Warning on Government credit cards

The Government was accused of "complacency" today after a watchdog warned that controls on its credit cards are still too slack.

Some departments have large backlogs of unapproved purchases, while in other cases receipts and invoices are missing, according to the National Audit Office (NAO).

Previously released details of spending on the 24,000 procurement cards showed they had been used to buy doughnuts and shop at iTunes, as well as for air tickets and luxury hotels.

The auditor's report found that £322 million of payments were made on the cards in 2010-11, with the Ministry of Defence accounting for around three quarters of that.

Spending in the first half of this year totalled £149 million.

But cards were being used differently across Whitehall, and systems had "notable weaknesses".

"We found different controls in each of the five departments we examined," the report said. "There were instances of departments not complying with controls, such as missing receipts or invoices to support transactions, or no evidence that the cardholder was authorised to make purchases.

"In some departments we identified more significant issues, including a large backlog of unapproved transactions, and limited approval and reviewing procedures."

The document went on: "Some departments have inadequate management information and cannot monitor Government Procurement Card use effectively.

"This presents a further weakness in departmental controls. Without accurate data, departments cannot monitor adherence to policies, assess exposure to risk, or review whether controls meet business need."

The NAO said there was no clear guidance for departments on when cards should be used, but accepted that the coalition was trying to strengthen central oversight and make the system more consistent.

It also warned that government was relying on figures from 1998 to suggest the cards offered value for money, and called for better information.

Margaret Hodge, chair of the powerful Commons Public Accounts Committee, said: "This report has uncovered evidence of unauthorised transactions and a culture of complacency in some departments.

"Given the risks of fraud and poor value for money, I am concerned that neither departments nor the Cabinet Office know enough about the use of procurement cards in government.

"When the average transaction value is £184, the initiative to publish transactions over £500 is not enough to protect public money from fraud and misuse. We will want to know what action the Government is taking to improve controls.

"I am also concerned that departments do not have a good enough understanding about when using the card is the best value for money option.

"Given advances in procurement methods and the risk of reputational damage, Government must update the value for money case and produce clear central guidance on when the card should and should not be used."

A Cabinet Office spokeswoman said: "We welcome the NAO's report and will give a full response once we have studied its findings and taken into consideration the views and recommendations of the PAC.

"The proper use of these cards can help save the taxpayer money but let's be absolutely clear: we will not tolerate their abuse.

"As part of our wider transparency programme, we are now publishing online information on these cards so that everyone can see and scrutinise their use.

"This report covers the period before our new central policy and governance arrangements on procurement cards was introduced."

PA