Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts

Audit Report 06-36
September 2006
Office of the Inspector General


Appendix III
Responses to the Draft Report


We provided a draft audit report to the components involved for review and comment. The JMD, as DOJís Agency Program Coordinator, responded to the draft report as well as 7 of the 8 components we audited. The CRS deferred its comments to JMD, as the DOJ component responsible for the purchase card program for the OBDs. All the responses are incorporated into this appendix. Appendix IV contains the OIG analysis of each response, and a summary of actions necessary to close the report.

EOUSA RESPONSE
DEA RESPONSE
FBI RESPONSE
BOP RESPONSE
  ATF RESPONSE
USMS RESPONSE
OJP RESPONSE
JMD RESPONSE


EOUSA RESPONSE TO THE DRAFT AUDIT REPORT



  U. S. Department of Justice

Executive Office for United States Attorneys
 


Office of the Chief Operating Officer

Operations
Room 8105, Bicentennial Building
600 E Street, NW
Washington, DC 20530




July 28, 2006





(202) 616-6600
FAX (202) 305-1706

Troy M. Meyer, Regional Audit Manager
Washington Regional Audit Office
Office of the Inspector General
U.S. Department of Justice
1300 North 17 th Street, Suite 3400
Arlington, VA 22209

Dear Mr. Meyer:

We have reviewed the draft audit report - Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts. Per our discussion today, two of the recommendations require our response, as follows:

    Recommendation No. 1:  Ensure that cardholder profiles are updated and a maximum ratio of 7 cardholders to 1 AO is maintained.

    The Justice Management Division (JMD) issues purchase cards to all Executive Office for U. S. Attorneys (EOUSA) and United States Attorneys Office cardholders. JMD also maintains cardholder profiles. We will support JMD in the profile update process.

    Although EOUSA agrees with the maximum ratio of 7 cardholders to 1 AO, published JMD guidance on the maximum ratio continues to be 15:1. Hence, the option to have that ratio still exists. We have, therefore, updated our United States Attorneys’ Procedure

    No. 3-13.100.001(M) to read as follows:

    Approving Official (AO) is responsible for ensuring that the transactions placed on purchase cards under their purview were for bonafide official government purposes and that funds were available. A maximum of 7 cardholders to 1 approving official is recommended, and under no circumstances shall the ratio exceed 15:1.

    Recommendation No. 2:  Reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining required supporting documentation.

    EOUSA agrees. We have updated our Purchase Card USAP (cited above) and today have sent an email to all USAO Administrative Officers asking they require cardholders read the updated guidance.

    If you require further information or documentation, please call me on 202.616.6600.

Sincerely,


David W. Downs
Chief Operating Officer



DEA RESPONSE TO THE DRAFT AUDIT REPORT



  July 28, 2006



MEMORANDUM

TO: Troy M. Meyer
Regional Audit Manager
Washington Regional Audit Office
Office of the Inspector General
 
FROM: Douglas N. Biales
Chief
Executive Policy and Strategic Planning Staff
 
SUBJECT: OIG Draft Report Response:  Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts
 

The Drug Enforcement Administration (DEA) has reviewed the Department of Justice (DOJ) Office of the Inspector General’s (OIG) Draft Report entitled, Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts. DEA provides the following response to recommendations 1 and 2.

OIG Recommendation 1:  Ensure that cardholder profiles are updated and a maximum ratio of 7 cardholders to 1 AO is maintained.

DEA Response:  To ensure that cardholder profiles are accurate, updated, and maintained, the Purchase Card Program has been decentralized throughout DEA field divisions, laboratories, and foreign offices. There are four domestic and five foreign hierarchy levels that have been established. Each hierarchy level documents the position responsibilities that ensure compliance with program policies. The hierarchy levels are documented in DEA’s Purchase Card Handbook. In addition, the Local Agency Program Coordinator (LAPC) and Purchase Card Approving Official (PCAO) have been instructed, in accordance with the DEA Purchase Card Handbook, to ensure cardholder profiles are current and that the maximum ratio of cardholders to Administrative Officer’s (AO) is observed in establishing new accounts. Chapter 2, sections 2-5, of the DEA Purchase Card Handbook, states that additional cardholders may be added to an existing PCAO, but normally not to exceed seven cardholders per PCAO. Furthermore, a DEA Purchase Cardholder Account form is used to establish a purchase card holder account. This form is also used to facilitate the accuracy of cardholder profiles. When there is a change in an APC, PCAO, LAPC, or their contact information, a new account form is submitted to the headquarters program coordinator to document and memorialize the change. Copies of all Purchase Card Account forms are maintained by the APC at headquarters for future auditing purposes.

OIG Recommendation 2:  Reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining required supporting documentation.

DEA Response:  Since the initiation of the DEA Purchase Card Program, management controls and restrictions have been established and implemented on the types of purchases that can be made under the Purchase Card Program by restricting certain Merchant Category Codes. These restrictions have been issued in a Purchase Card Flash, which is an internal email news and policy notice. Purchase Card Flash notices are issued to LAPCs for local distribution to all card holders and are posted on DEA’s intranet website. This Purchase Card Flash, dated December 2005, has also been included in section 1-4.4 in DEA’s Purchase Card Program Handbook. Should a cardholder attempt to make a purchase from a restricted merchant, the purchase is declined by software at the point of sale, because all DEA purchase cards are coded to reject a particular Merchant Category Code. The list of restricted Merchant Category Codes is reviewed annually and new codes are added or changed to meet the needs of DEA customers and operations. Also contained in the Purchase Card Handbook are the requirements to document the availability of funds before a purchase can be made with a purchase card, and the importance of retaining required supporting documentation for each purchase.

Based on established DEA policy and the information provided herein, DEA is in compliance with the stated recommendations and requests that they be closed. If you have any questions regarding this information, please contact Janice Hewitt, Audit Liaison, at 202-307-5411.

cc:

Michele M. Leonhart
Deputy Administrator

Richard P. Theis
Director, Audit Liaison Group
Management and Planning Staff



FBI RESPONSE TO THE DRAFT AUDIT REPORT



  August 7, 2006


Mr. Troy M. Meyer
Regional Audit Manager
Washington Regional Audit Office
Office of the Inspector General
U.S. Department of Justice
1300 North 17th Street, Suite 3400
Arlington, VA 22209

Dear Mr. Meyer:

In accordance with the audit entitled "Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts," the response from the Federal Bureau of Investigation (FBI) is as follows:

Reference: Draft Audit Report - First paragraph - Page 7

The FBI takes exception to the dollar value of $19,374, indicated in regards to the absence of supporting documentation associated with the referenced transactions. Separate and independent discussions regarding this issue were held at the request of the FBI on June 22, 2006, at FBI Headquarters with the Office of the Inspector General's (IG) Audit staff and, again, immediately following the DOJ exit conference held on June 27, 2006.

Baton Rouge Police Supply:

In order to furnish appropriate gear and equipment for FBI employees, a Blanket Purchase Agreement (BPA) was established by Contracting Officer Theresa M. Powell, who was temporarily deployed from FBI Headquarters to on site in Baton Rouge, LA, responding to the need for emergency purchases resulting from Hurricane Katrina. The BPA arrangement established a list of approved items that would be made available to FBI employees on an "as needed" basis. The IG Audit staff claims that the four invoices provided did not correspond to the amount of $15,700.97, shown as "expended" by the FBI. The FBI explained to the IG Audit staff on June 22, 2006, that the amounts provided to the IG Audit staff were budgetary amounts, not actual expenditures. An estimate of $15,700.97 was provided to FBI Headquarters by Ms. Powell for anticipated expenditures against this BPA.

The FBI provided invoices for all except two of the purchases made during the period of audit against the established BPA (Invoice, dated 10/03/2005, in the amount of $1,235.00 and invoice, dated 10/04/2005, in the amount of $71.98, for a total of $1,306.98 were not provided). Additionally, two other charges for convenience check fees of $1.50 each were included in CO Powell's statement for Baton Rouge Police Supply and this was explained to the IG Audit staff. This is an administrative fee charged by JP Morgan Chase whenever a convenience check is utilized. An invoice/receipt is not provided other than the charge appearing on the account holders' monthly statement. Regarding the two invoices totaling $1,306.98, the FBI has attempted to obtain those invoices; however, Baton Rouge Police Supply has advised that they are in storage. The FBI will continue efforts to obtaining the remaining two documents. The IG Audit report should be changed to reflect the correct unsupported amount of $1,306.98 for this item.

Merchandise Distributors:

Ms. Powell solicited quotes to fill a requirement for 750 batteries. A quote in the amount of $3,673.30 was obtained from GSA Advantage via the internet. Due to the size of the order, multiple shipments were provided from multiple distribution points. All items were shipped and subsequently, billed to Ms. Powell's government purchase card. The purchase card statement associated with this purchase correctly reflects the amount quoted electronically of $3,673.30. The IG Audit staff requested Ms. Powell to provide a copy of the invoice associated with the purchase. When Ms. Powell attempted to obtain an invoice from GSA Advantage from the electronic website, the invoice reflected a price of $3,710.45 - a price slightly higher than the price quoted and charged to Ms. Powell's purchase card account. Ms. Powell believes that she was provided a discount at the time she ordered the batteries. Regardless, since the invoice is higher than the quote (the binding document) and Ms. Powell's purchase card was charged the quoted price, the FBI does not understand why this is an issue with the IG Audit staff. Nevertheless, the difference is only $37.15. The IG Audit report should be changed to reflect this amount if mentioned at all.

Based on the above, the total discrepancy (unsupported) amount for both of these purchases is $1,344.00 rather than the $19,374.00 represented in the draft report. In both cases, there is no evidence of poor record keeping or lack of internal controls.

Also note, no mention is made in the draft report that Ms. Powell is a senior Contracting Officer and has vast experience and knowledge in handling such catastrophic events as Katrina. Ms. Powell has been deployed in an identical capacity during the Oklahoma City bombing of the Federal Building, the hostage situation in Waco, Texas, the Egypt Airplane crash in New York, the Louisiana Prison Riots and the Eric Rudolph case. In all deployments, Ms. Powell has not only provided excellent logistic and mission critical support, but has done so by positioning herself at the front line of the events. The IG auditors reviewed documentation for over $1.8 million dollars in transactions primarily purchased by Ms. Powell, with $1,344.00 arguable, unsupported. It should be noted that this type of disaster, deployment procedures are considered a best practice. Employee caliber, experience and constant communication with key FBI Headquarters' programs and functions are essential components of a successful operation. These practices employed by the FBI should be mentioned in the report.

RECOMMENDATIONS STATED IN THE AUDIT REPORT

1) Ensure that cardholder profiles are updated and a maximum ratio of 7 cardholders to 1 approving official is maintain.

Response:  The FBI agrees with this recommendation.

Comments:  The FBI is aware of the cardholder to Approving Official ratio mandated by OMB Circular A-123. Noncompliance with this policy is not based on poor management of the Purchase Card Program but rather, substantial growth of the program with the addition of approximately 300 new cardholders each fiscal year. The program manager's mission has been diverted and focused on meeting the mission critical needs of the employees. The purchase card is a vital procurement tool for the end user and is an effective and efficient method of streamlining the acquisition process.

The FBI's current organizational and hierarchy structure, card distribution, locations and management sources will be reviewed to determine the most feasible assignment of cardholder to Approving Official. Guidance, direction and support will also be solicited from the DOJ Program Office to meet this goal. Based on discussions between Mr. Harold Belcher (DOJ) and Mr. Troy Meyer (OIG), the FBI will address the ratio for nine divisions with transaction counts that exceed 300 per month. Additional Approving Officials for these nine divisions will be identified and established by December 30, 2006. This process would include identification of appropriate Approving Officials, assignment of cardholders and appropriate training.

2) Reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds and the importance of retaining required supporting documentation.

Response:  See response to recommendation #3 below.

3) Institute required purchase card refresher training.

Response:  The FBI agrees with this recommendation.

Comments:  Again, while the FBI is making every effort to meet this need, it does not currently possess adequate resources, training facilities, and training/travel funding to meet this requirement. The FBI's policy is to provide face-to-face training of all new cardholders. Attendees are issued a Government Purchase Card as well as appointed as a warranted contracting officer for the purchase card only. Where space and funding permits, existing cardholders may attend this same training course to obtain refresher training. In addition, the FBI cannot take advantage of Internet-based training products such as offered by GSA.gov, due to the fact that we operate under a closed, secure computer network environment. Connection to the outside world/Internet is available on a very small scale and in most cases, a single stand-alone Internet terminal must be shared by approximately 30 employees. Investigative operations would, of course, take priority in utilizing such limited technical resources.

Realizing this dilemma, the FBI's Program Office has issued a task order in 2005, under an existing contract, to build a database primarily to address the Acquisition Workforce initiative issued by OMB. An extension of this end product would include Contracting Officer, COTR, and purchase card user information as well as building contracting and P-card training modules and issuing warrant letters and certificates. We are currently in the database structure and prototype stages of this effort and do not foresee the training modules to be available for another 18-24 months.

In the interim, the FBI will continue to pursue alternate methods of providing the required refresher training. Again, the FBI will work in concert with the DOJ Program Office to meet this goal and objective. Discussions were held between Mr. Belcher and Mr. Meyer the week of July 24, 2006, which resulted in the following schedule.

Cardholders requiring Refresher Training - approximately 1,367

Training of Field Approving Officials - 56 by November 1, 2006

Field Approving Officials to train cardholders - 1,050 by April 1, 2007.

Training of HQ Approving Officials - 33 by March 1, 2007

Training of HQ Cardholders - 317 by June 1, 2007

Validation of this training will be provided to both DOJ and OIG in appropriate format (copies of sign-in registers, training date, etc.) shortly after each event.

As a footnote to this issue, it should be noted that the FBI's cardholder to Approving Official ratio for the Hurricane Katrina deployment effort was one-to-one.

APPENDIX II - INTERNAL CONTROL ISSUES

Finding:  Cardholders were unaware they were precluded from purchasing certain items with the purchase cards.

Comments:  The FBI is confused by this finding/statement. Immediately following the exit conference held on June 27, 2006, the FBI requested the IG Audit staff to provide additional information so this Finding could be immediately addressed by the FBI. The response provided by the IG Audit staff to this request was that, "several" employees could not identify prohibited items. Such a response is unacceptable as it does not permit the FBI to resolve the issue. As a follow-up to this Finding, the FBI P-card Program Manager contacted all of the employees selected by the IG Audit staff for potential interview during the audit. All of these employees emphatically stated that such a question was never asked of them. The FBI's purchase card training covers the issue of "precluded purchases." FBI internal audits of cardholder purchases has never disclosed such a problem. The FBI requests the IG Audit staff to support this finding so the FBI can adequately address this finding by providing the name(s) of the individuals so they can receive additional training or P-card revocation.

Current Do Not Buy List:
As defined by GSA Smart Card Program:

  1. Long term lease of land or buildings
  2. Travel or Travel related expenses
    May be used for meeting spaces, local transportation services, Metro fare cards, subway tokens, etc.
  3. Cash Advances

As defined by the FBI:

    Weapons (P-card may be used as a payment mechanism for Contract Invoices).

The FBI will keep the DOJ/OIG advised as to the resolution of the Approving Official to Cardholder ratio as well as the progress of the required refresher training. We appreciate having the opportunity to discuss and resolve these issues with your office.

Sincerely yours,


Kevin L. Perkins
Assistant Director
Chief Financial Officer



BOP RESPONSE TO THE DRAFT AUDIT REPORT



  U. S. Department of Justice
Federal Bureau of Prisons
PROGRAM REVIEW DIVISION

Washington, DC 20534
July 31, 2006


MEMORANDUM FOR TROY M. MEYER, REGIONAL AUDIT MANAGER
WASHINGTON REGIONAL AUDIT OFFICE
OFFICE OF THE INSPECTOR GENERAL
 
FROM: Michael W. Garrett Senior Deputy Assistant Director
 
SUBJECT: Response to the Office of Inspector Generalís (OIG) Draft Audit Report: Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts
 

The Bureau of Prisons appreciates the opportunity to respond to the recommendations from the OIG’s report entitled Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts.

Please find the Bureau’s response to the recommendations below:

Recommendation #1:  Ensure that cardholder profiles are updated and a maximum ratio of 7 cardholders to 1 Approving Official (AO) is maintained.

Response:  The Bureau concurs with the recommendation to ensure cardholder profiles are updated. On June 21 and 22, 2006, the National Agency Program Coordinator forwarded an E-mail to each local Agency Program Coordinator (APC) requesting all cardholder profiles be updated by July 20, 2006. In addition a memorandum (attached) from the Bureau’s Procurement Executive was sent to all APCs, AOs, and credit card holders reminding them of this requirement. The Bureau also concurs with the recommendation to maintain a maximum ratio of 7 cardholders to 1 AO. The Bureau will continue to maintain this ratio and has included this requirement in the attachment. We anticipate corrective action will be completed by July 20, 2006. We request this recommendation be closed.

Recommendation #2:  Reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining required supporting documentation.

Response:  The Bureau concurs with this recommendation. As stated in recommendation 1, the attached memorandum was forwarded to remind staff of Bureauwide credit card policies. These policies are also reinforced during credit card refresher training every three years. We request this recommendation be closed.

If you have any questions regarding this response, please contact me at (202) 616—2099.

Attachment



ATF RESPONSE TO THE DRAFT AUDIT REPORT



  603010:CGC
8310


MEMORANDUM TO: Assistant Inspector General for Audit
 
FROM: Assistant Director (Office of Professional Responsibility and Security Operations)/CSO
 
SUBJECT: Draft Audit Report Ė Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts
 

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) appreciates the opportunity to respond to the recommendations from the Office of the Inspector General’s (OIG) above-cited draft report. We appreciate this independent evaluation process to help us improve our ability to effectively plan and manage our resources more efficiently.

In general, ATF concurs with the findings and recommendations of this report. Our responses to your recommendations are as follows:

Recommendation 1 – Update cardholder profiles and maintain a maximum ratio of seven cardholders to one Authorizing Official (AO).

ATF Response – ATF does not have all of its approving officials listed in Pathway, the financial automated tracking system for purchase card transactions. To maintain uniformity in the Pathway data, and to reduce the administrative burden of maintaining this data in the system, ATF listed its hierarchy levels 2 and 3 approving officials in Pathway, not its hierarchy level 4 approving officials, which would include the field office supervisors. ATF is in the process of updating its manual listings to identify its approving officials by position in the Bureau and clarifying its policies and procedures in that area. ATF anticipates that it will complete the process by the end of this calendar year (CY).

Recommendation 2 – Reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining required supporting documentation.

ATF Response – ATF will reinforce policies on what items are not allowed to be purchased with the charge card, the requirement to document the availability of funds, and the importance of retaining required supporting documentation. It will achieve this goal through an update of the Bureau order on card usage, refresher training, postings to the appropriate Bureau intra-web pages, and reminders issued to cardholders.

Recommendation 3 – Institute required purchase card refresher training.

ATF Response – ATF will institute required purchase card refresher training. The Bureau is currently contacting the Executive Office for United States Attorneys, the Bureau of Prisons, the Drug Enforcement Agency, and the Criminal Division, as well as other Federal departments and agencies to see if these organizations have existing refresher training. If ATF can use another component’s refresher training, the training process for all cardholders would be greatly accelerated, and a cost-saving to the Government would occur. As an interim step, ATF will require all of its cardholders with purchasing authority to retake the GSA web based training by the end of CY 2006.

Should you have any questions or require additional information concerning this response, please contact Ms. Carol Campbell, Chief, Audit and Evaluation Branch, at (202) 927-8276.




Richard E. Chase



USMS RESPONSE TO THE DRAFT AUDIT REPORT



  U. S. Department of Justice
United States Marshals Service
Business Services Division
Procurement Office



July 28, 2006

MEMORANDUM TO: Guy K. Zimmerman
Assistant Inspector General for Audit
 
FROM: Anita Maldon
Procurement Chief
 
SUBJECT: Draft Audit Report Ė Department of Justice Purchase Card
Expenditures Related to Hurricane Recovery Efforts
 

As requested, attached is the United States Marshals Service response concerning recommendations of the subject draft audit report dated June 30, 2006.

Should you have any questions or concerns regarding this response, please contact Yvonne Athanasaw, Audit Liaison, at (202) 305-8811.



Attachment






USMS Response to Draft Audit Report
Department of Justice Purchase Card Expenditures
Related to Hurricane Recovery Efforts


Recommendation 1:  Ensure that cardholder profiles are updated and a maximum ratio of 7 cardholders to 1 AO is maintained.

USMS Response:  USMS agrees with this recommendation and will issue a reminder to all cardholders and Approving Officials (AO) that emphasizes the importance of: ensuring cardholders’ profiles are updated and maintaining a maximum of 7 cardholders to 1 AO. Completion date: August 30, 2006.

Recommendation 2:  Reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining required supporting documentation.

USMS Response:  USMS agrees with this recommendation will issue a reminder to all cardholders and AOs that reinforces the need for adherence to existing policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining supporting documentation. Completion date: August 30, 2006.

Recommendation 3:  Institute required purchase card refresher training.

USMS Response.  USMS agrees with this recommendation and will institute the requirement for purchase card refresher training. Completion date: August 30, 2006.



OJP RESPONSE TO THE DRAFT AUDIT REPORT



7/31/06

******* Text of OJPís Response *********

  1. We recommend that OJP ensure that cardholder profiles are updated and a maximum ratio of 7 cardholders to 1 AO is maintained.

    The OJP agrees with the recommendation. By September 30, 2006, the Office of Administration, Acquisition Management Division (AMD) will conduct a review of existing cardholders profiles to ensure that the profiles are updated, and will implement procedures to ensure that the profiles are periodically reviewed and updated accordingly.

    The OJP agrees with the recommendation. The OJP’s policy is to maintain a cardholder-to-approving official-ratio of no more than two cardholders per office per approving official, except for the Office of Administration’s AMD. The Acquisition Management Division’s ratio has five cardholders within the office under one approving official because they are responsible for making purchases for all of OJP.

  2. We recommend that OJP reinforce policies on what items are not allowed to be purchased with purchase cards, the requirement to document the availability of funds, and the importance of retaining required supporting documentation.

    The OJP agrees with the recommendation. In June 2006, OJP conducted purchase card refresher training to cardholders and approving officials, which covered various types of allowable and unallowable purchases, the requirement for maintaining records to track the availability of funds under bulk-funded requisitions, and the type of documentation that should be maintained to support purchases. By December 31, 2006, OJP will provide another refresher training and distribute additional guidance to all cardholders and approving officials reinforcing the specific highlights of the purchase card policy.

  3. We recommend that OJP institute required purchase card refresher training.

    The OJP agrees with the recommendation. As stated in response to Recommendation 2, OJP will provide another purchase card refresher training by December 31, 2006. In the future, purchase card refresher training will be provided every two years at OJP.

Thank you for your continued cooperation. If you have any questions concerning this response, please contact LeToya A. Johnson, OJP Audit Liaison, on 202-514-0692.

cc:

Beth McGarry
Deputy Assistant Attorney General
   for Operations and Management

Phillip Merkle, Director
Office of Administration

LeToya A. Johnson, Director
Program Review Office



JMD RESPONSE TO THE DRAFT AUDIT REPORT



  U. S. Department of Justice
Justice Management Division
Management and Planning Staff

Washington, D.C. 20530


July 21, 2006

Mr. Troy M. Meyer
Regional Audit Manager
Washington Regional Audit Office
Office of the Inspector General
U.S. Department of Justice
1300 North 17th Street, Suite 3400
Arlington, VA 22209

Re: Office of the Inspector General (OIG) audit: “Department of Justice Purchase Card Expenditures Related to Hurricane Recovery Efforts

Dear Mr. Meyer:

We propose that the Department’s components submit consolidated responses to the above referenced report, as we explained to you during our phone conference of this morning. A consolidated response will allow us to establish a corrective action plan that will included definitive milestones and measurable results and which, consequently, will allow us to close them in a timely manner.

We propose to take the following actions:

  1. The Procurement Policy and Review Group (PPRG) will issue a Procurement Guidance Document (PGD) requiring that all bureaus have no more than 7 cardholders per Approving Official and that cardholder profiles be updated in Pathway not later than three working days after any changes occur.

  2. The PPRG will work with the bureaus’ Agency Program Coordinators (APCs) and develop a list of what items should not be bought with purchase cards, a “do not buy” list. Also, the PPRG will work with the bureaus and develop minimum documentation requirements for purchase card files. We, then, will issue a PGD to specify the minimum documentation to be maintained in purchase card files. The “do not buy” list will be incorporated as an attachment to the PGD and we will require that the “do not buy” list be sent to current cardholders and included in materials provided to cardholders as part of their training. The PGD will require that the “do not buy” list be redistributed whenever it is updated.

  3. The OIG recommended that bureaus institute required purchase card refresher training. We propose to satisfy this recommendation in a number of ways. First, you should note that Appendix B to OMB Circular A-123 requires cardholders, approving or certifying officials, and APCs to receive initial training in the performance of their duties, and also refresher training every three years. The “Charge Card Management Plan” that the Department submitted to OMB pursuant to Appendix B, addresses training requirements and requires purchase card program participants to complete refresher training within 3 years of appointment. The PPRG will meet with the bureaus and assess how they can best meet the refresher training requirements of Appendix B and the OIG audit. The results will be shared with the OIG. Further, the PPRG will provide copies of the Department’s Charge Card Management Plan (CCMP) to the bureaus as an attachment to a PGD. That CCMP will specify the minimum requirements for charge card programs within the Department.

The foregoing described work will begin immediately. The PPRG will meet with the bureaus within 10 days of this letter, or sooner if possible, to develop a “do not buy” list, to set the minimum documentation requirements for purchase card files, and to chose dates by which the bureaus should restructure their hierarchy so that no more than 7 purchase cardholders report to an approving official. Further, and at that meeting, the participants will begin to establish the process whereby refresher training for purchase card program participants can be delivered, especially for those who have not received such training within the previous 3 years.

We believe circumstances will help us fully address all the recommendations before the end of the calendar year. Most important, all DOJ purchase cards will be reissued in late October 2006. At that time, the purchase card hierarchies will be reviewed and updated. It should not be difficult to supplementing that exercise with the tasks needed to close these recommendations.

We believe it is in the best interests of the Department to proceed in this manner to implement and close the recommendations contained in the audit. However, development of a more thorough and comprehensive corrective action plan will take additional time. We respectfully request to meet with the OIG in about thirty (30) days for the purpose of agreeing to milestones and specific dates for their completion.

Sincerely,


[Original Signed]


Richard P. Theis
DOJ Audit Liaison
Justice Management Division




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