Audit uncovers credit system errors
YONGSAN GARRISON, South Korea — Internal audits have found errors in how government credit cards were used during fiscal 2002.
But a very low percentage of those purchases appeared irregular, said Col. Jeff Christiansen, commander of Area I, the Army’s northern administrative district in South Korea. Most involved problems with paperwork.
“We had some purchases that we just did not have a record of who requested it,” Christiansen said.
Other errors included cardholders who didn’t get approval from the billing official before buying, Christiansen said.
Training and supervision have been stepped up to ensure proper procedures are in place, he said.
For example, billing officials and cardholders attended training June 3 and last week, Christiansen said. The training is mandatory for those who want to continue to have a credit card.
In fiscal 2002, government purchase cards, also known as international merchant purchase authorization cards, were used to buy $10 million of goods in Area I, said John Herfurtner, Area I’s resource management director.
Lee Wright, U.S. Army Contracting Command Korea Government Purchase Card program manager, mentioned only one serious billing case:
A billing official is under investigation for authorizing about $18,000 on a number of purchases over a few months. Investigators are trying to determine if correct appropriated funds were used.
The investigation is not criminal, and name of the person won’t be released, Wright said.
However, if the investigation shows items were purchased for personal use, then the investigation may be turned over to U.S. Army Criminal Investigation Division agents.
The cards can be used to buy supplies for units, Wright said. Purchases are limited to $2,500 per shopping trip.
The government is trying to educate billing officers who oversee and approve purchases for cardholders authorized to buy items, Wright said.
However, Christiansen noted some cardholders in Area I had merchants split charges to make it appear as though they didn’t exceed the limit.
“We’ve seen cases where a cardholder may have doctored a receipt,” Wright said.
Under government rules, items costing more than $2,500 must be contracted out, seeking at least three bids, Wright said. However, some cardholders have been reluctant to take it to contracting because the wait is longer, Wright said.
U.S. Forces Korea is looking at instituting an $8,000 monthly limit on the credit cards, Wright said. Currently, spending limits are based on the units. Part of the reason is that units are purchasing some items regularly, and the government could obtain a better price if the item was contracted.
The move would allow for “more control over the cards being used for their intended purchase rather than being used instead of other contract vehicles,” Wright said.
“We are trying to say ‘Let’s use the purchase cards less.’”
Throughout USFK, about $5 million to $6 million is spent monthly using IMPAC cards, Wright said.
Individual cardholders spend between $3,000 and $7,000 monthly. “The billing official is responsible for verifying the charges made by the cardholder and ensuring they are accurate and for legitimate purposes,” Wright said.