Lingerie and iPods: 6 absurd gov’t purchases
July 3, 2008 by Shane BorerPosted in: "Would you want this person in Finance?", Auditing, Compliance, Fighting off fraud, Special report
Your company goes the extra mile to make sure its business expense paperwork is bulletproof. Someone ought to clue in IRS.
For as thorough as IRS can be with most business’ tax records, you’d think it’d have a rock-solid reimbursement policy in place. But according to the latest report by the Government Accountability Office (GAO), it looks like IRS and other agencies couldn’t possibly have a worse program.
The review of over a dozen departments between 2005 and 2006 found that 41% of $14 billion in credit card purchases — whether they were legitimate or questionable — didn’t follow proper reimbursement procedure. And if that weren’t bad enough, for purchases that were over $2,500 — all of which are supposed to require several levels of authentication — 48% were improperly received.
We know what you’re thinking: That’s a whole mess of improper reimbursements. But it wasn’t just for employees milking gas receipts or upgrading to four-star hotels. Here’s a list of our favorite purchases that we can’t believe didn’t raise an eye or two a little sooner:
- Army employees couldn’t properly account for 16 computer servers that totaled over $1.5 million. The servers were supposed to be both photographed and inventoried in the Army’s books, but GAO inspectors only found a picture of one of the servers.
- Over a six-year period, a Department of Agriculture employee wrote 180 convenience checks to her live-in boyfriend. A whistleblower notified the GAO, and the cardholder was sentenced to 21 months in prison and must pay back $642,000.
- A U.S. Postal worker charged $1,100 on his p-card to subscribe to pornographic and Internet dating sites. We know everyone deserves to find someone, but someone should’ve caught on sooner — the Internet charges were the only purchases made on the card for over a year.
- Another Agriculture employee circumvented agency policy to purchase a brand-new Toyota Land Cruiser. He split the $80,000 purchase up by writing three convenience checks. Adding insult to injury: The convenience checks added up to an additional $1,000 in fees.
- One NASA cardholder purchased two 60GB iPods at the request of his supervisor. The $800 might seem like small change compared to other purchases, but you can’t top the supervisor’s logic: The iPods were purchased to store only “official NASA information.” When GAO officials confiscated the devices, they were chock-full of personal photos, songs, videos — and engraved with the supervisor’s name and NASA logo.
- A State Department cardholder purchased $360 worth of women’s lingerie at “Seduccion Boutique.” When asked to justify her purchases, the cardholder claimed the “gear” was used for jungle training during a drug enforcement program in Ecuador. Makes sense to us — as long as it was camoflauge print.
What’s the most absurd purchase you’ve ever seen, whether on a company card or T&E reimbursement form? Let us know in the comments section below.
Tags: Business expenses, GAO, IRS, lingerie, NASA, P-cards, Reimbursements, T&E, Top Ten
July 3rd, 2008 at 6:15 am
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July 7th, 2008 at 1:28 pm
An employee once submitted kennel fees for boarding his dogs while on business travel. He had been with the company for several years and his position always required travel. Being the final reviewer for all expense reports, I denied the expense.
July 7th, 2008 at 2:00 pm
As Controller of an aircraft manufacturer I was sent an approved expense report from one of our accident investigators claiming several hundred dollars for false teeth.
Apparently the accident site was so gruesome that he vomited and somehow lost his teeth. He and his supervisor thought the company should pay him for a replacement set.
He didn’t get reimbursed.
July 7th, 2008 at 2:06 pm
Does anyone wonder why people have so little faith in the government? Did anyone get fired or reprimanded? Were any ones wages garnished to recover the mis-spent funds? Remember, these “public servants” are doing this with our money.
July 7th, 2008 at 2:11 pm
Julie, I had a similar issue. An employee submitted an expense report, it was not even a kennel, she just paid to her neighbor to watch her dog. I denied, but was told to pay because her supervisor approved it prior to the trip!
July 7th, 2008 at 2:27 pm
While I was office manager for an oral surgeon, a government (forest service) employee used her government card to guarantee payment for removing her daughter’s teeth. When payment by check was received the check was returned by the bank as being stopped. Employee ultimately lost her job and I assume, had to make restitution for using the card inappropriately. Vendors should help police this…and always question inappropriate purchases, as it is the “public’s” money, after all.
July 7th, 2008 at 2:53 pm
Art,
I’m with you on this one!
July 7th, 2008 at 3:27 pm
Unfortunately these individuals that work in these agencies don’t care. This is the attitude that you find in most workplaces. Art is correct with the statement that individuals don’t have any faith in our government because it’s the workers that have the “I don’t care” attitude. For the most part they have been in these positions for years and have became complacent with their duties, policies and regulations.
July 7th, 2008 at 5:38 pm
I’m surprised we have not made the national news but I live in Knox County and they have been investagating the County P-Card purchases for over a year now. Get this; one hundred and thirtyone people have P-Cards - no limits and no restrictions on what they buy. So far (and this is just a few), lobster lunch for four that included a secretary, a county commissioner, they forgot who number three was and number four was TO GO. Personal lunches and dinners (No food was supposed to be allowed unless they were traveling). Expense reports approved by themself (wouldn’t that be great!). A down payment was made for a cruize (she didn’t have enough credit on her own personal credit card) and on and on. The audit has taken over a year and only went back two years - I would hate to see how long it would take to audit the IRS.
July 8th, 2008 at 1:21 pm
Still, it all pales beside the costs in human and financial terms of the Iraqi conflict.
Or how about that $300 MILLION in CASH found hidden in Baghdad houses the first few weeks of occupation? Anyone ever track down how all those brand new bills made it to Iraq during a decade that it was illegal to export US currency there?
Speaking of which, does anyone know if the $1 TRILLION in “missing” oil income from the first year of occupation was ever recovered? Or even LOOKED for?
Or the “typographical error” which eliminated the contract paragraph from oil leases which provided for the US Government to receive payments per barrel if oil prices rose over $xx per barrel. “Accidentally” dropped during the first few years of this Century.
How much value has been stolen from currency holders due to inflation from war expenditures?
And despite all that money being spent, our troops have shoddy clothes, shoddy (or no) armor, unhealthy living conditions and will not have their chemical, biological or radiation injuries covered as “combat related” because “officially” there are no such hazards in the Iraqi combat zones.
“Government is the natural enemy of man.” - Thomas Jefferson
July 8th, 2008 at 5:01 pm
Mr. Barnard,
You’re absolutely right. Saddam should have been supported, he was such a decent guy.
“If there be any among us who would wish to dissolve this Union
or to change its republican form, let them stand undisturbed as
monuments of the safety with which error of opinion may be
tolerated where reason is left free to combat it.” –Thomas
Jefferson: 1st Inaugural, 1801.
July 9th, 2008 at 1:25 pm
Art,
There is some silver lining here — all of the infractions discovered in the audit were dealt with. The study doesn’t give a breakdown of how many employees were terminated or reprimanded, but most of the specific instances described include what steps were taken after.
So … some employees were terminated, some were imprisoned and must pay the money back and others might just get a slap on the wrist.
You can find the full report on GAO’s Web site:
http://www.gao.gov/new.items/d08333.pdf