Federal Credit Cards Misused

Postal Service spokesman Gerry McKiernan said the dinner was held to entertain large postal customers who were already in Florida for another conference, and actually saved money because it combined four events into one. He also defended the payments for alcohol.

"When you're having dinner with customers, it's normal to have a drink," McKiernan said.

In another case at the State Department, a cardholder spent $360 at the Seduccion Boutique in Ecuador to buy "women's underwear/lingerie for use during jungle training by trainees of a drug enforcement program." The report does not include further details, but it says a State Department official "agreed that the charge was questionable."

The GAO found that 41 percent of the transactions it examined did not follow government purchasing rules. The problem was worse with larger purchases: Forty-eight percent of transactions over $2,500 were in violation of federal rules, the report said.

Levin said in a statement that "although internal controls over government credit cards have improved, we still have a long way to go to stop the fraudulent use of these cards."

In a written response to GAO, acting Controller Danny Werfel of the Office of Management and Budget said the administration "is extremely concerned with the incidences of purchase card abuse highlighted in GAO's report," and said it has agreed to increase oversight to lower the number of problems.

OMB spokeswoman Jane Lee also said the White House supports proposed Senate legislation aimed at reducing "inappropriate purchase card transactions." The Government Credit Card Abuse Prevention Act would require regular audits and other steps to cut down on credit card fraud and abuse.