OMB Chief Orders Tighter Controls Over Credit Cards

The memo is out.

As promised in the aftermath of a congressional audit showing misuse of government credit cards, the Office of Management and Budget has directed federal agencies to tighten their controls.

"OMB is extremely concerned with the incidences of charge card abuse by federal employees highlighted in GAO's report," Jim Nussle, the OMB director, wrote in a memo to agency heads on Tuesday.

The report by the Government Accountability Office, released last week, showed that government employees used their "purchase cards" in 2005 and 2006 to buy cameras, laptop computers, iPods, expensive suits, lingerie, and steak-and-booze dinners.

The GAO estimated that 41 percent of the credit card transactions were not properly authorized, and that agencies could not account for about $1.8 million worth of goods that employees may have diverted to personal use.

Nussle reminded federal agencies that they should have written policies and procedures for the appropriate use of charge cards and must report misuse to the OMB.

Because of the GAO findings, the OMB is revising its government-wide directive on the management of credit card programs, he said.

In the interim, Nussle told the agency heads to remind their employees that the use of "convenience checks" should be kept to a minimum. Convenience checks are issued as part of the government's credit card program. They are similar in appearance to personal checks and are written against a cardholder's account. The checks are supposed to be used to pay merchants who do not accept government credit cards.

The GAO found instances of misuse of the checks, such as an Agriculture Department cardholder who used the checks to embezzle about $642,000 over six years. The money was spent on gambling, car and mortgage payments, and retail purchases. A whistle-blower turned in the cardholder, who was sentenced to 21 months in prison and ordered to return the money.

Nussle also directed agency heads to develop specific disciplinary procedures, including dismissal, that can be imposed for fraud and other egregious abuse of credit cards by employees.

Despite the breakdown in internal financial controls, Nussle said the credit card program saved about $1.8 billion in fiscal 2007, in part by reducing paperwork and other acquisition costs.

"Overall, OMB believes misuse of the federal charge card is the exception rather than the rule and most federal employees are using government charge cards responsibly," Nussle wrote.

Parental Leave Bill Advances

A bill that would provide four weeks of paid parental leave to federal employees was approved yesterday, on a 21 to 10 vote, by the House Oversight and Government Reform Committee. The proposed leave was reduced from eight to four weeks in a subcommittee on Tuesday.

The bill was sent to the House floor over the objections of Rep. Darrell Issa (Calif.) and other Republicans on the committee. Issa contended that adding such a benefit would increase federal compensation costs by 1 1/4 percent and that this is the "wrong time" for Congress to grant such a benefit when the economy is sinking and some private-sector workers may be laid off.

But the bill's primary sponsor, Rep. Carolyn B. Maloney (D-N.Y.), said many Fortune 500 companies offer paid leave to mothers to care for newborns and for adoptions. She called the proposed benefit "long overdue," saying that federal employees should not be forced to choose between a chance to bond with their new child and a paycheck.

Rep. Henry A. Waxman (D-Calif.), the committee chairman, said the Congressional Budget Office will estimate the bill's possible cost before a vote by the House. He said that offering paid parental leave would help build a more committed federal workforce. Del. Eleanor Holmes Norton (D-D.C.) said such a leave would "show we want young people to come" into government.

Stephen Barr's e-mail address isbarrs@washpost.com.