18/11/2009 WIRE: FILE - This file photo taken Nov. 18, 2009, shows a pile of MasterCard and VISA credit cards in Frankfurt, Germany. Heads are still spinning over credit card bills and charges. A law that went into effect in February 2010, requires banks to provide numerous consumer protections, including clearer monthly statements. Yet confusion about some practices remains widespread. (AP Photo/Jochen Krause, File)
18/11/2009 WIRE: FILE - This file photo taken Nov. 18, 2009, shows a pile of MasterCard and VISA credit cards in Frankfurt, Germany. Heads are still spinning over credit card bills and charges. A law that went into effect in February 2010, requires banks to provide numerous consumer protections, including clearer monthly statements. Yet confusion about some practices remains widespread. (AP Photo/Jochen Krause, File)

Jet-setting bureaucrat‘s alleged $86k fraud

A DEFENCE department bureaucrat racked up $86,000 in fraudulent credit card charges over just four months, an audit into the department's finances has alleged.

The unidentified public servant has been accused of using the taxpayer funded credit card to splash out on international travel, "lifestyle expenses" and withdraw cash.

It is part of a damning Australian National Audit Office report warned of "high risk" use of credit cards for travel expenses and criticised Defence for failing to take more action to prevent it.

The alleged credit card misuse was detected in March last year.

Defence Minister Linda Reynolds confirmed the alleged fraud was being investigated, but was unable to say if the public servant remained employed or had been reported to police.

Defence Minister Linda Reynolds says her department does not tolerate fraud or corruption. Picture: Gary Ramage
Defence Minister Linda Reynolds says her department does not tolerate fraud or corruption. Picture: Gary Ramage

"Defence does not tolerate fraud or corruption," she said.

"The Department's Fraud Control and Investigations Branch is investigating a series of unauthorised financial transactions on two Commonwealth Credit Cards issued to a Defence employee.

"As this is an ongoing investigation, it is not appropriate to provide further comment."

The alleged credit card fraud was an example given in the ANAO report, which slammed the Defence Department's processes for granting travel allowances to employees as "ineffective".

The lacklustre processes in place are despite Defence racking up almost $18 million in travel costs in the 2017-18 financial year.

There were 36 cash withdrawals from ATMs of more than $1000 by Department employees between July 2016 and June 2018.

The credit card incident sparked Defence to start a new fraud detection program in September last year, but there are still reported issues with this being investigated.

The audit report found shortcomings around the controls around the use of department credit cards for travel allowances.

While more controls were put in place in July 2017, the report found that half the recommendations from a previous 2015 review had yet to be implemented.

This was despite Defence telling the audit office all recommendations had been completed.



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