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*. U.S. Environmental Protection Agency	14-P-0128
Office of Inspector General	March 4 2014
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\.o At a Glance
Why We Did This Audit
The Government Charge Card
Abuse Prevention Act of 2012
states the Inspector General is
to conduct periodic
assessments of the agency
purchase card and
convenience check programs
to identify and analyze risks of
illegal, improper or erroneous
purchases and payments.
The Office of Inspector General
(OIG) also looks for categories
of purchases that could be
made by means other than
purchase cards in order to
better aggregate purchases
and obtain lower prices.
In fiscal year 2012, the
U.S. Environmental Protection
Agency's (EPA's) active
cardholders spent more than
$29 million in purchases. The
EPA did not provide effective
oversight to ensure that
purchase card holders and
approving officials complied
with internal control
procedures.
This report addresses the
following EPA theme:
• Embracing EPA as a high
performing organization.
Ineffective Oversight of Purchase Cards
Results in Inappropriate Purchases at EPA
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2014/
20140304-14-P-0128.pdf
The EPA began taking
action to improve the
oversight of purchase
cards and is considering
other improvements.
What We Found
The EPA did not provide effective oversight to
ensure that purchase card holders and approving
officials comply with internal control procedures.
Of $152,602 in transactions we sampled, we found
$79,254 of prohibited, improper and erroneous
purchases. Some of the more egregious purchases
we identified were meals for an awards recognition ceremony and gym
memberships for EPA employees and their families.
Although the Office of Administration and Resources Management's Federal
Managers' Financial Integrity Act 2012 assurance letter stated that the agency
would take corrective actions to correct any identified vulnerabilities, it allowed
offices to skip a recent biennial review and did not require follow-up.
The EPA is analyzing transactions to identify purchases that can be made by
other means to obtain lower prices. The EPA initiated a Business Analysis and
Strategic Sourcing Service Center team to identify efficiencies in contracting to
encourage competition and decrease spending with nonmandatory vendors.
The EPA estimated potential cost savings of 8 percent.
Recommendations and Planned Agency Corrective Actions
We recommend that the EPA implement regular transaction reviews to determine
if the cardholders and approving officials are complying with EPA guidance. The
EPA should provide additional training to the purchase card holders and approving
officials to address issues identified in this report and institute follow-up actions for
the prohibited, improper or erroneous purchases identified in this audit. The EPA
should institute agencywide standard operating procedures, and revise the
Contracts Management Manual to more specifically address purchases such as
gym memberships and gift cards. In addition, the EPA should ensure that biennial
review weaknesses are corrected and change the biennial review process to
ensure that each office conducts uniform reviews, including transaction testing for
every cardholder. The EPA's planned corrective actions address all of the draft
report recommendations. Based on the response to the draft report, one
recommendation was added to the report that the agency will need to address.
Noteworthy Achievements
As we discuss in our audit results, the EPA began taking action to improve the
oversight of purchase cards. The EPA is in the process of considering additional
improvements, including focused transaction reviews to ensure compliance with
EPA policies. In addition, we commend the EPA's strategic sourcing procurement
efforts to obtain quantity discounts.

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