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CSB’s Fiscal Year 2014 

Purchase Card Program 

Assessed as High Risk 

Report No. 15-N-0171 June 29, 2015

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

U.S. Chemical Safety Board
Report Contributors: Cara Lindsey

Gloria Taylor-Upshaw

Michael D. Davis

Abbreviations

CSB U.S. Chemical Safety and Hazard Investigation Board

FY Fiscal Year

GSA U.S. General Services Administration

OIG Office of Inspector General

OMB Office of Management and Budget

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 15-N-0171

June 29, 2015

Why We Did This Review

The Government Charge Card 

Abuse Prevention Act of 2012 

requires the Inspector General 

of each executive agency to 

conduct periodic assessments 

of the agency purchase card or 

convenience check programs. 

Risk assessments should 

identify and analyze risks of

illegal, improper or erroneous 

purchases and payments. 

These risk assessments are 

used to determine the scope, 

frequency and number of 

periodic audits of purchase 

card or convenience check 

transactions. 

As the Inspector General for 

the U.S. Chemical Safety and 

Hazard Investigation Board 

(CSB), our objective was to 

perform a risk assessment of 

agency purchase cards usage, 

as required by the act.

This report addresses the 

following CSB goal:

 Preserve the public trust by 

maintaining and improving 

organizational excellence.

Send all inquiries to our public

affairs office at (202) 566-2391

or visit www.epa.gov/oig.

The full report is at:

www.epa.gov/oig/reports/2015/ 

20150629-15-N-0171.pdf

 

CSB’s Fiscal Year 2014 Purchase Card Program 

Assessed as High Risk

 What We Found

Our risk assessment determined that CSB’s

fiscal year (FY) 2014 purchase card program 

was at high risk for illegal, improper or 

erroneous purchases and payments. The 

program did not meet federal requirements. 

CSB’s purchase card program had the following 

deficiencies:

 CSB did not have a written Charge Card Management Plan until November 

2014. CSB was unaware of the requirement to submit its plan to the Office 

of Management and Budget by the required January 2014 deadline. 

 CSB’s management made assurances it had the appropriate policies and 

controls in place for purchase cards in FY 2014, but CSB did not establish 

written policies and controls in a management plan until FY 2015.

 CSB’s management plan did not identify all key management officials. 

 CSB’s management plan did not contain the required compliance summary 

and internal control assurance assessment. 

 CSB did not obtain prior written supervisory approvals for purchases.

Because CSB’s purchase card program is at high risk for illegal, improper or 

erroneous purchases and payments, we will conduct an audit of CSB’s purchase 

card program in FY 2016.

In response to our draft report, CSB agreed that it did not timely submit a 

Charge Card Management Plan to the Office of Management and Budget by the 

required deadline, and did not include the compliance summary in its 

management plan. CSB has also agreed that it did not obtain prior written 

supervisory approval for some purchases. 

However, CSB disagrees that it certified controls without written internal policies 

and procedures. CSB maintains that it follows the Bureau of the Fiscal Service’s

purchase card procedures and the management plan formalized CSB’s 

longstanding purchase card procedures. We did not find evidence that CSB staff 

were made aware that there were no agency-specific policies and therefore they 

were required to follow Bureau of the Fiscal Service guidance. CSB also 

disagrees that the management plan did not identify key management officials.

We believe that the CSB Managing Director approves funding for all purchase 

card transactions and should be listed as a key management official.

U.S. Environmental Protection Agency

Office of Inspector General

At a Glance

CSB’s $280,000 purchase 

card program for FY 2014 was 

assessed as high risk for 

illegal, improper or erroneous 

purchases and payments.
June 29, 2015

The Honorable Mark Griffon

The Honorable Manuel Ehrlich Jr.

The Honorable Rick Engler

Board Members

U.S. Chemical Safety and Hazard Investigation Board

2175 K Street, NW, Suite 400

Washington, D.C. 20037-1809

Dear Board Members:

This report addresses the requirement to complete a risk assessment of the U.S. Chemical Safety and 

Hazard Investigation Board’s charge card program. This report represents the position of the results of 

the risk assessment conducted by the Office of Inspector General (OIG) of the U.S. Environmental 

Protection Agency. 

Action Required

Because this report has no recommendations, you are not required to respond to this report. However, if 

you submit a response, it will be posted on the OIG’s public website, along with our comment on your 

response. Your response should be provided as an Adobe PDF file that complies with the accessibility 

requirements of Section 508 of the Rehabilitation Act of 1973, as amended. The final response should 

not contain data that you do not want to be released to the public; if your response contains such data, 

you should identify the data for redaction or removal along with corresponding justification. 

We will post this report to our website at http://www.epa.gov/oig. 

Sincerely,

Arthur A. Elkins Jr.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

THE INSPECTOR GENERAL
CSB's Fiscal Year 2014 Purchase Card Program 15-N-0171

Assessed as High Risk

 

Table of Contents

Purpose...................................................................................................................... 1

Background ............................................................................................................... 1

Scope and Methodology........................................................................................... 3

Results of Risk Assessment .................................................................................... 4

CSB Did Not Timely Submit a Charge Card Management Plan to OMB ............. 4

CSB Certified Controls Without Written Internal Policies and Procedures........... 4

CSB’s Management Plan Did Not Identify All Key Management Officials............ 5

Compliance Summary Was Not Included in Management Plan .......................... 5

CSB Did Not Obtain Prior Written Approval for Purchases ................................. 5

Conclusion ................................................................................................................ 6

CSB Response and OIG Evaluation......................................................................... 6

Appendices

A CSB Response to Draft Report........................................................................ 7

B Distribution ....................................................................................................... 10
15-N-0171 1

Purpose

As the Inspector General for the U.S. Chemical Safety and Hazard Investigation 

Board (CSB), our objective was to conduct a risk assessment of agency purchase 

cards usage, as required by the Government Charge Card Abuse Prevention Act 

of 2012.

Background

CSB is an independent federal agency charged with investigating industrial 

chemical accidents. Headquartered in Washington, D.C., the agency’s board

members are appointed by the President and confirmed by the Senate. CSB is 

authorized by the Clean Air Act Amendments of 1990 and became operational in 

January 1998.

CSB has an interagency agreement with the U.S. Bureau of the Fiscal Service’s 

Administrative Resource Center that provides a full range of procurement 

services, including services related to purchase cards. The bureau is part of the 

U.S. Department of the Treasury. CSB follows the bureau’s purchase card 

guidance, which all cardholders must read and certify that they understand. The 

bureau’s guide instructs employees on the proper use of government purchase 

cards. From fiscal years (FY) 2013 to 2014, CSB had 1,255 purchase card 

transactions that totaled over $500,000 for combined fiscal years.

On October 5, 2012, the President signed into law the Government Charge Card 

Abuse Prevention Act of 2012 (Charge Card Act), which reinforced 

administrative efforts to prevent waste, fraud and abuse of governmentwide 

charge card programs. Consistent with existing guidance from the Office of 

Management and Budget (OMB), the Charge Card Act requires all executive 

branch agencies to establish and maintain safeguards and internal controls for 

purchase cards, travel cards, integrated cards and centrally billed accounts. The 

guidance also states that the Inspector General will conduct periodic risk 

assessments of agency purchase cards, combined integrated card programs, and 

travel card programs to analyze the risks of illegal, improper or erroneous 

purchases. An Office of Inspector General (OIG) will use these risk assessments 

to determine the necessary scope, frequency and number of Inspector General

audits or reviews that it needs to conduct of these programs

OMB Memorandum M-13-21, Implementation of the Government Charge Card 

Abuse Prevention Act of 2012, dated September 6, 2013, states:

To ensure compliance with the Charge Card Act, as of 

September 30, 2013, each agency head shall provide an annual 

certification that the appropriate policies and controls are in place 

or that corrective actions have been taken to mitigate the risk of 

fraud and inappropriate charge card practices. The annual 
15-N-0171 2

certification should be included as part of the existing annual 

assurance statement under the Federal Managers’ Financial 

Integrity Act of 1982 (31 U.S.C. 3512 (d)(2)). In addition, each 

agency will continue to maintain and annually submit Charge Card 

Management Plans no later than January 31, as required by OMB 

Circular A-123, Appendix B.

Based upon OMB Circular A-123, Appendix B, Revised, Improving the 

Management of Government Charge Card Programs, dated January 15, 2009, the 

elements required in the charge card management plan are:

 Identification of key management officials and their responsibilities for 

each charge card program. These officials will include, but are not limited 

to, Agency/Organization Program Coordinator, Approving Officials or 

other equivalent officials, and other accountable/billing officials.

 Establishment of a process for formal appointment of cardholders and 

approving officials, where applicable.

 Implementation of a process to ensure the credit worthiness of new charge 

card applicants consistent with Chapter 6 of this guidance.

 Description of agency training requirements.

 Management controls, policies and practices for ensuring appropriate 

charge card and convenience check usage and oversight of payment 

delinquencies, fraud, misuse or abuse.

 Establishment of appropriate authorization controls.

 Implementation of policies and practices to ensure strategic sourcing

consistent with Chapter 8 of this guidance.

 Explanation of how available reports and data are used for monitoring 

delinquency, misuse, performance metrics, spend analysis, and other 

relevant transactions and program management issues.

 Documentation and record retention requirements.

 Recovery of charge cards and other documentation when employees 

terminate employment, and, if applicable, when an employee moves to a 

different organization.

 Description of how the agency will ensure the ongoing effectiveness of the 

actions taken pursuant to the guidance, including, but not limited to, 

evaluating the effectiveness of training (Chapter 3), risk management 

controls (Chapters 4 and 6), refund management controls (Chapter 7), 

strategic sourcing policies (Chapter 8), and tax recovery efforts (Chapter 11).

The OMB Memorandum M-13-21 states that, at a minimum, all agency Charge 

Card Management Plans shall be reviewed and updated, as necessary, to reflect 

the following internal control activities to:

 Prevent an individual from being reimbursed for a bill already paid by the 

government, by ensuring that agency officials who approve or settle 

official travel verify that charges paid directly by the government to the 
15-N-0171 3

bank are not also reimbursed to an employee or an employee’s 

individually billed account.

 Prevent the government from spending money on unused tickets by 

verifying the agency submits requests to servicing common carriers for 

refunds of fully or partially unused tickets, and tracks the status of these 

tickets to ensure resolution.

 Deter employee misuse of government cards by implementing penalties 

for charge card violations that are jointly developed by agency charge card 

management and human resource components. These penalties will 

include salary offset for instances of personal liability, and disciplinary 

actions for a cardholder or approving official’s illegal, improper or 

erroneous purchases made with a purchase card, convenience check, 

integrated card or travel card. Disciplinary actions should include 

dismissal, as appropriate. The plan will define and apply appropriate and 

consistent employee disciplinary procedures, and comply with joint 

external reporting required of the Inspector General and agency 

management.

The U.S. General Services Administration (GSA), Federal Acquisition Service, 

Smart Bulletin No. 021, OMB Memorandum M-13-21 and Charge Card 

Compliance Summary, dated November 18, 2013, provides a summary of the 

requirements in OMB Memorandum M-13-21. Further, it provides 

Agency/Organization Program Coordinators with a copy of the compliance 

summary document addressed in the memorandum. Agencies were to summarize 

their overall results in their completed compliance summary and internal control 

assurance assessments in their annual Charge Card Management Plans, beginning 

with the January 31, 2014, submission to OMB. The compliance summary should 

also be available for review by the Inspector General.

Scope and Methodology

The work performed in this risk assessment does not constitute an audit conducted 

in accordance with generally accepted government auditing standards, issued by 

the Comptroller General of the United States. We conducted this risk assessment 

from November 2014 to May 2015.

To perform an assessment of CSB purchase card usage and determine the risk, 

we reviewed CSB’s charge card management plan and sampled purchase card 

transactions. We interviewed, held discussions with and exchanged emails with 

CSB officials.

We judgmentally selected five purchase card transactions to review from CSB’s 

1,255 transactions from October 2012 to September 2014. Two transactions were 

selected from the higher-value purchases and two from purchases with negative 

values due to returned items. We also selected a vendor with multiple purchases 

that totaled over $4,000.
15-N-0171 4

Results of Risk Assessment

Our risk assessment identified five areas in which CSB’s purchase card program 

was deficient:

 CSB did not have a written Charge Card Management Plan until 

November 2014. CSB was unaware of the requirement to submit its plan 

to OMB by the required January 2014 deadline. 

 CSB’s management made assurances it had the appropriate policies and 

controls in place for purchase cards in FY 2014, but CSB did not actually 

establish written policies and controls in a management plan until FY 2015.

 CSB’s management plan did not identify all key management officials. 

 CSB’s management plan did not contain the required compliance 

summary and internal control assurance assessment. 

 CSB did not obtain prior written supervisory approvals for purchases.

Based on these identified deficiencies, we determined CSB’s purchase card 

program is high risk for illegal, improper or erroneous purchases and payments

requiring an annual audit.

CSB Did Not Timely Submit a Charge Card Management Plan to OMB 

According to OMB Memorandum M-13-21, each agency will continue to 

maintain and annually submit Charge Card Management Plans no later than 

January 31, as required by OMB Circular A-123, Appendix B. However, CSB did 

not submit its Charge Card Management Plan to OMB by the January 31, 2014,

deadline. In our notification letter, dated November 6, 2014, we requested a copy 

of CSB’s Charge Card Management Plan, and CSB provided an unsigned copy of 

the plan to the OIG on November 18, 2014. According to CSB, this was its first 

written Charge Card Management Plan and the document was provided as 

submitted to OMB. CSB stated it was not aware of any other written policies or 

procedures regarding charge cards and their use. On February 2, 2015, CSB 

submitted its FY 2015 Charge Card Management Plan to OMB.

CSB Certified Controls Without Written Internal Policies and 

Procedures

As part of CSB’s 2014 Performance and Accountability Report, CSB’s 

management made assurances that its internal management control system will:

help provide assurance that obligations and costs comply with applicable law;

assets are safeguarded against waste, loss and unauthorized use or 

misappropriation; and revenues and expenditures are properly accounted for and 

recorded. This includes appropriate policies and controls to mitigate the risk of

fraud and inappropriate charge card practices. CSB stated that it follows Bureau 

of the Fiscal Service guidance for purchase cards. However, we found that CSB 
15-N-0171 5

did not have any internal written policies and procedures regarding purchase cards 

in FY 2014.

CSB’s Management Plan Did Not Identify All Key Management 

Officials

CSB’s Charge Card Management Plan submitted to the OIG in November 2014

covers all the elements required by OMB Circular A-123, Appendix B, Section 2.3. 

One element of the management plan requires the identification of key 

management officials and their responsibilities for each charge card program. 

These officials are to include the Agency/Organization Program Coordinator, 

Approving Officials or other equivalent officials, and other accountable/billing 

officials.

The CSB’s Charge Card Management Plan key personnel list was incomplete. 

A CSB official (the Managing Director) who approved funding for purchase card 

transactions was not listed as a key management official. Furthermore, this

approving official did not obtain the required charge card management training. 

According to OMB Circular A-123, Appendix B, Section 3.3, all program 

participants—including cardholder, charge card manager and other 

accountable/billing officials—must be trained in charge card management. 

Compliance Summary Was Not Included in Management Plan

According to OMB Memorandum M-13-21, GSA developed a compliance 

assessment tool to help document whether the required safeguards are in place. 

The tool requires completion of an internal control assurance assessment with the 

results documented in a compliance summary. The compliance summary is to be 

submitted to OMB annually starting in January 2014 and should be available for 

Inspector General review. CSB did not complete the compliance summaries and 

internal control assurance assessment in the Charge Card Management Plan 

provided to the OIG in November 2014. CSB was unaware of the requirement for 

the compliance summary and assurance assessment. However, once we identified 

this deficiency, CSB included a compliance summary in its FY 2015 Charge Card 

Management Plan submitted to OMB on February 2, 2015.

CSB Did Not Obtain Prior Written Approval for Purchases 

The Bureau of the Fiscal Service’s guide states in Section 5, Use of the Purchase 

Cards, paragraph 2, that the cardholder must ensure proper use of the purchase 

card. This includes documenting funds availability prior to purchase, maintaining 

a purchase log, receiving prior approval of the purchase from the Approving 

Official, and reconciling the monthly e-statements. Of the five purchase card 

transactions reviewed, we found that for one transaction, the check date was 

before the supervisory approval date. Another transaction noted the invoice and 

payment dates were before the supervisory approval date. CSB stated that 

cardholders occasionally make purchases before obtaining written approval. 
15-N-0171 6

Conclusion

Based on our risk assessment of CSB’s purchase card program, we have 

determined that CSB is at high risk of illegal, improper or erroneous purchases 

and payments made through its $280,000 purchase card program for FY 2014. 

We made this determination due to CSB not having a written Charge Card 

Management Plan until November 2014 and not being aware of the January 2014 

deadline to submit the plan to OMB. We also noted charge card plan deficiencies 

and the need for supervisory approvals on transactions. As such, we will conduct 

an audit of CSB’s purchase card program in FY 2016.

CSB Response and OIG Evaluation

In response to our draft report, CSB agreed with our results for the Charge Card 

Management Plan submission, the compliance summary, and the need to have 

prior written approval for purchases. 

CSB disagreed that it certified controls without written internal policies and 

procedures. CSB further stated that the OIG implied that the written Charge Card 

Management Plan needed to be the basis for certifying controls. CSB stated that its

plan formalized its longstanding purchase card procedures, the Bureau of the Fiscal 

Service annually reviews charge card program activities, and the bureau has not 

identified problems with charge card program controls. According to OMB Circular 

A-123, Appendix B, Revised, Section 2.1, each agency must develop and maintain 

written policies and procedures for the appropriate use of charge cards consistent 

with the requirements of this guidance. During our risk assessment, CSB stated that 

it did not have internal written policies and procedures for purchase cards. In 

addition, we did not find evidence that CSB staff were made aware that there were

no agency-specific policies and therefore they were required to follow Bureau of 

the Fiscal Service guidance.

CSB disagreed that its management plan did not identify all key management 

officials. CSB stated that its plan does not identify the Managing Director because 

he does not serve as an approving official for the charge card program. The 

Bureau of the Fiscal Service’s guide states in Section 5, Use of the Purchase 

Cards, paragraph 2, that the approving official must ensure government funds are 

available prior to granting purchase approval. It is our position that since the 

Managing Director approves funding for all purchase card transactions, he is an 

integral part of CSB’s purchase card program. Therefore, the Managing Director 

should be listed as a key management official and attend the required charge card 

management training.

CSB’s complete response to our draft report is in Appendix A.
15-N-0171 7

Appendix A

CSB Response to Draft Report

U.S. Chemical Safety and 

Hazard Investigation Board 

Mark Griffon

Board Member (Interim Chairperson)

Manny Ehrlich, Jr.

Board Member

Rick Engler

Board Member

May 27, 2015

Mr. Kevin Christensen

Assistant Inspector General for Audits 

Office of Inspector General

U.S. Environmental Protection Agency 

1200 Pennsylvania Avenue, N.W.,

(2410T) Washington, DC 20460

Dear Mr. Christensen:

Thank you for the opportunity to review and comment on the draft report on the

CSB's purchase card program. As a general matter, we agree with you that purchase

card programs (regardless of agency) are at a high risk for illegal, improper or

erroneous purchases and payments. As you know, the CSB identifies the purchase

card program as a high risk area to OIG financial auditors each year. To mitigate

these inherent risks with purchase cards, the CSB has internal controls over the

program and follows guidance from the Treasury Department's Bureau of the Fiscal

Service (BFS). The existing guidance and controls are now formally documented in

the Charge Card Management Plan provided to your office in November 2014.

Although the CSB believes purchase card programs are inherently high risk we are 

concerned that your report is misleading because it does not recognize CSB efforts

that have successfully mitigated the risks. In addition the report leaves the erroneous

impression that the CSB's program may be at higher risk than other such programs

across the government. The BFS conducts detailed annual reviews of CSB purchase

card activities, which are complimentary of CSB's purchase card program. In fact, for

FY 2014 BFS reported:

Overall, the purchases were well documented and necessary for the

completion of CSB's mission. We would like to express our

appreciation for your management support to ensure the purchase

cards are used appropriately and the related procedures are followed. 
15-N-0171 8

We are very impressed at how well the cardholders are maintaining

their supporting documentation and the forms that they are required

to complete. The documentation provided was very organized. Keep up

the good work!

The CSB acknowledges it was not timely in submitting its Charge Card Management

Plan to OMB, and that we can make improvements to the plan. However, this should not 

overshadow the fact that CSB runs an effective charge card program, and that no

improper use of the purchase cards was identified. The attachment addresses the specific

concerns raised in your draft report. If you or your staff have any questions about this

response, please feel free to contact Anna Brown, Audit Liaison, at 202-261-7639.

Sincerely,

/S/

Mark Griffon 

Board Member
15-N-0171 9

Specific OIG Concerns and CSB Responses

OIG Concern CSB Response

CSB Did Not Timely

Submit a Charge Card 

Management Plan to OMB

Agree. The CSB did not formally document its longstanding

purchase card procedures until we prepared the written charge

card plan in November 2014. The plan was submitted to OMB on

February 2, 2015.

CSB Certified Controls

Without Written Internal 

Policies and Procedures

Disagree. The OIG implies that the written Charge Card

Management Plan needed to be the basis for certifying controls.

However, this plan formalized CSB’s longstanding purchase card

procedures to:

 Follow BFS purchase card procedures;

 Issue memos with monthly statements to cardholders 

and their supervisors that spells out the cardholder and 

supervisor’s responsibilities. The memos reiterated the 

process to ensure that charges were authorized, 

approved, and properly documented; and

 Have every transaction on monthly statements

reviewed and approved by financial operations staff 

who serve as charge card approving officials, and do 

not hold or issue purchase cards.

In addition, BFS annually reviews charge card program activities

which have not identified problems with charge card program

controls.

CSB’s Management Plan

Did Not Identify All Key

Management Officials

Disagree. The Charge Card Management Plan identifies key

management officials and their responsibilities for the charge card

program. CSB’s plan does not identify the Managing Director

because he does not serve as an approving official for the charge

card program.

Compliance Summary 

Was Not Included in 

Management Plan

Agree. The compliance summary was not included in the

November 2014 Management Plan. However, the compliance

summary was included in the plans submitted to OMB on

February 2, 2015.

CSB Did Not Obtain Prior

Written Approval for 

Purchases

Agree. The CSB is aware that cardholders occasionally make

purchases before obtaining written approval. We will reiterate to

cardholders and supervisors the importance of prior written

approval. However, we note that even when cardholders did not

receive prior approval, all purchases were ultimately approved

and were determined to have been proper.
15-N-0171 10

Appendix B

Distribution

Board Members, U.S. Chemical Safety and Hazard Investigation Board

Managing Director, U.S. Chemical Safety and Hazard Investigation Board

General Counsel, U.S. Chemical Safety and Hazard Investigation Board

Director of Administration and Audit Liaison, U.S. Chemical Safety and Hazard 

Investigation Board

Finance Director, U.S. Chemical Safety and Hazard Investigation Board

Communications Manager, U.S. Chemical Safety and Hazard Investigation Board