(Susan Walsh/AP) (Susan Walsh/AP)

The Internal Revenue Service should be tougher on employees who abuse government travel cards, a new report from the agency’s watchdog says.

The Treasury Inspector General for Tax Administration brought more bad news for the tax agency, which is reeling from disclosures from his office that the IRS gave undue scrutiny to tea party groups applying for tax-exempt status.

Although the rate of abuse of travel credit cards is low at less than 1 percent compared with more than 4 percent across the government in fiscal 2011, Inspector General J. Russell George found that IRS managers are soft on violators who use the cards for personal use while they are away on government business.

When abuse is discovered, managers tend to be more lenient than internal IRS guidelines recommend, the inspector general wrote. When an employee is disciplined, the action does not always result in a review of the employee’s security clearance.

David Grant, chief of agency-wide shared services at the IRS, agreed with most of the inspector general’s recommendations, including a stricter reevaluation of employee security clearances when travel card abuse is found and a better system to monitor the expenses.  Grant said his staff already has made some changes, including daily limits on cash machine withdrawals.

The report follows another audit this month showing that employees in IRS’s tax-exempt organizations division singled out  conservative groups seeking tax-exempt status. The report has led to congressional hearings, a rebuke from President Obama and a probe by the FBI. The acting IRS commissioner was forced to resign, a top deputy is retiring early, and a third official was put on administrative leave.

Under federal law, misuse of a government-issued credit card meant to pay for travel includes using it for personal expenses, failing to pay the bill on time and buying from a merchant not authorized by the government.

The report said the IRS identified about 1,000 cardholders who abused their privileges in fiscal years 2010 and 2011, although the nature and scope of the misuse is not identified.

In all, the IRS travel card program had about 52,000 individual accounts covering $121 million in charges for fiscal year 2011, the report said.