The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s compliance with the purchase card program requirements for fiscal years 2017 and 2018 based on our risk assessment. Our audit objective was to determine whether HUD maintained accurate records of cardholders and transactions; HUD employees took purchase card training when required; and HUD purchase cards were used for illegal, improper, or erroneous transactions.
HUD did not have accurate and complete records of cardholders and transactions, including errors in cardholder closure dates, errors in training dates, inadequate tracking of merchant category code (MCC) overrides, and incomplete transactional data. In addition, purchase cardholders and approving officials did not always take purchase card training when required. Further, we identified 10 instances in which HUD purchase cards were used for improper purchases and incurred improper interest charges totaling $29,423.
We recommend that the Chief Procurement Officer (1) implement processes to periodically audit or reconcile the shared service provider’s records, (2) review hierarchies, (3) ensure that training is taken when required, (4) suspend cardholders or approving officials who fail to take training or repeatedly cause HUD to pay interest, and (5) research the incomplete monthly transactional data and identify a solution. In addition, we recommend that the Chief Procurement Officer (1) enhance the process to periodically analyze data for split transactions or improper MCCs, (2) improve notifications to employees, and (3) follow up on any potential issues identified.