Job Corps Wasted Millions Via Debit and Govt. Purchase Cards: Report

By:  Michael Tennant
05/05/2014
       
Job Corps Wasted Millions Via Debit and Govt. Purchase Cards: Report

What happens when a federal agency gives people prepaid debit cards to be used strictly for travel expenses but then doesn’t monitor how they are spent? Taxpayers get taken for a ride.

That, according to a new report from the Labor Department’s Office of Inspector General (OIG), is precisely what has occurred over the last several years at the Job Corps, a federal agency charged with providing education and vocational training to young people. OIG estimates that a lack of oversight of debit cards and government purchase cards issued by the Job Corps resulted in $5.1 million in questionable expenditures, including purchases of personal items and unnecessarily expensive travel arrangements.

The Job Corps provides prepaid debit cards to students to cover expenses incurred during official travel, specifically meals and checked baggage charges. Actual travel arrangements are made by local Job Corps centers, of which there are 125 scattered across the country. All but 21 centers purchase their cards through the travel agency Transcor, Inc. Significantly, it was the private company Transcor, not the Job Corps, that discovered that the cards were being used for unauthorized purposes.

“In April 2012, a senior executive at Transcor notified Job Corps that a Miami center employee allegedly misused prepaid debit cards intended for student travel,” reads the OIG report. Further investigation showed that the cards had been employed “for a wide array of personal uses.” In addition, “the center had ordered hundreds of cards since 2011, but relatively few were actually used for student travel.”

This precipitated an OIG investigation of Job Corps debit card use. Naturally, the Job Corps was no help. “We requested a complete list of prepaid debit cards purchased by all 125 centers and found Job Corps was unable to provide this information because neither Job Corps nor the centers tracked and monitored card activities,” wrote OIG. Transcor came to the rescue, providing OIG with the activity history for 17,796 cards issued to the 104 centers it serviced from December 2009 to March 2013.

OIG “found 6,198 of the 17,796 cards (34.8 percent) were misused to purchase non-student travel goods and services (e.g., consumer electronics, clothing, wireless telephone service, online purchases), resulting in questioned costs totaling $249,477.” The Miami center alone accounted for nearly two-fifths of those questioned costs, but it was hardly the only offender: OIG concluded that “improper purchases occurred at 98 of the 104 centers reviewed.”

Although the Job Corps and most of the centers acknowledged the improper purchases, OIG couldn’t always tell who had made the purchases because of the centers’ slipshod recordkeeping. “The lack of consistent tracking,” observed OIG, “continued to occur even after a directive was issued by Job Corps’ National Director in May 2012 requiring centers to track distribution” of debit cards.

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