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As required by the Charge Card Abuse Prevention Act of 2012, Public Law 112-194, we performed risk assessments of the U.S. Department of Housing and Urban Development’s (HUD) purchase and travel card programs.  In our risk assessments, we analyzed and identified the risks of illegal, improper, or erroneous purchases.  Using information provided by HUD, we assessed risk for eight different risk factors and ranked each risk factor as low, medium, or high, based on predetermined criteria.  We determined that the overall risk for both programs was low and at this time, an audit is not warranted.  However, we did identify areas of medium risk in which HUD could make improvements to strengthen its charge card controls related to three risk factors for the purchase card assessment and one risk factor for the travel card assessment.  

The risks in both programs centered around weaknesses in procedures and monitoring.  Specifically, in the purchase card program, the Office of the Chief Procurement Officer (OCPO) used and relied on an outdated policy implementation guide that did not reflect OCPO’s current processes and lacked standard operating procedures outlining the specific steps taken to execute the controls.  Further, the monthly monitoring review process did not always ensure that potential improper use transactions were cleared with adequate documentation.  In the travel card program, HUD program offices did not always follow up on potentially improper transactions identified by the Office of the Chief Financial Officer (OCFO) in a timely manner, and OCFO lacked the authority to act when reviews were untimely.  We also noted that HUD did not sufficiently monitor for employees who did not use their government travel card when required for official travel-related purchases.  

To improve its processes and oversight for the purchase card and travel card programs, we made recommendations to develop and implement policies and procedures in the areas that we assessed as medium risk.  While we assessed risks of illegal, improper, or erroneous purchases as low in both charge card programs, implementation of these recommendations will enhance and further strengthen HUD’s controls and oversight activities in this area.  

Recommendations

Key Details
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  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

Chief Financial Officer

  •   2024-FO-0005-001-A

    Develop a standard operating procedure for the monthly transaction review that aligns with the HUD policy and includes specific procedures on how to (1) identify and review common transactions that raise the level of risk in the program (for example, personal use purchases, other prohibited purchases, unauthorized purchases or services, split purchases, fraudulent purchases, FAR violation purchases, etc.), (2) methodically select transactions for investigation, and (3) follow up on identified potential improper transactions, including record-keeping requirements.

  •   2024-FO-0005-002-A

    Develop and fully implement a departmentwide policy for the monthly transaction review process that requires program office participation and timely completion of the review and certification.

  •   2024-FO-0005-002-B

    Update OCFO’s travel card monitoring procedures to obtain, review, and monitor the IBA Use report on a regular basis to ensure compliance with purchases required to be made on the government travel card.