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Monday, July 5, 2010

FEMA Workers Ran Up $247,100 in 'Improper Purchases' on Government Credit Cards--Including $4,318 in 'Happy Birthday' Cards

Wednesday, June 30, 2010
By Fred Lucas, Staff Writer


Tim Barnett, right foreground, region 1 director of the Infrastructure Branch of FEMA, joins a team of inspectors from FEMA, the Army Corp of Engineers and Rhode Island Department of Transportation as they inspect the bridge over the Pawcatuck River and the Alton Dam in Hopkinton, R.I. on Thursday, April 1, 2010. (AP Photo/Joe Giblin)
(CNSNews.com) – One employee used a Federal Emergency Management Agency (FEMA) credit card to buy $4,318 in “Happy Birthday” gift cards. Two other FEMA officials charged the cost of 360 golf umbrellas -- $9,000 -- to the taxpayers. Other FEMA officials used funds allocated for disaster relief in Oklahoma to buy 19 portable ceramic heaters for the office at a cost of $1,098.

In all, $247,100 in “improper” expenses was made to FEMA credit cards, according to a report by the Department of Homeland Security Office of Inspector General.

“Disaster purchase cards can be used only for disaster needs, using disaster funding, and are the preferred method to pay for disaster-related micro-purchases,” the IG report says. “With more effective internal controls, FEMA could have prevented more than $247,100 of improper purchases or detected them more quickly.”

Between October 2007 and June 2009, the time period in which the OIG reviewed the credit card purchases, the office found a total of 280 people holding disaster-purchase cards spent more than $14.1 million. Office supplies were the most common purchase, but fit within authorized expenses.

The report notes that not every improper use of the cards was for personal reasons. Improper usage falls into three categories: incorrect, unauthorized and fraudulent.

Incorrect purchases are “mistakes caused by an unintentional error during the purchase process.” This could include buying the wrong type of equipment.

An unauthorized purchase includes buying items that are intentionally purchased outside of the cardholder’s purchasing authority. Fraudulent purchases “include those that were unauthorized and intended for personal use; made using government charge cards or account numbers that had been compromised; and correctly charged to the charge card but that involve potentially fraudulent activity.”

The bulk of misspent money – $158,600 – was spent for purposes for which it was not designated.

“More than $158,600 of purchases, by 26 cardholders, used funds designated for other purposes. For example, cardholders bought more than $20,400 of software, printers, facsimile machines, copiers, and scanners using funds designated for other commodities,” the report said.

“By not using the correct categories of funds, these cardholders made it difficult for FEMA to know where money was actually needed and for what types of goods or services. Also, they increased FEMA’s risk of making expenditures in excess of available funds and having unliquidated obligations that could be used for other needs,” it added.

The report continued, “At least $78,000 in split purchases by three cardholders in one FEMA region.

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