Payments by Ministry of Defence staff to golf clubs, bars, hotels and restaurants were described as “questionable expenditure” by the Public Accounts Committee today as it urged all Whitehall departments to considering checking every transaction made on so-called Government Procurement Cards (GPC).
The spending watchdog’s report singled out the MoD because it accounted for three quarters of the £322 million spent last year on the card payment system, which was introduced in 1997 to make it more convenient and cost-effective for civil servants, military personnel and contractors to purchase low-value items such as goods and services.
Margaret Hodge, chair of the committee, said the department only checked as little as 5 per cent of transactions, while the Department for Work and Pensions did not have receipts for a third of its procurement card payments.
She said that the controls applied to card usage were not strict enough to prevent inappropriate payments, suggesting that the purchase of certain items such as wine, beer and spirits could be banned.
“There are inconsistencies in how the cards are used and controlled across government,” Mrs Hodge said.
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“Some departments block certain categories of spending; others do not. Some departments allow only permanent members of staff to use the cards; others are happy to hand them over to non-permanent staff. There is not even a central system for collecting and monitoring cases of card fraud and subsequent prosecutions.
“We are not convinced that this represents an appropriate use of public funds.”
The Cabinet Office, which has overall responsibility for the procurement cards, has set up a group to improve the way that the payment method is used, but the Public Accounts Committee wanted it to go further.
“Departments could check 100 per cent of transactions; restrict the use of the cards to permanent staff; and ban the use of the cards for certain items, such as alcohol. All of these options should be given serious consideration,” Mrs Hodge said.
The Public Account Committee’s report expressed “great concern” that the MoD, as the largest spender, did not operate a system of 100 per cent checks on what was being bought.
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“The Ministry of Defence’s published GPC expenditure in December 2011 lists a number of transactions in golf clubs and hotels, restaurants and bars,” it said.
“This is not necessarily fraud but it is questionable expenditure. The sampling approach, which could mean that as little as 5 per cent of transactions are checked, means that the Ministry of Defence cannot provide us with adequate assurance that these transactions represent a legitimate use of public funds.”