[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 �`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