Are P-Cards abused ?

Some years ago I wrote a paper on P-Card users doing maverick purchases.  Generally, I thought the issue was resolved till the recent GAO report, much discussed in the popular media.

P-Card  use  in Government, according to the report, has  grown from 3 billion dollars in 1996 to over 17 billion dollars in 2006. This growth has resulted in over $1.8 billion in savings in various transaction costs,compared to centralized purchasing and all the associated paperwork of small value "C" class purchases.

Interestingly, my quick reading of the GAO report suggested that the troubles are with mainly the purchases over $2500 that are 3% of transactions but 44% of the dollar value. Proper authorizations
( "control") are lacking and called for. The sampling of abusive use made for salacious headlines in the popular media.

I suppose much research on P-Cards need to be still conducted, but I think one finding from my own paper , is pretty applicable to the GAO report.  That is:

  • Train P-Card users to be careful, particularly above the micro purchase threshold of $2500. Get approvals  soon after your purchase if you can’t get approvals before buying, particularly if you are a Government employee or your organization rules have a P-Card per transaction limit. Also facilitate this by asking the card companies to report all buys above  your  threshold so that the very next month all approvals are sorted out. Should not be too difficult as only 3% of the transactions are over the limit of $2500.

Doing so would deter P-Card misuse (if you need to face your boss either immediately before or after  a dubious purchase, you’d think twice)  but, on the downside,would also make the GAO report less  colorful!

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