXPENSES AND FE'RNISHINGS Personal
     furnishings are not authorized to be purchased under
     appropriations in the absence ot' specific provision, if such
     furnishings are for the personal convenience, comfort, or
     protection of an individual employee, or are such as to be
     reasonably required for accomplishing his or her job. PERSONAL
     INTEREST IN PURCHASES No employee may approve, disapprove,
     recommend, reject, or otherwise participate in a purchase or
     contract in which the employee or family or business associates
     have any interest. except as authorized by the Department's
     Personnel Manual. Participation with such an interest is a
     criminal violation, subject to fines and imprisonment. PERSONAL
     OR NONPERSONAL SERVICES PROTECTIVE CLOTHING AND EQUIPMENT 18
     Attachment 2-3 
  
  
  
     APPENDIX 1
     Page 11 of 13
    
     RENT.AL OR LEASE OF VEHICLES When in
     travel status. use the travel card for the rental or lea.se c
     t'vehicles. RENTAL OR LEASE OF BUILDINGS The rental or lease
     ot'buildinos is prohibited. SAFETY .ARTICLES SENSITIVE PROPERTY
     Regardless of unit acquisition. the cost must be entered into
     the property Nvstem. Exampie of sensitive property are firearms.
     Iaptop computers. and lobal positionina stations. SERVICE.
     CONTRACTING SERVICES PERSONAL S IGI,rS SLIDE SHOWS SPECIAL
     EQUIPMENT AND FURNISHINGS FOR EMIPLOYEES TO PERFORM OFFICIAL
     DUTES The need for special equipment and fumishings for
     individual employees must be justified. proving the item is
     essential for the transaction of official business from the
     Government's standpoint. An item which is essential or desirable
     for a particular individual employee or group of employees, but
     is not essential to the transaction of official business from
     the Govemment's standpoint, shall not be purchased with BLM
     funds. STATIONARY SUBSCRIPTIONS IELEPHONE SERVICES Any services
     that are covered by FTS 2000, i.e., a PBX or telephone lines are
     prohibited. TEMPORARY HELP TOBACCO PRODUCTS The BLM does not
     fumish tobacco products to employees, even if subsistence is
     fumished. TRANSPORTATION OF ITEMS VEHICLE MAINTENANCE 19
     Attachment 2-4 




                                                          APPENDIX 1
                                                          Page 12 of l3

     United States Department of the Interior
     Bureau of Land Management
     1849 C Street, N.W.
     Washington, D.C. 20240
   
     December  7, 1996
    
     EMS TRANSMISSION 1/2/97
     Instruction Memorandum No. 97-47
     Expires: 9/30/98
   

     To:      All Fieid and WO Officials
   
     From:    Director
   
     Subject: Establishment of Purchase Card (VISA) Use Goal
  
  
  
     The purpose of the governmentwide commercial VISA card is to: In
     Reply Refer To: 1510.1 3 (850)P - improve the efficiency and
     economy of buying goods or services, particularly at or below
     the $2,500 micropurchase level; reduce administrative costs, and
     avoid unnecessary administrative and logistical burdens. To
     promote optimal use of the VISA card, a Bureauwide goal has been
     established for its use. This Instruction Memorandum sets forth
     that policy and goai. The goal for transactions under $2,500 is
     to have 90 percent handled via VISA. The policy for those
     employees needing to purchase supplies or services under $2,500
     is that supervisors shall empower them with a VISA card.
     Procurement personnel will focus their resources on more complex
     transactions. In the event a vendor does not accept the VISA
     card, any requisitions submitted to the procurement office for
     under $2,500 must state vendor does not accept VISA cardU or
     provide other justification. For the convenience of
     nonprocurement VISA card users, an easy to complete self- study
     training package has been created to provide Bureau of Land
     Management potential VISA cardholders and approving officials
     with a basic knowledge of Federal acquisition regulations and
     policies, as well as procedures for processing Government VISA
     card transactions. 20 
  
  
  
     APPENDIX I
     Page 13 ofl3
    
     2 After completing this training, VISA
     cardholders will be able to make proper purchases, using good
     business judgment, and increase overall efficiency in meeting
     program needs. Approving officials will be aware of their
     responsibility to review and approve VISA card statements. VISA
     cardholder and transaction data, by State, will be provided
     periodically to enable you to track your progress toward the
     goal and compare progress in relation to other States. For more
     information on obtaining the training package or how to obtain a
     VISA card, contact your local procurement analyst. obert Henr
     Acting, Assistant Director for Business and Fiscal Resources 21
     
  
  
     APPENDIX 2 STATUS OF SURVEY REPORT RECOMMENDATIONS

     Finding/Recommendation Reference 1 and 2 Status Unresolved 22
     Action Required Reconsider the recommendations, and provide
     action plans that include target dates and titles of offcials
     responsible for implementation. 
  
  
  
        
    ILLEGAL OR WASTEFUL ACTIVITIES SHOULD BE REPORTED TO THE OFFICE OF
    INSPECTOR GENERAL BY:

    Sending written documents to:                 



    Within the Continental United States
    
    U.S. Department of the Interior
    Office of Inspector General 
    1849 C Street,N.W.
    Mail Stop 5341
    Washington, D.C. 20240

    Calling:

    Our 24hour
    Telephone HOTLINE
    1-800-424-5081 or
    (202) 208-5300
    
    TDD for hearing impaired                                                  
    (202) 208-2420 or
    1-800-354-0996



    Outside the Continental United States

    
    Caribbean Region
    
    U.S. Department of the Interior
    Offce of Inspector General
    Eastern Division- Investigations
    1550 Wilson Boulevard
    Suite 410
    Arlington, Virginia 22209

    Calling:
    (703) 235-9221


    North Pacific Region

    U.S. Department of the Interior
    Office of Inspector General
    North Pacific Region
    238 Archbishop F.C. F'lores Street
    Suite 807, PDN Building
    Agana, Guam 96910

    
    Calling:
    (700) 550-7428 or 
    COMM 9-011-671-472-7279