Federal auditors have discovered irregularities in the handling of government-issued charge cards at the Immigration and Refugee Board of Canada (IRB). According to the recently released “Core Control Audit” report, transactions were billed without proper approval procedures, and there were instances where it couldn’t be determined if expenses were approved before being incurred or before signing contracts. Additionally, no documentation was found for acquisition cards to demonstrate that commitments were recorded accurately.
The audit was conducted to assess the compliance of IRB’s financial management with the requirements set by the Treasury Board of Canada Secretariat. During the investigation, auditors found missing records and applications for charge cards that were not signed by the designated authority. The same issue arose concerning the control of spending limits, as no official documents were available to match the indicated amounts on the application forms.
In 1992, the charge card system was introduced to simplify federal purchases for office supplies, issuing around 2,000 cards. However, the number of issued cards has since risen to more than 35,000, leading to numerous audits revealing irregularities. For example, in February of this year, it was discovered that the National Research Council (NRC) had utilized 13% of its 2022 budget through cards, including high-risk transactions. Instances of contract splitting, unsupported documentation, and incorrect general ledger accounts were identified as problematic by auditors.
Similar issues were found in audits conducted at the Department of Fisheries in 2018 and the Department of Employment in 2020. The Department of Fisheries was shown to have made purchases worth $140 million annually, including suspected fraudulent activities. Meanwhile, the Department of Employment failed an audit due to only 33% of randomly selected transactions being approved, and 12% of transactions displaying inaccurate amounts. Both reports were reviewed by Blacklock’s.
In a 2020 audit, it was discovered that employees at the Department of Foreign Affairs used government-issued charge cards for personal purchases such as liquor, jewelry, and “hospitality.” The audit revealed that 80% of the selected samples lacked documentation on the approval provided by managers for the expenditure. Additionally, 31% of the samples had insufficient documentation to demonstrate compliance with policies and directives. Diplomats’ use of charge cards during 2019-2020 included expenses for jewelry, clothing, liquor, leisure activities, health and beauty products, personal purchases, and hospitality. The audit also found instances where transactions were potentially split to circumvent the acquisition card limit.
Overall, these audits highlight the need for better oversight and adherence to approval procedures in the handling of government-issued charge cards to prevent irregularities and ensure financial accountability.