An investigation by the inspector general of the General Services Administration found rampant abuse of an employee awards program of the agency’s Pacific Rim region, the same region that has come under fire for spending more than $800,000 on a Las Vegas training conference for 300 employees.

The report on the “Hats Off” employee recognition program, obtained by The Washington Post, found numerous violations of agency directives, theft and misuse of government purchasing cards in the maintenance of the awards program.

The inspector general found “significant control weaknesses in the Hats Off Program.”

The report found that in fiscal year 2009, Pacific Rim employees received $256 in awards and Public Buildings Service employees in the region averaged $328.

The budget for the program rose dramatically in recent years. In 2008, employees at the Pacific Rim region, which oversees federal property in California, Arizona, Nevada and the Pacific Islands, received $47,012 in gifts. The next year it increased to $211,842, then dropped to $134,596 by 2010. In 2011, the program issued $844 worth of awards.

Jeffrey E. Neely became acting commissioner of the region in January 2009, having been public buildings commissioner. Neely was placed on administrative leave for planning the Vegas training conference. Expenditures for the awards program dropped dramatically after the inspector general began his investigation.

The findings in the report include:

■ Employees associated with administering the Hats Off Program were in the top 10 of recipients.

■ Instances of employees swapping awards with each other and supervisors accepting items from employees.

■ One employee, whose name was redacted from the report, gave “out 635 awards to 113 individuals, totaling $3,175.”

■ The Pacific Rim region maintained an inadequate inventory system and meager security on the storage room that held the gift items.

■ Total employee awards exceeded GSA’s 4 percent cap on employee annual salaries. Awards for Region 9 employees also exceeded GSA’s limit of $99-per-item limit on gifts.

Five government-issued purchasing cards were used to make purchases for the online “Hats Off” store, the inspector general found. In four instances, holders split the purchases to circumvent the cards’ single-purchase limit, a violation of agency regulations.

Unidentified public building service card holders allowed others, including two student interns, to make purchases with the cards to buy items for the store, a violation of GSA regulations.

The employee awards program was founded in 2001 as a merit-based point system that would offer coupons that could be redeemed at the “Hats Off” store. Initially, prizes included GSA-stamped mouse pads and backpacks but eventually included electronic goods.

At the start of each fiscal year all non-supervisory employees received 40 virtual “hats” which would be given as peer-to-peer recognition. One virtual hat was worth about $5. Employees could not give hats to themselves, but the investigation found numerous instances of employees swapping hats with each other.

Items in the virtual store included 8G iPod Nanos (redeemable with 30 virtual hats) and Coby 7 Portable DVD Player Tablets (redeemable with 20 virtual hats).

The Pacific Rim region maintained a storage facility on the fourth floor of the Phillip Burton Federal Building in San Francisco. A former GSA employee said items could either be redeemed physically at the storage space, or through an online mall.

The report cited significant security lapses with the storage room. Too many people had access to the space, and administrators often gave out the code to the lock. The office of the inspector general was first alerted to improprieties in the Pacific Rims region’s Hats Off program after more than 40 iPods were found missing and reported to the Federal Protective Service of the Department of Homeland Security. A further inquiry by the inspector general found that 115 iPods valued at $20,000 were unaccounted for and possibly stolen.

The Pacific Rim region organized the 2010 conference that cost $823,000 and included penthouse suites, a clown and a mentalist. GSA Administrator Martha N. Johnson resigned last Monday following revelations of the conference, and two of her senior assistants were fired.

GSA has since terminated the Hats Off program, an agency spokesman said.

The public buildings subcommittee of the House Transportation and Infrastructure Committee, chaired by Rep. Jeff Denham (R-Calif.), will hold a hearing on GSA on April 19.

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