OCC: Purchase Card Usage at 

The Western District and Headquarters 

OIG-03-031 December 16, 2002

Office of Inspector General

******* 

The Department of the Treasury 

Contents 

 Audit Report ................................................................................................ 3 

 Results in Brief............................................................................................. 4 

 Background ................................................................................................. 5 

Findings and Recommendations ..................................................................... 7 

 Finding 1. Policies and Procedures Were Not Always Followed and Controls to 

Detect Exceptions Not Working ....................................................7 

Recommendations................................................................... 13 

 Finding 2. Purchase Card Program Fees and Expenses ..................................16 

 Recommendations .....................................................................17 

Appendices

 Appendix 1: Objectives, Scope, and Methodology ...................................... 20 

 Appendix 2: Western District Cardholder Account Transaction Summary 

for the Period September 28, 1999 to February 8, 2002............23 

Appendix 3: List of Prohibited and Restricted Items Per OCC Guidance ..........24 

 Appendix 4: Management Comments........................................................ 25 

 Appendix 5: Major Contributors To This Report.......................................... 29 

 Appendix 6: Report Distribution................................................................ 30 

Abbreviations

AO Approving Official 

APC Agency Program Coordinator 

OCC Office of the Comptroller of the Currency

OIG Office of Inspector General 

TD Treasury Directive 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 1 
This Page Left Intentionally Blank

 
OIG Audit 

Report

The Department of the Treasury 

Office of Inspector General 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 3 

December 16, 2002 

John D. Hawke, Jr. 

Comptroller 

Comptroller of the Currency 

 

This report covers the use of purchase cards at the Office of the 

Comptroller of the Currency’s (OCC) Western District, as well as 

OCC Headquarters. At OCC’s request, we expanded the original 

planned fieldwork to include limited testing covering OCC 

Headquarters. The audit is part of the OIG’s planned series of 

Treasury bureau wide audits in response to Senator 

Charles E. Grassely’s September 24, 2001 letter addressing his 

concerns on the use of the government charge cards within the 

Federal Government. 

 

Our overall audit objective was to determine if OCC has adequate 

controls over its Government Purchase Card Program to ensure that 

purchase cards are used for their intended purpose and if OCC’s 

purchase card program policies and procedures were reasonably 

effective in preventing and detecting improper card usage. 

For 16 of the 17 Western District cardholders, we sampled and 

reviewed 1,487 from a total of 4,034 transactions amounting to 

$877,864.54 from September 28, 1999 to February 8, 2002, as 

well as the supporting documentation. At OCC Headquarters’ 

request during the entrance briefing, we added a limited review of 

Headquarters cardholder operations. We reviewed transactions for 

8 of the 81 cardholders assigned in Washington, D.C. We did not 

review the five Headquarters cardholders located outside of D.C. 

Because the Headquarters fieldwork was limited in scope, we did 

not obtain the same type of detailed financial information from 
the issuing card bank as we did for the Western District. We 

conducted our audit between December 2001 and 

September 2002 in accordance with generally accepted 

government auditing standards. For a detailed description of the 

audit objectives, scope, and methodology see Appendix 1. 

Results in Brief

Overall, we believe OCC’s prescribed policies and procedures over 

the use of the Government Purchase Card were adequate and 

included sufficient internal controls to prevent and detect improper 

card usage. However, we found that prescribed policies and 

procedures were frequently and extensively not followed. These 

exceptions generally did not entail large dollar items and there were 

no indications the exceptions involved abuse. Nevertheless, we 

believe the deviations from policies and procedures coupled with 

the breakdown in controls to detect these deviations cast doubt as 

to the effectiveness of internal controls. Consequently, we believe 

the two audited OCC locations are more than moderately 

vulnerable to fraud, waste, and abuse, as well as erroneous and 

improper payments. 

The noted exceptions from prescribed policies and procedures 

occurred throughout the purchase card process beginning at the 

approving official level to the cardholder to those responsible for 

post reviews. The type of procedural exceptions included purchase 

authorizations, record keeping, monthly statement approvals, and 

periodic audits. For example, cardholders approved invoices for 

payment without proof of receipt of merchandise/service, 

purchases did not always have proper authorizations, required 

purchase logs were not maintained or incomplete, and responsible 

officials did not follow policies and procedures when approving 

cardholder monthly bank statements. Finally, the required post 

audit reviews by Headquarters for the District were not performed 

in over three years. 

OCC also uses the purchase card as a primary payment system and 

does not limit card usage to small purchases as commonly used by 

other agencies. In some instances, large and reoccurring 

expenditures are paid using the issuing card bank’s check writing 

OCC Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 4 
feature. However, this aspect of the card program may not be 

cost effective given the associated 1.25% fee of the transaction 

amount compared to issuing a Treasury check at less than a dollar. 

Finally, we reviewed several purchased items that are authorized 

under OCC policies and procedures, but these same items are 

generally not allowed by other federal agencies. To avoid public 

misperception of abuse, OCC may wish to reassess and document 

the business related basis for certain items such as flowers and 

monthly cake purchases. 

In response to our draft report, OCC largely concurred with the 

reported findings and had either already undertaken or planned 

corrective actions. In addition, OCC also noted that subsequent to 

the period of our audit coverage, they had instituted a new 

automated reconcilement process that provides managers and 

approving officials a means to review purchase card transactions 

for adherence to prescribed polices and procedures. OCC also 

provided additional information related to one of the purchases we 

discussed in the report and the cost of effecting payment through 

the card issuing bank’s check-writing feature versus a Treasury 

payment. We believe that OCC’s corrective actions collectively 

address our findings and recommendations if properly implemented. 

The complete text of OCC’s response has been incorporated in its 

entirety in Appendix 4. 

Background

The Office of Management and Budget established the Government 

Purchase Card Program in 1989 as a means to acquire goods and 

services and to streamline the acquisition of small dollar 

requirements by allowing non-procurement personnel to buy goods 

and services directly. The purchase card operates like a personal 

credit card but with some differences. The card can only be used 

for Official Government Business. In 1998, the Department of the 

Treasury selected CitiBank to provide all purchase card services – 

purchase card, travel card, and fleet card – to all its bureaus. 

Treasury Directive (TD) 76-04, April 13, 2000, Government 

Purchase Card Program, establishes policy for the Department of 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 5 
the Treasury wide Purchase Card Program. TD 76-04 established a 

micro-purchase limit of $2,500 for goods and services purchased 

outside of procurement offices. It also encourages, with the 

necessary documentation, the use of the purchase card as a 

payment method for purchases over the micro-purchases limit. 

TD 76-04 also requires cardholder training prior to receiving a 

purchase card. 

OCC Purchase Card Program

OCC’s prescribed policies and procedures over the use of purchase 

cards are contained in the Purchase Card Manual, April 1999. 

These policies and procedures collectively form the internal 

controls needed to provide reasonable assurance against fraud, 

abuse, and mismanagement. The Purchase Card Manual outlines 

the responsibilities at each level of the program, including the 

Cardholder, Approving Officials (AO), Agency Program

Coordinator (APC), and Acquisition Services. The following 

describes some of the fundamental procedures and associated

controls at each level: 

• The APC in Acquisition Services manages the program. 

Also Acquisition Services generally conducts District 

Quality Control Reviews every three years. During that 

review, the APC or designee performs a purchase card 

review. 

• The APC is responsible for appointing the AO and setting 

up cardholder accounts with the issuing bank (CitiBank). 

Also, the APC or the designee will conduct audits of 

Headquarters cardholder files annually, except for 

cardholders with purchase limits greater than $2,500 

who will be audited every 6 months. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 6 
 

• The AO is accountable for the purchase card transactions 

made by cardholders under his/her supervision. AOs are 

also responsible for reviewing the monthly statements of 

each of their cardholders to ensure all purchases were 

authorized and deemed necessary; transactions are in 

compliance with internal procedures; and transactions are 

fully documented. 

• In order to use the purchase card, the cardholder must 

have written delegation of authority from the APC. 

Then, in order to purchase goods and services, the 

cardholder is required to have written authorization to do 

so. 

According to CitiBank records, OCC had a total of 192 cardholders 

during the audited period, with total transactions amounting to over 

$5.6 million for over 9,500 transactions in FY 2001. In 2001, 

Headquarters had 86 cardholders with total charges of over 

$2.2 million and over 4,250 transactions. The Western District 

had 16 cardholders with over $900,000 in charges and over 4,400 

transactions for 28 months. 

Findings and Recommendations 

Finding 1 Policies and Procedures Were Not Always Followed and 

Controls to Detect Exceptions Were Not Working 

In reviewing 1,619 transactions for the 24 sampled cardholders, 

we found extensive exceptions from prescribed policies and 

procedures1

; and these exceptions occurred at each level of the 

purchase card process. We found purchases that were not 

properly supported, approvals being unjustifiably made, and errors 

going undetected, all of which suggest that the audited locations 

were vulnerable to fraud, waste, and abuse, as well as erroneous 

and improper payments. The associated individuals attributed 

these exceptions to a lack of training, inattention to details, lack of 

resources, and conflicting requirements. 

1 Appendix 2 shows a summary of the number and dollar amount of transactions for the 16 Western District cardholders. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 7 
The type and frequency of exceptions from policies and procedures 

varied across the different cardholders as well as their locations. 

To avoid recording isolated incidences, the following two tables 

summarize only those cardholders with two or more exceptions. 

Table 1 summarizes the exceptions for the 16 Western District 

cardholders over a 28-month period, and Table 2 reflects 

exceptions for the 8 headquarter cardholders over a shorter period 

of 12 months. 

Table 1: Western District 

Policy & Procedural Exceptions and Post Audit Lacking 

September 28, 1999 through February 8, 2002 

 Cardholder

Location 

Purchase 

Log 

Agreed to 

Bank 

Statement 

Bank 

Statements

Signed/Dated 

Receiving 

Documents 

Initialed/Dated

Proof of 

Service 

Received 

Requisition 

Signed and 

Approved 

Audit

Performed 

Yes No Yes No Yes No Yes No Yes No Yes No

Glendale X X X X X X

Denver X X X X X X

District X X X X X X

Seattle X X X X X X

District X X X X X X

Denver X X X X X X

Phoenix X X X X X X

District X X X X X X

District X X X X X X

District X X X X X X 

District X X X X X X

District X X X X X X

District X X X X X X

Orange X X X X X X

Glendale X X X X X X

 

Phoenix X X X X X X

TOTALS 8 8 9 7 16 8 8 12 4 16

Source: OCC Cardholder Purchase Files & OIG Analysis 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 8 
Table 2: Headquarters 

Policy & Procedural Exceptions and Post Audit Lacking 

Calendar Year 2001 

 Cardholder 

Purchase

Log 

Agreed to

Bank 

Statement 

Bank 

Statements 

Signed/ 

Dated 

Receiving 

Documents 

Initialed/ 

Dated 

Proof of 

Service

Received 

Requisition 

Signed and 

Approved

Annual 

Audit

Performed 

Yes No Yes No Yes No Yes No Yes No Yes No

1 X X X X X X

 

2 X X X X X X

3 X X X X X X

4 X X X X X X

5 X X X X X X

6 X X X X X X

7 X X X X X X

8 X X X X X X

TOTALS 6 2 1 7 1 7 5 3 6 2 8

Source: OCC Cardholder Purchase Files & OIG Analysis 

For the Western District, our analysis of the receiving documents

found 589 transactions with noted exceptions, amounting to about 

$170,776 (ranging from $1.58 to $2,200 per transaction). 

Although seemingly small, this amount is likely understated given 

our limited sampling methodology, which did not include testing 

transactions that reoccurred throughout the year such as Federal 

Express and telephone services. As noted above, we did not 

aggregate the total amount of exceptions for the Headquarter 

transactions given the limited testing performed for that location. 

Processing Procedures and Prevent Control Exceptions 

The most common exception we found entailed all 24 cardholder 

files containing receipts or invoices with no indication that the 

merchandise or service had actually been received, but were 

approved for payment. When asked how they verified receipt of 

paid purchases, cardholders assumed that the person ordering an 

item would have contacted them if they had not received the item. 

Other than this negative assurance, cardholders could not provide 

proof of receipt for any of the items. It is important to note that all 

of these were not assets required to be on inventory records. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 9 
However, the exceptions do illustrate the vulnerability to erroneous 

or improper payments. 

 

The tables also show that 8 of 16 District cardholder files and 2 of 

the 8 Headquarters cardholders contained purchase logs that did 

not agree with the bank statement or that logs were prepared after 

the bank statement was received. For example, we found a 

purchase listed on the purchase log that did not appear on the 

corresponding month’s bank statement or the following months 

thereafter. These could have been purchases that were cancelled 

or incorrectly entered. We also found purchase logs that matched 

the bank statement in the same exact order of when the bank

recorded the transaction instead of when the purchase was 

originally requested, suggesting either coincidental entry errors or 

post transaction entries based on the bank statement. 

Illustrating a breakdown of an internal control designed to prevent 

unauthorized purchase card usage were the four District and two 

Headquarters cardholder files that contained purchase records 

without approved requisitions. For example, an expanded review 

of several exceptions revealed 878 District requisitions, totaling 

over $58,000, were not signed as approved purchases, but all 

were still processed for payment. 

In addition, we identified one unauthorized purchase. However, 

this appeared to be due to human error rather than abuse. In fact, 

the cardholder had already notified OCC management about

inadvertently using the government purchase card for $114 in 

personal items at the local military commissary. The cardholder 

fully reimbursed OCC for the purchase 11 days after the purchase. 

Nevertheless, the incident illustrates how unauthorized purchases 

might occur and go undetected without proper controls. OCC had 

not invoked the CitiBank feature to disallow using purchases cards 

at a military commissary. On the other hand, it is questionable 

whether other controls would have highlighted the unusual 

purchase if the cardholder had not pointed out the error voluntarily. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 10 
Breakdown in Controls to Detect Exceptions 

Besides procedures and controls designed to prevent the improper 

use of the purchase card, OCC also has procedures that serve as 

controls to detect procedural deviations. The AO is required to

review a cardholder’s purchase log and the supporting 

documentation when approving the cardholder’s monthly bank 

statement for payment. This entails verifying the purchase 

documentation to the bank statement, checking to see the 

purchase card log is complete and that the log is being filled out as 

purchases are made and not after the statement is received. 

However, from the number of exceptions we found, it would 

appear in some cases the AOs might have been rubber-stamping 

their monthly reconciliation. Indeed, 2 of the 4 Headquarters AOs 

interviewed stated they did not completely follow the required 

reconciliation procedures, such as matching purchase logs, bank 

statements, or supporting documents. In addition, for 19 

transactions totaling about $500, the cardholder bank statements 

were approved without the required receiving documentation.

OCC policies and procedures provide that Acquisition Services 

manages the program, designates the APC, and conducts audits of 

District cardholder files during its Quality Control Review. The 

Quality Control Review is generally performed every three years. In 

addition, the APC or the designee will conduct audits of 

Headquarters cardholder files annually, except for cardholders with 

purchase limits greater than $2,500 who will be audited every six 

months. 

These audits determine cardholder compliance with the 

requirements of the purchase card program. However, Acquisition 

Services did not conduct any audits of Western District purchase 

cardholder files since May 28, 1999 through August 16, 2002 and 

the APC did not perform any audits within Headquarters in 2001. 

Given the lack of audits, the AOs were not aware of the 

reoccurring exceptions as to the purchase card program’s policies 

and procedures. 

The vulnerabilities of not having periodic APC audits as required 

were clearly illustrated for one Headquarters cardholder. The 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 11 
August 2000 APC audit found uncorrected problems that were 

identified during the May 1999 audit. Furthermore, there was no 

follow-up audit to determine whether the problems have been 

corrected as of December 2001. 

During 2001, this same cardholder also made 56 purchases that 

were not listed in the purchase logs and had a disputed charge that 

had not been corrected or reported to OCC or bank personnel. The 

disputed charge involved a restocking charge that resulted from 

returned merchandise. The cardholder nevertheless allowed the

payment to be made to the bank anyway. Had the APC performed 

an audit during 2001 the cardholder could have improved the 

monitoring of the purchases to avoid similar problems in the future, 

or other appropriate supervisory action could have been taken with 

respect to the cardholder’s assigned duties. 

As noted previously, the APC or designee did not meet the audit 

requirements for the purchase card program for Headquarters and 

the Western District. When asked why, the APC referred to his 

additional job requirements and him being a one-man operation, 

suggesting limited resources. Therefore, it appears that adding the 

requirement to also audit all the District field offices would be 

impossible. During our audit, an employee was added to the APC’s 

staff. 

 

Aside from the APC staffing constraints, we believe there are no 

obvious differences in risk exposures that would account for the 

different audit cycles between Headquarters and the Districts. 

Both locations have similar, if not identical, functions, processes 

and purchase thresholds. Yet the District audit coverage of every 

three years as opposed to annually for Headquarters appears 

questionable given the level of exceptions we found in the Western 

District. 

We attempted to find why these exceptions occurred and were not 

corrected. Cardholders and AOs especially in the District field 

offices repeatedly mentioned the lack of training. OCC’s current 

training program includes an initial video presentation and requires 

the cardholders and AOs to read the OCC Purchase Card Manual. 

The cardholders and AOs we interviewed stated they had seen the 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 12 
video and had read the manual, but most believed additional 

training would be of value to their daily requirements. 

Recommendations

 

1-1. Given the level of exceptions to OCC’s purchase card policies 

and procedures at the Western District, coupled with the 

apparent breakdown in controls to either prevent or detect 

exceptions, the Comptroller of the Currency needs to assess 

whether similar conditions exist at the remaining Districts and 

their field offices. 

Management Comments and the OIG’s Response

OCC generally concurred and had already resumed its internal 

audit program earlier this year covering Headquarters and two 

other Districts. The remaining Districts and field offices are 

scheduled to be completed this or next year. In addition, OCC’s 

new automated procedures and reports will assist program 

managers and approving officials in their review of transactions 

for propriety. We believe OCC’s completed and remaining 

planned internal audits of the other Districts substantively 

addresses the recommendation if properly implemented. 

1-2. Given the comments by cardholders and approving officials 

regarding the training video and manuals as insufficient 

training, the Agency Program Coordinator should consider 

alternative formalized training approaches, including periodic 

refresher training/supplemental training. 

Management Comments and OIG’s Response

OCC concurred and committed to develop additional training 

approaches and requirements. This included assessing training 

by the Defense Acquisition University, Customs and GSA. We

believe OCC’s planned management action will address the 

recommendation. Given that OCC is reviewing all possible 

options, internal and external, training for cardholders, 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 13 
approving officials, and others associated with purchase card 

transactions should improve. 

1-3. The Agency Program Coordinator should reassess the need 

to align the audit cycle for Headquarters and District offices 

and ensure that the required audit cycle is met. In the 

interim, the APC should consider appointing district 

personnel to perform more frequent district audits similar to 

the Headquarters cycle, i.e. semi-annual for above $2,500 

and annually for all other cardholders. 

Management Comments and OIG’s Response 

OCC agreed that the audit protocols for Headquarters and the 

Districts should be the same, and plans to revise their overall 

audit approach. OCC plans to concentrate their regularly 

scheduled audits on cardholders that account for the largest 

percentage of expenditures and rely upon random audits and 

reports currently obtained through the improved CitiDirect 

system. As OCC gains experience with the new audit and 

control measures, they will evaluate the need to use the District 

staff for random spot checks. We believe OCC’s planned 

actions will address the recommendation if properly 

implemented. 

1-4 The Agency Program Coordinator should commence audits 

covering any years with lapsed audit coverage to reasonably 

ensure that prior purchases were proper and payments were 

not erroneous or improper. 

Management Comments and OIG’s Response

As management stated in response to recommendation 1-1 

above, OCC resumed their audit program earlier this year and, 

so far, has completed audits of all cardholders in Headquarters 

and the Northeastern and Central Districts. Additional Districts 

will be covered this year and next. Their work to date has not 

revealed any erroneous or improper transactions or payments. 

We believe ongoing and planned audits will address the 

recommendation if properly implemented. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 14 
1-5. The Agency Program Coordinator needs to better ensure that 

the required documentation be maintained to verify 

authorization and receipt of purchases with the purchase card. 

This would be particularly important for the District APC to 

verify reoccurring transactions, such as the monthly phone

invoices, for accuracy and reasonableness of the charges. 

Management Comments and OIG’s Response

OCC concurred and committed the APC to provide reminders to

cardholders and approving officials of the documentation that 

must be retained in the purchase card file. OCC will also amend 

the Purchase Card Manual to more clearly delineate these 

requirements. We believe OCC’s planned management actions 

will address the recommendation if properly implemented. 

1-6. In light of the unusual military commissary grocery charge, the 

Agency Program Coordinator should periodically reassess and 

update the list of prohibited purchases and types of vendors 

that the issuing card bank may systematically invoke to reject 

vendor charges. 

Management Comments and OIG’s Response

OCC indicated that the APC currently performs periodic 

reviews. With respect to the commissary charge, OCC indicated 

that they were not aware of any vendor category that would 

have automatically blocked only that transaction or that could 

differentiate between authorized and unauthorized use of a 

commissary. 

We believe that OCC’s cited APC’s periodic reviews of 

prohibited purchases and a type of vendors technically 

addresses the OIG recommendation. However, as a point of

further clarification, the OIG suggests that any such future 

reviews include assessing the specific business circumstances 

warranting the type grocery items purchased from the military 

commissary. Moreover, OCC might also consider in such future 

periodic reviews whether the card-issuing bank could assist 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 15 
OCC in blocking out specific types of items or vendors beyond 

the currently available broad categories of items and types of 

vendors. Again, the OIG believes the OCC’s cited reviews 

addressed the recommendation. 

Finding 2 Purchase Card Program Fees and Expenses

OCC does not limit purchase card usage to the micro-purchase 

(small dollar) requirements of $2,500 for purchases outside of 

procurement offices. OCC has expanded the purchase card use as 

a payment method for purchases over the micro-purchase limit. 

One aspect of this payment method is a check-writing feature, 

which the Western District used when vendors did not accept a 

purchase card. Using the check-writing feature, OCC was charged 

a 1.25% fee of the face amount of the transaction. 

In reviewing several transactions, we noticed that this feature was 

used for some large reoccurring expenditures. Given the 

associated fee, this feature might not be the most cost effective 

payment method. For example, we estimate that the Western 

District paid approximately $340 on roughly $27,000 for phone 

services from December 2000 to January 2002. These amounts 

are likely understated because there were gaps in the reported 

monthly phone bills. 

From CitiBank records, we determined that OCC paid nationwide 

nearly $900,000 over a 28-month period using the check-writing 

feature with estimated fees totaling about $11,000. In 

comparison, the total transaction cost of issuing a Treasury check 

is estimated at 42 cents in year 2000, and just 2 cents per 

Electronic Transfer Account transaction. While a detailed cost 

comparison was outside the scope of this audit, we believe that 

the large contrasting costs between using the purchase card checkwriting feature versus a Treasury payment raises questions as to 

the cost effectiveness of the card’s check-writing feature. 

Finally, in reviewing transactions, we also noticed that several 

purchased items, while on the surface, may not have seemed to be 

for official government business. Under 12 U.S.C. 482, the 

Comptroller of the Currency may impose and collect assessments 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 16 
that are necessary or appropriate to carry out the responsibilities of 

the OCC and funds may only be used for OCC operations. Also, 

the Comptroller may provide benefits to his employees that are or 

could be provided by any other Federal banking regulatory agency. 

OCC regulations state the Comptroller of the Currency decides 

allowable items to be purchased. For a detailed list of OCC 

prohibited and restricted purchase items, see Appendix 3. 

In reviewing the above-mentioned transactions, we found that the 

items were not listed as a prohibited or restricted item. 

Nevertheless, some items could be easily perceived as not being 

for official business. Indeed, some items are generally not allowed 

by other Federal agencies and would be funded by the individual 

employees rather than the agency. These items included flowers, 

bottled water, lunches, and monthly cake purchases. 

Although these items were nominal expenditures individually, 

annual costs could amount in the thousands. For example, we

estimate the Western District spent possibly as much as $825 in 

monthly cake purchases over the 28-month audited period. We did 

not attempt to estimate the cost of cake purchases nationwide, 

however, a senior OCC official told us that this was common 

purchase throughout the country. 

Although authorized under existing regulations and OCC policy, we 

believe these types of purchases do not appear to be clearly in 

support of OCC operations or necessary, i.e., for official business. 

Recommendations

2-1. The Comptroller of the Currency should direct the Agency 

Program Coordinator to reassess the cost effectiveness of, 

and conditions for, the purchase card’s check-writing feature 

as compared to effecting payment through Treasury. 

Management Comments and OIG’s Response

OCC concurred and has reviewed the use of the check-writing 

feature and believes that the continued use of convenience 

checks is appropriate and cost effective. To avoid late payment 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 17 
charges and to decrease the number of non-EFT payments, the

OCC made a policy decision to use the purchase card and its 

convenience check payment feature for small purchases where 

there is no specific OCC contract in place for the services. 

Many of these payments are to utilities that refuse to accept 

EFT payment. OCC recognizes that the associated check 

writing fees represent a cost and will continuously evaluate 

their processes to reduce administrative costs. 

We believe that OCC’s cited action to continually evaluate the 

associated costs addresses the intent of the recommendation. 

In responding to this recommendation, OCC also noted that in 

using figures from a study by the Purchase Card Council, OCC 

avoided costs of over $107,000 as compared to the $11,000 

costs for the convenience checks cited in the report. We 

believe future OCC cost comparisons will need to reassess the 

applicability of the cost estimates from the Purchase Card 

study. Specifically, the transaction cost saving $53.77 cited by 

OCC occurs when using a purchase card versus a purchase 

order. However, this figure appears to implicitly assume that 

the costs of a purchase order is mutually exclusive from the 

costs of a purchase card transaction. As a point of clarification 

to the recommendation, the applicable cost comparison 

recommended was just the payment process and not the entire 

procurement process because we recognized that some of 

OCC’s purchase card convenience check payments included 

items that would have been procured through a purchase order. 

Accordingly, the $53.77 figure OCC uses in deriving the 

$107,000 cost avoidance likely included costs that would be 

common to using both purchase orders and purchase cards. 

While total transactions costs are relevant in these type of cost 

comparisons, an aspect missing from OCC’s approach was to 

isolate the cost of effecting payment by the purchase card 

convenience check versus through Treasury. Accordingly, 

future OCC cost comparisons will need to take into account the 

fact that there are common costs associated with a purchase 

order transaction and purchase card transaction, and that the 

two processes do not have totally mutually exclusive costs. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 18 
2-2. In conjunction with recommendation 1-6, the Comptroller of 

the Currency should also reassess the list of prohibited and 

restricted items not just for the purchase card but also to 

ensure the items are necessary and clearly support OCC 

operations. 

Management Comments and OIG’s Response

OCC has always had a policy that OCC expenditures had to be 

related to and in support of OCC operations, including employee 

work-life and morale. OCC also periodically evaluates policies in 

these areas and will be doing so in FY 2003. In prior reviews of 

these policies, OCC has concluded that the small sums involved 

represent a prudent use of funds, especially when compared to 

the alternative of direct cash awards to employees, which 

typically involve larger sums. We believe OCC’s planned FY 

2003 review addresses the recommendation if properly 

implemented. 

* * * * * * 

We would like to extend our appreciation to OCC for its 

cooperation and courtesies extended to our audit staff during the 

audit. If you have any questions, please contact me at 

(415) 977-8810 ext.222 or John A. Richards, Supervisory Auditor, 

at (415) 977-8810 ext.225. Major contributors to the report are 

listed in Appendix 5. 

Benny W. Lee 

Regional Inspector General for Audit

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 19 
Appendix 1 

 Objectives, Scope, and Methodology 

Our overall objective was to determine if the OCC has appropriate 

controls over its Government Purchase Card Program, to ensure that 

the purchase cards are used for their intended purpose and that OCC 

is achieving maximum benefit from the program. Specifically, we 

sought to determine if OCC’s purchase card program management 

policies and procedures are reasonably effective in preventing OCC 

from being vulnerable to fraud, waste, and abuse. 

We visited OCC Headquarters in Washington, D.C in December 2001 

and obtained program information such as polices and procedures, 

regulations, and related information over the Purchase Card Program. 

Our original audit scope was to only cover OCC’s Western District. 

During our entrance conference, however, Headquarters personnel 

asked that we also review their Headquarters procedures and 

program. We also reviewed the APC’s monitoring reports2

 and 

sampled cardholder purchases files. Since OCC Headquarters was 

not part of the original audit plan we did not have the CitiBank data 

available to select a judgmental sample or the dollar values 

associated with cardholder transactions like we had for the Western 

District. 

To determine the universe of cardholders and AOs throughout OCC, 

we reconciled three purchase card program reports maintained by the 

APC. The three reports maintained by the APC are: 1) the 

Cardholder List report which lists the card number, cardholder name 

and address, cardholder single purchase dollar spending limit, and 

cardholder level; 2) the Approving Official and Purchase Cardholder 

List which lists the AO, District, alternate approving official (if one is 

named), applicable cardholder name, and cardholder single purchase 

dollar spending limit; and 3) the Purchase Card Program Audit 

Schedule which lists AO, District, cardholder, card issuance date, 

previous audit dates, and next audit dates that are due or scheduled. 

From the universe of OCC cardholder accounts, we judgmentally 

sampled 10 percent to interview for compliance with OCC policies 

and procedures. We also performed a 10 percent judgmental sample 

 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 20 

2

 OCC Purchase Card Program Cardholder List, dated 12/4/01; OCC Approving Official and Purchase Cardholder List, Revised as of 

12/3/01; and OCC Purchase Card Program Audit Schedule, Updated 12/13/01.
Appendix 1 

 Objectives, Scope, and Methodology 

of cardholder accounts to review for purchase transaction 

compliance. 

For our Headquarters review we looked at 8 out of the 81 

cardholders assigned within the Headquarters building. We did not 

review the five Headquarters cardholders that were located outside 

of D.C. The review covered Headquarters APC function and 

responsibilities, AO responsibilities, and Cardholder purchase 

documentation files for the year 2001. 

After familiarization with the purchase card program, we notified 

OCC that we would review OCC’s Western District purchase card 

program in the San Francisco District and field office and five 

Western District Field Offices located in Glendale, California; Orange, 

California; Phoenix, Arizona; Denver, Colorado; and Seattle, 

Washington to assess the effectiveness of OCC’s Government 

Purchase Card management controls. 

We identified 17 cardholders at the OCC Western District. From 

OCC’s CitiDirect database we downloaded cardholder transaction 

files for the period September 28, 1999 through February 8, 2002. 

Our downloads included 17 cardholders, 8 in San Francisco and 9 at 

the Western District field offices, with over 4,400 transactions 

totaling over $900,000. From the CitiDirect database purchase card 

download, we compared bank record transactions to cardholder 

transaction records for each cardholder. 

At each cardholder location, we interviewed the cardholder and the 

associated AO to determine if their responsibilities and authority 

were in line with OCC’s purchase card program policies and 

procedures. 

In our purchase card file review, we compared the cardholder

transaction documentation against the downloaded data from the 

CitiDirect database. We reviewed transaction documentation for 

purchase requests, the cardholder purchase log, reconciled purchase 

invoices, unusual vendor transactions, approved packing slips, 

approved receiving documents, and approved bank statements. We 

reviewed 100 percent of the transactions for cardholders with a 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 21 
Appendix 1 

 Objectives, Scope, and Methodology 

small number of transactions (i.e., less than 250). For cardholders 

with a large number of transactions (i.e., greater than 250), we

selected large dollar transactions and unusual vendor transactions, 

while judgmentally selected every tenth transaction for review. 

We conducted our audit between December 2001 and 

September 2002 in accordance with generally accepted government 

auditing standards. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 22 
Appendix 2 

 Western District Cardholder Account Transaction Summary for the 

 Period September 28, 1999 to February 8, 2002 

District 

Cardholder

Location 

Total 

Number of 

Transactions 

9/28/99 

through 

2/8/02 

Transaction 

Dollar 

Amount 

9/28/99 

through 

12/31/99 

Transaction 

Dollar 

Amount for 

Calendar 

Year 2000 

Transaction 

Dollar 

Amount for 

Calendar 

Year 2001 

Transaction 

Dollar 

Amounts 

for 1/1/ 02 

through 

2/8/02 

Total Dollar

Amount for 

all 

Transactions 

from 

9/28/99 

through 

2/8/02 

Glendale 204 $192.51 $3,692.17 $6,177.32 $696.36 $10,758.36

Denver 310 1,302.17 2,924.31 11,431.85 14.55 15,672.88

District 14 0 793.00 1,567.38 0 2,360.38

Seattle 205 0 12,862.06 7,601.35 835.62 21,299.03

District 58 3,086.43 1,835.15 2,943.69 0 7,865.27

Denver 28 0 0 142.60 561.35 703.95

Phoenix 242 1,481.71 9,231.51 8,467.91 1,546.99 20,728.12

District 39 0 0 2,983.35 27.85 3,011.20

District3 1764 30,311.10 93,159.27 231,021.20 21,105.50 375,597.07

District 381 (2,499.00)4 70,539.55 118,850.13 15,146.06 202,036.74

District 146 6,592.12 15,639.01 15,261.28 446.84 37,939.25

District 15 396.19 544.62 23.05 0 963.86

District 354 0 17,762.95 106,661.86 32,927.01 157,351.82

Orange 241 375.86 4,097.38 13,655.48 0 18,128.72

Glendale 6 43.00 0 2,000.00 0 2,043.00

Phoenix 27 0 0 1,404.895 0 1,404.89

Total 4033 $41,282.09 $233,080.98 $530,193.34 $73,308.13 $877,864.54

SOURCE: CitiBank - CitiDirect Cardholder Reports and Cardholder File Review Analysis 

 

3 Cardholder is also the Western District Procurement Officer. Purchases that cannot be made by District field offices are requested

through the District procurement office. 4 Credit balance is for refunds for training courses cancelled in 1999. 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 23 

5 Cardholder account was opened and closed in 2001. 
Appendix 3 

 List of Prohibited and Restricted Items Per OCC Guidance 

Prohibited Items: 

1) Cash advances 

2) Rental or lease of land or buildings 

3) Purchases of telecommunications services (Amended by OCC Purchase Card 

Alert (PCAL) 01-11, dated 9/24/01) 

4) Personal travel and travel related expenses 

5) Purchase of gasoline or oil for GSA Interagency Fleet Management vehicles 

6) Repair of GSA Interagency Fleet Management vehicles 

7) Advance payments, except for rent (but not of land or buildings), tuition, 

insurance, utility connection/extension, subscriptions to publications, and rental 

leasing of microfilm libraries. 

8) Construction or renovation 

9) Purchases from Federal Government employees or from business organizations 

substantially owned or controlled by Federal employees 

10) Copying jobs that exceed 5,000 copies of one-page (single-sided) or 25,000 

copies total of multiple pages 

11) Print jobs that exceed $1,000 

Restricted Items: 

1) Information technology equipment, software, and services, unless approved by 

the appropriate IT officials. Note: You may not use the card to purchase 

telephone services under any circumstances. (Amended by OCC PCAL 01-11.) 

2) Advisory and assistance services, unless approved by the appropriate personnel 

officials. 

3) Furniture, unless approved by RE&DS. 

4) Training, unless in accordance with District policy or approved by the designated 

training official. 

5) Office supplies, unless approved by the Supply Manager in Administrative 

Services (applies to Headquarters personnel only).

 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 24 
Appendix 4 

Management Comments 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 25 
Appendix 4 

Management Comments 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 26 
Appendix 4 

Management Comments 

Appendix 4 

Management Comments 

OCC: Purchase Card Usage OCC: Purchase Card Usage At The Western Di At The Western District and strict and Headquarters ( Headquarters (OIG-03-031) IG-03-031) Page 27 Page 27 
Appendix 4 

Management Comments 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 28 
Appendix 5 

Major Contributors To This Report

John A. Richards – Supervisory Auditor 

Gale H. Dwyer - Auditor 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 29 
Appendix 6 

Report Distribution

The Department of the Treasury

Assistant Secretary, Office of Financial Institutions 

Office of Strategic Planning and Evaluations 

Office of Accounting and Internal Control

Office of Budget 

 Purchase Card Coordinator, Departmental Offices 

Office of the Comptroller of the Currency

 Comptroller 

Deputy Comptroller for Management Services 

Western District Deputy Comptroller 

Senior Advisor (OIG/GAO Liaison) 

Office of Management and Budget

OIG Budget Examiner 

OCC: Purchase Card Usage At The Western District and Headquarters (OIG-03-031) Page 30