Must Read Article on Fraud... I Mean "P-Cards"

Folks, this all comes back to City Council, the Commissioners, etc., the elected people who are supposed to be in charge.  If anything is going wrong, they have the power to change things.  The City Manager serves at their pleasure and the City Manager can fire anyone in the city.

StarNews:

With the swipe of a card, local government officials have bought everything from iPad apps to Disney resort stays on the taxpayer's dime.

They're made with credit cards known as "P-cards," and they've become a major way to buy low-cost items.

Combined, four agencies in the Cape Fear region have spent about $26.6 million on more than 150,000 transactions over the past four years.

A StarNews review of P-card policies and purchases shows that oversight hinges on close scrutiny from cardholders' department heads, a system that has broken down around the state and country.

Records show dozens of questionable purchases – from expensive meals to flower arrangements.

And few comprehensive audits have been conducted. But when they have, they've often revealed improper use of the cards. 

[...]Brunswick County, Pender County, and the Brunswick County school system do not have a true purchasing card system. They have credit cards, but these are used sparingly. They are primarily for travel expenses and miscellaneous minor expenses

[...]For every purchase, the buyer is required to turn in receipts and other documentation. And in nearly every case, the agency has an explanation for the purchase. (Isn't this always the case?)

But during its investigation, the StarNews found:

• The city of Wilmington racked up more than $1,200 in late fees because employees failed to turn in paperwork on time.
• An internal audit also showed that some credit card statements were approved without adequate documentation and employees were allowing co-workers to use their cards.
• A New Hanover County schools card was used to subscribe to Cosmopolitan magazine and a UNCW librarian's card to sign up for two online dating sites. Both agencies said the purchases were fraudulent.
• More than $465,000 was returned at New Hanover County schools and UNCW, meaning the swipes were incorrect or fraudulent, products returned or prices adjusted.
• Up until two years ago, New Hanover County school electronic records do not show where money was spent, but only a general category. New Hanover County still doesn't have a means to track card spending by vendor.
• More than $500,000 was spent at computer and electronics stores such as Best Buy, Apple and NewEgg.com, despite policies that prohibit purchases of computers, computer equipment or entertainment. Finance officers say the money was spent on accessories such as wires and blank DVDs.

[...]The New Hanover County manager swiped his card at Break Time Billiards Sports Bar and Grille, next door to the government complex, for lunch meetings with county commissioners or department heads nearly 40 times. He had purchases at the nearby International House of Pancakes about 20 times.

[...]The city of Wilmington spent about $3,000 on flowers, with UNCW and New Hanover County spending thousands more.

[...]Walmart has cashed in from P-cards as well, with more than $400,000 in purchases.

[...]Talbert said she's sure there are a few cases where P-cards were taken away from Wilmington employees for misuse, but said the city can't say how many. (How convenient)

At the school system, some employees have been written up for improper buys, but it's not common, Purchasing Director Linda Bullard said.

[...]In another case, three employees and an interview candidate for a Wilmington water plant supervisor position spent $95.81 at Fat Tony's Italian Pub. One $21.46 large pizza was ordered for each person.

Talbert said it did seem like a lot, but had no more information on the purchase. The standard Internal Revenue Service per diem rate for lunches is $13 per person in Wilmington.

[...]The university reported the charges as fraudulent, and the cardholder signed an affidavit stating that the card was still in her possession when the charges were made and that she does not know who made them.

[...]In Wilmington, the first and only audit was done in 2008 and found numerous examples of incorrect use. [INEXCUSABLE!]

In a sample of only 50 transactions, Auditor Allison Collins reported several purchases without documentation and others without supervisor approval.

[...]The audit also found that P-cards were being used for office supplies, cellular equipment and gasoline – despite city contracts that would have gotten the materials cheaper. 

A 2008 internal audit at UNCW found 209 inappropriate purchases through sampling and sorting the data in the previous fiscal year. Infraction notices had been issued on only four of those, according to the audit report.

The auditor then reviewed all transactions for the 123 cardholders with inappropriate purchases. Another 355 infractions were found.