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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.

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Tags: Business expenses, GAO, IRS, lingerie, NASA, P-cards, Reimbursements, T&E, Top Ten