We audited the U.S. Department of Housing and Urban Development’s (HUD) administration of its purchase card program in accordance with the Charge Card Abuse Prevention Act of 2012.  Our 2013 risk assessment review identified HUD’s purchase card program at medium to high risk for fraud or misuse, and our review of HUD’s Semiannual Purchase Card Violation Report (audit memorandum number 2014-FO-0801) raised concerns regarding HUD’s internal controls over the purchases made within this program. The objective of the audit was to determine whether HUD evaluated and reported improper and potentially illegal uses of government purchase cards.

Purchase card transactions were generally supported. However, HUD did not evaluate a potential violation to determine whether it constituted a significant weakness and could have provided better transparency by reporting the potential purchase card violation in its reports to the Office of Management and Budget. Specifically, HUD did not evaluate or report a violation in which an employee made fraudulent purchases totaling $11,938 from August through October 2013.

We recommend that HUD revise existing procedures to include the evaluation of the impact of identified violations on HUD’s purchase card program controls and how violations will be reported.