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| FILE - This file photo taken March 2, 2013, shows the Internal Revenue Service building at the Federal Triangle complex in Washington. Poor oversight by the Internal Revenue Service allowed workers to use agency credit cards to buy wine for an expensive luncheon, dorky swag for managers' meetings and, for one employee, romance novels and diet pills, an agency watchdog said Tuesday, June 25, 2013. |
WASHINGTON
(AP) -- Poor oversight by the Internal Revenue Service allowed workers
to use agency credit cards to buy wine for an expensive luncheon, dorky
swag for managers' meetings and, for one employee, romance novels and
diet pills, an agency watchdog said Tuesday.
Two
IRS credit cards were used to buy online pornography, though the
employees said the cards were stolen. One of the workers reported five
agency credit cards lost or stolen.
IRS
employees used agency credit cards to make more than 273,000 purchases
totaling nearly $108 million in 2010 and 2011, according to the report
by the Treasury inspector general for tax administration.
The
vast majority of those purchases were legitimate, the report said.
However, the report said the IRS has inadequate controls to prevent
inappropriate purchases.
For example,
investigators found that one IRS employee spent $2,655 on diet pills,
romance novels, steaks, a smartphone and baby-related items, including
bottles, games and clothes. The case was referred to the IG's office
that investigates employee misconduct, the report said.
Among other "improper" purchases identified by the inspector general:
-
$3,152 to rent a popcorn machine and to buy prizes for an employee
event, including bandanas, stuffed animals, sunglasses and stovepipe
hats.
- $418 for novelty decorations and swag
at managers' meetings, including kazoos, bathtub toys and "Thomas the
Tank Engine" wristbands.
- $119 for Nerf footballs that were never used and were found stored in a filing cabinet.
"Inadequate
procedures to identify, report and address inappropriate use leaves the
IRS purchase card program vulnerable to repeated violations of
applicable laws and regulations," said J. Russell George, the Treasury
inspector general for tax administration.
The
report comes as the IRS faces intense scrutiny over agents targeting
conservative groups for additional scrutiny when they applied for
tax-exempt status. Documents released Monday show that liberal and
progressive groups were singled out, too.
Also,
the inspector general released a report earlier this month that
detailed lavish spending at employee conferences. In all, the agency
spent nearly $50 million on employee conferences from 2010 through 2012.
"Clearly,
any inappropriate card use impacts our bottom line and is cause for
concern," said acting IRS Commissioner Danny Werfel, who took over the
agency last month. "Wasteful spending cannot be tolerated, and any
employees found to be abusing the system will be held accountable. In
fact, we are following up on several inappropriate incidents mentioned
in the report, ranging from internal actions to criminal charges."
"That
said, more than 99.75 percent of IRS purchases adhered to the rules,"
Werfel added. "The IRS has made important progress over the past two
years in strengthening the controls in our purchase card program. We are
committed to protecting taxpayer resources, and we will take quick
action to implement all of TIGTA's recommendations."
The
new report highlighted a 2010 conference in Washington for tax
officials from other countries. At a luncheon, the IRS bought 28 bottles
of wine - for 41 guests, the report said. A dinner at the conference
cost the agency $140 a person, four times the allowable government rate
at the time.
In all, the agency spent more
than $50,000 on meals, receptions and meetings at the five-day
conference, the report said. Agency credit cards were used for about
$12,500 of the purchases.
"It is important to
note that the luncheon described in the report took place in 2010 for an
international business meeting of tax officials from several of the
world's largest countries. This meeting is an important forum for
international leaders on major tax issues," Werfel said. "However, given
the excessive purchases for the luncheon, I am directing the IRS
business units to more closely review spending in advance for any
similar events to ensure all spending is appropriate."
The
IRS participates in the General Services Administration's SmartPay
purchase card program. Under the program, agency employees can use
purchase cards, which act like credit cards, to buy work-related items.
The maximum amount for an individual purchase is $3,000.
More expensive items are subject to competitive pricing policies.
In
2010 and 2011, internal controls at the IRS found 327 cases in which
employees divided their purchases to skirt the $3,000 limit. The
inspector general's office found an additional 34 cases. In all, the
purchases totaled $493,000, the report said.
The
report said 94 employees were responsible for the purchases, including
22 workers who had done it more than once in a six-month period.
However, the report said, none of the employees were disciplined.
As
for the two IRS employees whose cards were used to buy pornography, the
inspector general's report didn't determine who bought the material or
whether their cards were actually stolen. One of the employees is no
longer at the agency. The IG is continuing to investigate the other
employee, the report said.
