Use of Federal Government's Credit Cards Growing, Along With Abuses Banks have been forced to write off nearly $20 million in bad debts by employees. Associated Press WASHINGTON -- Federal government employees are on target to spend nearly $19 billion using official credit cards this year - - a plastic shopping spree that was designed to make purchasing easier but often has been slow to detect abuse. For instance, an employee in the U.S. attorney's office in Los Angeles charged nearly $500,000 in personal expenses over three years to her government card before she was caught, court records show. Meanwhile, Education Department workers misused their cards several times to buy pornographic materials from an Internet site. Their purchases raised no alarms at the agency but were detected by congressional auditors. In 2001 alone, the five banks that provide credit cards to federal agencies already have been forced to write off nearly $20 million in bad debts by employees, records show. In all, the government has 3.1 million active charge cards, enough to equip three of every four workers, while at least 15 agencies have more credit cards than employees, according to an Associated Press review of records obtained under the Freedom of Information Act. Those charged with monitoring the explosive growth say the sheer number of cards distributed by agencies makes it difficult to detect abuse. "It's almost impossible to do real tight controls unless you've got a whole army of reviewers," said Gregory Kutz, a congressional auditor for the General Accounting Office who recently highlighted credit-card abuses at Navy operations in California. The AP reported last month that 1.8 million credit cards used by Pentagon employees wracked up nearly $9 billion in debt in 2000. One bank alone was forced to write off $58 million in fraudulent or abusive purchases by military personnel. The Federal Emergency Management Agency, which provides disaster relief, and the Securities and Exchange Commission, which regulates stocks and bonds, each have more than twice as many credit cards as employees, according records maintained by the General Services Administration. "That's certainly one area we're looking at, whether we need to reduce the number of cardholders," said Debra Sonderman, who manages the Interior Department's credit-card program. Her agency has 82,835 credit cards for just 68,000 workers. Federal agencies began issuing credit cards en masse in the 1990s to cut red tape and speed purchasing. Cards were issued for office supplies, travel and automobile maintenance and fuel. Many employees are provided more than one card. Officials credit the effort with eliminating unnecessary paperwork and allowing workers to get bargains by buying quickly. The program last year earned the government $50 million in rebates, and officials say abuses by a few shouldn't tarnish a good idea. "While all payment mechanisms are subject to a certain degree of risk, GSA has built safeguards and systematic controls into the program designed to minimize risks," said Patricia Mead, the GSA's acting deputy assistant commissioner. But after years of explosive growth and little oversight, the initiative is being looked at by a Congress wary that it has become too easy for employees to purchase with plastic -- or walk away from debts. "The government should be a good actor in its business dealings," said Sen. Charles Grassley of Iowa, the top Republican on the tax-writing Senate Finance Committee. He has led efforts to highlight Pentagon credit card abuses, and is now expanding that review to all federal agencies. http://www.cfo.com/article/1,5309,4595||A|58|8,00.html
