NCUA finds credit card policies need some tweaking, little abuse uncovered

ALEXANDRIA, Va.-Following an internal investigation into the agency’s travel and purchase card usage, NCUA is revamping its credit card usage policies and procedures to prevent potential problems. The review completed by the Office of Inspector General (OIG) discovered little abuse of the 957 agency travel cards and no abuse of the 32 purchase credit card accounts. “We didn’t find any abusive charges at all,” Acting Inspector General Bill DeSarno said of the 122 `judgmental’ transactions on the 26 cards that were studied. However, he admitted the agency discovered several areas where policies and procedures need tightening and clarification. For example, three accounts were found still open for former NCUA employees, which have since been cancelled. DeSarno said he has been in the OIG office for five years and he does not recall a similar study being performed. NCUA also performed a review of its travel cards, which determined 69 of 158 travel cards reviewed that showed possible misuse. Of those 69 and a possible 561 abusive charges totaling nearly $38,000, 37 had three or fewer suspect charges. DeSarno said some of these could be attributed to accidental use where an employee has a similar looking card in their wallet. Twenty-three of those 69 had total suspect charges under $100. However, of the 158 travel cards reviewed, 15 had 11 or more suspect charges and 22 had charges exceeding $500. Additionally, there were 34 accounts overdue, even by one day, which accounted for 60%, or 336 of the 561, total suspect transactions and 47% of the dollar amount of the suspect charges. Seven cards were more than 60 days delinquent, according to the study. There were 52 travel cardholders who no longer worked at NCUA. The agency reviewed 14 of these and found one person had used the card after leaving the agency. Travel cards are typically billed to the cardholder, but NCUA is liable for the purchase cards. Additionally, charges not directly related to travel expenses were considered suspect, NCUA officials said. For example, NCUA Director of Public and Congressional Affairs Cliff Northup said he recently charged a Radio Shack tape recorder to his card that may have been suspect because it was not a travel expense. NCUA expects a rewrite of its credit card usage policies and procedures to be out shortly. Additionally, office and regional directors have been instructed to raise the issue with staff, DeSarno said. NCUA’s basic procedures for purchase card purchases require 1) a purchase request/authorization; 2) supporting documentation; 3) payment authorization; and 4) vendor competition for transactions over $5,000. The study revealed 11 cardholders in violation of the 26 cards studied of the first step, plus several others with at least one violation. One cardholder had no supporting documentation for purchases; six had no payment authorizations, and another six did not have documentation of vendor competition for transactions over $5,000. In this last category, all other cardholders said it was not applicable to their situation. Bank of America has its policies, too: * Cardholders must use card exclusively for government related purchases. Failure to obey may result in revocation of the card and disciplinary measures under NCUA policy; * NCUA defines permissible purchases and personal purchases are prohibited; * Only the cardholder may use the card; * The cardholder is responsible for retaining all charge slips, register receipts, etc. and follow NCUA policies; and * The cardholder must request account changes within NCUA’s policies and procedures. NCUA Deputy Executive Director Mark Treichel said that some employees with travel cards felt that as long as they paid the bill, it did not matter what they purchased. However, the agreement with Bank of America explicitly states that they only want legitimate government purchases on the interest-free cards. Treichel said repercussions for abuse of the card depend upon the person’s job and the level of abuse and may include suspension or cancellation of the card. He added that no one has been fired yet for abuse of the credit card. The study was sparked by a General Accounting Office investigation this summer into purchase cards at Navy installations, which found serious violations. Many federal agencies, including NCUA, then began looking into card usage, and were subsequently asked by Senator Charles Grassley (R-Iowa) to perform internal reviews. NCUA also began quarterly reviews of card usage at the beginning of the summer, NCUA Chief Financial Officer Dennis Winans explained. -