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Officials: Prince George’s credit card problems have been resolved

Originally Appeared on Gazette.Net

Government Transparency

by Daniel Leaderman

MPPI IN THE NEWS

Prince George’s officials said stricter oversight is in place regarding county employees’ use of credit cards, putting an end to problems identified in an audit revealing documentation and approval failures. But some question whether the credit cards should be used at all.

The Purchasing Card Program, started in 2000, was intended to simplify the process for making small, business-related purchases for county agencies by eliminating the need for paperwork, such as purchase orders and check requests. Authorized employees can use the cards for purchases up to $5,000, with a monthly limit of $25,000, according to the program's manual. Purchases need to be approved by supervisors in advance, and competitive quotes are required for items over $500.

"It's made [the process] a lot faster and smoother," said Monica Johnson, director of the county's Office of Central Services, which oversees the program.

But a report by the county's Office of Audits and Investigations, released in May, examined a sample of the $12 million spent by the program in fiscal 2009 and found incidents of noncompliance in 7 percent of cases. Receipts weren’t documented properly; justification for purchases wasn’t always provided; one purchase was made in two transactions to avoid the $5,000 limit; and in some cases, quotes were not obtained, according to the audit.

Overall, the program fared better than in previous years, when noncompliance was found to be widespread, according to a 2005 audit.

Audits usually are done every few years so changes have time to take effect, said David Van Dyke, the county’s auditor.

A number of recommendations were included in the May report, some of which began being implemented last year by the Office of Central Services. Among the changes were requiring a statement justifying the need for the purchase to be approved by a department’s fiscal manager before any purchase can be made; and creating a new, standardized form to be used by all departments for each transaction, Johnson said. Refresher training also is provided on the rules of credit card use, Johnson said.

"The program has improved, and [violations] are not happening as often," Van Dyke said.

The audit's findings were troubling to Hyattsville activist Judy Robinson, who called the lack of compliance “pretty standard for the county,” and said the cards should be revoked if employees and department supervisors could not follow procedures.

County Council and school board members previously came under criticism for failing to follow procedures regarding use of county-issued credit cards. In 2006, their use of the cards was terminated.

Similar programs have led to instances of fraud in state agencies, said Marta Mossburg, senior fellow with the Maryland Public Policy Institute. An audit published in April of the state Department of Natural Resources identified an employee who made $71,000 in questionable purchases on a card, including computer games and equipment, which were passed off as office supplies, she said.

“To me, it makes very little sense to hand out credit cards to employees,” she said. “At most businesses, people spend their own money and are reimbursed. That weeds out fraud.”

In fiscal 2011, about $10.3 million was spent in the county’s purchasing card program.There were 214 cards in use by the county in August, Johnson said. There also were a number of safeguards were in place before the audit, such as requiring employees to take a 90-minute training course, requiring supervisor and program coordinator approval for each purchase, and having central services conduct a daily review and annual internal audits of card transactions.

County Council Chairwoman Ingrid Turner (D) of Bowie said she was pleased with the changes made by central services, but said it would be a good idea for the county auditor to revisit the program next year to make sure the program was not vulnerable to abuse.

Scott Peterson, a spokesman for County Executive Rushern L. Baker III (D), said the administration thinks the audit's findings and the actions taken by central services to address them are sufficient.