Auditing and Investigating the Internal Control of Government Purchase Card Programs (Superseded by GAO-04-87G)
GAO-03-678G, May 1, 2003
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This publication has been superseded by GAO-04-87G, Audit Guide: Auditing and Investigating the Internal Control of Government Purchase Card Programs, November 2003. The federal government of the United States--the largest and most complex organization in the world--expended approximately $15 billion through federal organizations' purchase card programs in fiscal year 2002. As the steward of taxpayer dollars, federal agencies are accountable for how purchase cards are used and how the funds are spent. To that end, federal agencies are responsible for establishing and maintaining internal control to provide reasonable assurance that (1) the goals and objectives of the purchase card program are met and (2) safeguards against fraudulent, improper, and abusive purchases are adequate. Recent congressional testimony and Inspector General and GAO reports show that some federal agencies do not have adequate internal control over their purchase card programs. Without effective internal control, management has little assurance that fraudulent, improper, and abusive purchases are being prevented or, if occurring, are being promptly detected with appropriate corrective actions taken. A key element of internal control is monitoring that assesses the quality of performance over time and ensures that the findings of audits and other reviews are promptly resolved. Monitoring provides for regular management and supervisory activities, as well as evaluations by inspector generals or external auditors.
This guide focuses on audits of internal control activities--designed primarily to prevent or detect significant fraudulent, improper, and abusive purchases--in a government purchase card program. It is intended to provide practical guidance for consideration by internal and external auditors, investigators, and program management oversight personnel in assessing the adequacy and performance of those control activities, and identifying areas of internal control for potential improvement. This guide is based primarily on GAO's experiences in auditing and investigating internal control over federal government purchase card programs at the Departments of Defense, Education, Housing and Urban Development, and other federal agencies.