WASHINGTON -- The Internal Revenue Service (IRS) needs to improve its oversight of fleet

credit cards used by its Small Business/Self-Employed (SB/SE) Division.

That is the conclusion of a new report publicly released today by the Treasury Inspector General

for Tax Administration (TIGTA). The report is one in a series of audits planned to assess how

the IRS manages its credit card usage.

The credit cards, known as fleet cards, are used by SB/SE employees who use Governmentleased

vehicles to visit retail and wholesale fuel facilities to enforce fuel excise tax laws. TIGTA

assessed the SB/SE Division Fleet Card Program to determine whether the IRS has established

effective controls and whether those controls are sufficient to identify and prevent errors and

instances of waste, fraud, and abuse.

TIGTA found that the Fleet Card Program lacks sufficient management oversight and internal

controls. TIGTA established that in some cases, reconciliation and certification of the monthly

Citibank statements were not conducted in accordance with procedures. TIGTA reviewed a

sample of monthly statements and found instances of no managerial approval, no employee

certification of charges, and missing receipts.

Finally, from October 1, 2001 until July 28, 2010, the Fleet Card Program did not have approval

by the Secretary of the Treasury for home-to-work authority but employees used its fleet vehicles

for that purpose. As a result, inappropriate charges were placed on fleet cards. Without

adequate internal controls, IRS management cannot be assured that the fuel and repair charges

are incurred only for official purposes. Consequently, this increases the risk of paying for

inappropriate vehicle expenses.

Although TIGTA did not identify specific transactions indicative of waste, fraud, or abuse, the

audit determined that the SB/SE Division did not retain adequate documentation to justify that all

transactions charged to the fleet cards during the audit period were appropriate and legitimate.

"It is imperative that the IRS ensure that purchases made by its employees using Governmentissued

credit cards are solely for Government use," said J. Russell George, Treasury Inspector

General for Tax Administration.

TIGTA recommended that the Commissioner, SB/SE Division, develop and implement formal

fleet card policies, procedures, and management controls that comply with the Office of

Management and Budget (OMB) and other Federal requirements.

IRS management agreed with this recommendation. SB/SE Specialty Tax Program staff plan to

develop formal fleet card policies, procedures, and management controls to enhance procedures

not covered in the interim guidance and to ensure compliance with OMB standards.