GAO: Energy must tighten purchase controls

"Lawrence Berkeley National Laboratory: Further Improvements Needed to Strengthen Controls Over the Purchase Card Program"

Energy Department labs did not follow procedures intended to protect the agency's purchase cards from abuse, according to the Government Accountability Office.

In four reports, GAO officials found several instances of noncompliance with procurement regulations governing the use of purchase cards at four DOE national laboratories. Problems included splitting purchases into two transactions to avoid price limits, and instances where purchasers were allowed to approve their own transactions.

Purchase cards work similar to credit cards and were aimed at cutting bureaucratic cost and paperwork.

GAO's reports, which focused on the Lawrence Livermore, Sandia, Lawrence Berkeley and Pacific Northwest laboratories, urged Energy officials to tighten controls over the cards. The reports' recommendations have the backing of House Science Committee Chairman Sherwood Boehlert (R-N.Y.)

GAO Auditors urged Energy officials to maintain a paper trail of transactions by keeping all receipts. And they should preserve the independence of the approval process by requiring someone other than the purchaser to approve a transaction, the reports state.

In examining Lawrence Berkeley, GAO auditors found improprieties with $326,396 of the review period's $24 million in purchase card activity. The report acknowledges that is a relatively small amount of transactions to run afoul of proper procedures, but it states that weak internal controls could leave the labs vulnerable to greater exploitation.

Lawmakers requested an investigation of purchase card procurement procedures at DOE's national laboratories in December 2002 following allegations of misuse of the cards, particularly at Los Alamos National Laboratory.

"The GAO recommendations are logical and I urge DOE and its contractors to swiftly adopt them," Boehlert said. "The science committee will continue to exercise close oversight of DOE's procurement processes, and we look forward to working with DOE on the implementation of GAO's recommendations."

In their formal response to GAO, laboratory officials generally agreed with auditors' recommendations.