The Peace Corps did not manage its government purchase card program effectively and in accordance with the Office of Management and Budget Circular A-123 Appendix B. This occurred because Peace Corps did not ensure adequate internal controls over its Government Purchase Card Program. Specifically, Peace Corps:
- Did not implement policies and procedures for the use of convenience checks, purchase of “Do Not Buy” items, and reoccurring training requirements.
- Lacked controls over the account setup, maintenance, and closure processes necessary to ensure proper authorization, timely processing, and segregation of duties.
- Did not conduct adequate monitoring of cardholder accounts and transactions and sufficient risk assessments.
As a result, Peace Corps employees purchased $3,033 of unnecessary items, did not always use the most efficient means of payment, and did not fully comply with federal purchase card and contracting regulations.
Peace Corps made significant improvements during FY 2008 and corrected deficiencies identified during the audit. However, the Office of Acquisitions and Contract Management could further strengthen controls over its Government Purchase Card Program by:
- Updating Peace Corps Manual section 731, “Purchase Card Program” to include convenience check guidance and a continual training process.
- Developing a policy that defines the process a cardholder must use and the approvals necessary to purchase an item on the “Do Not Buy” list, including the purchase of refreshments and furniture for personal use.
- Developing a process to verify the direct hire status of all new cardholders before issuing a purchase card.
- Issuing a policy memorandum reminding cardholders and approving officials to notify the agency program coordinator immediately when transferring offices or leaving the Peace Corps.
- Aligning the risk assessments with internal control standards to include all elements required by the Office of Management and Budget.
Our report contains nine recommendations, which, if implemented, should strengthen internal controls and correct the deficiencies in the Peace Corps Government Purchase Card Program. Of the nine recommendations made in our report, management fully concurred with two recommendations, partially concurred with two recommendations, nonconcurred with three recommendations and nonconcurred with parts of two recommendations. We closed recommendation B.1 based on management’s comments.
CONTENTS
Executive Summary
Introduction
General
Background
Criteria
Objectives
Finding A: Incomplete Policies and Procedures
Recommendation A: Update Guidance
Finding B: Inadequate Control Activities
Recommendation B: Strengthen Control activities
Finding C: Insufficient Monitoring and Risk Assessment
Recommendation C: Increase Frequency Level of Reviews
Agency Initiatives
List of Recommendations
Questioned Costs
APPENDIX A: Objectives, Scope, and Methodology
APPENDIX B: Acronyms and Glossary
APPENDIX C: Management's Response
APPENDIX D: OIG Comments
APPENDIX E: Audit Completion and OIG Contact
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