Government procurement card controls ‘not strict enough’

1 June 2012

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1 June 2012 | Adam Leach

The controls around the use of government procurement cards are not adequate to deter fraudulent and inappropriate use and there is a lack of compliance within multiple departments, MPs believe.

The Government Procurement Card, published today by the Committee of Public Accounts (PAC), welcomed the introduction of a central policy outlining minimum standards on the use of procurement cards.

But it said variation in the adequacy and compliance with individual departmental policies meant MPs couldn’t conclude civil servants were spending public money using them suitably. It also proposed the Cabinet Office consider banning the use of the card to buy certain items, such as alcohol, across government.

Margaret Hodge, Labour MP and chairman of the Committee, said in a statement: “The controls currently applied to the use of the Government Procurement Card by civil servants and other public employees are not strict enough to deter and prevent inappropriate use.”

The Ministry of Defence (MoD) and the Department for Work and Pensions (DWP) came in for particular criticism from PAC. The report said: “The MoD told the Committee that it checks between 5-100 per cent of GPC transactions.”

The MoD said it decided to test a sample of transactions, as it had to make a judgement about the level of internal control versus the risk. The Committee said: “We are concerned that the balance is not appropriate here”. It asked for the MoD to explain how it undertakes risk profiling.

An MoD spokesman said: “The MoD frequently checks up to 100 per cent of transactions but it would be misleading to focus only on checks as all GPC spending is subject to other rigorous controls and we have a robust system to monitor and audit their use.”

It also raised concerns over the finding a third of DWP purchases had no receipts. A DWP spokesman said: "Many of our transactions are conducted online and would not routinely have a receipt or invoice. We always insist that there must be a record for every transaction made, including purchases where a receipt or invoice may not have been involved."

PAC called for the Cabinet Office to obtain assurances from accounting officers that its central code setting out minimum standards had been implemented, and ask departments consider where controls could be improved to reduce risks. It also said non-permanent members of staff should only be allowed to use procurement cards in “exceptional circumstances”.

Minister for the Cabinet Office, Francis Maude, said: “Properly used these cards can save the taxpayer money, and make fraud easier to detect, but we will not tolerate their abuse.”

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