Consultants recommend changes to UG employee acquisition card controls
KANSAS CITY, Mo. — Consultants hired to provide a financial assessment of Unified Government for Wyandotte County and Kansas City, Kansas, found that more than 360 Unified Government employees currently have acquisition cards.
These cards allow employees to spend taxpayers’ money for government purposes, but they also need to be monitored closely and regularly to ensure the money is being spent according to UG policy.
“If the process isn’t monitored, it can go wrong,” said Byron C. Marshall. “The other thing that can happen, if it’s not monitored properly, is that people can buy things that are prohibited.”
Marshall, who is the managing director of Integrated Public Management Solutions, presented the consultants’ findings with Robert Bobb, who owns a public/private sector consultancy business.
The evaluation found that UG staff performed approximately 2,000 acquisition card transactions per month over a three-year period from 2019-21.
Annual purchases average $6.86 million through UG-issued acquisition cards with an estimated average transaction of $300.
With more than $4.4 million in additional spending so far in 2022, there have been approximately $25 million in employee purchase card transactions since January 1, 2019.
“P cards can be very beneficial to the government,” Marshall said. “They can reduce paperwork and allow people to get things very quickly. You should always follow the bid or quote responsibilities, but they can speed things up for someone who needs something right away. On the other hand, they need to be closely monitored, so people don’t circumvent your policies or inadvertently screw you up in some other way.
Bobb, Marshall and Nancy L. Zielke, general manager of Alvarez and Marsal Public Sector Services, called the use of the UG acquisition card “meaningful” and recommended several areas for improvement to “optimize our viability. finance as public custodians of taxpayers’ money”:
- Realign the UG Procurement Department to be part of the Finance Department rather than the County Administrator’s Office in line with current practice;
- Strengthen and expand the UG acquisition card policy and assess current spending trends to ensure compliance with stated policy;
- Review the number of acquisition cards currently issued to employees to determine if they are needed to reduce the number in circulation;
- Regularly conduct in-depth external audits of the use of P cards and assess areas for improvement;
- Updated the UG Policies and Procedures Manual for Acquisition Cards, which had not been done since 2007;
- Regular re-education of acquisition card policies for those granted such access;
- Review and implement changes, if necessary, to UG Merchant Category Codes to ensure proper use of acquisition card transactions;
- Hold purchasing card users and those who approve transactions responsible for any unauthorized purchases.
The consultants noted that the UG’s “procurement manager”, whose name is not specified in the report, believes that the UG’s purchasing policies and procedures “are often not followed”.
“Maybe things are going well, but what we suggest you do is assess your current P-Card purchasing policies,” Marshall said. “They haven’t been changed officially since 2007 or 2008, so they may not be up to par. We saw a few other versions that were proposed, changes that were never approved by the previous admin. At least we thought about making a change, but no change was made.
He added that the proper implementation of merchant category codes and internal purchasing reviews as well as regular external audits should be sufficient to monitor such fraud in combination with the controls put in place by the Department of Finance.
“The policy that (Acting County Administrator) Ms. (Cheryl) Harrison-Lee has is a very simple policy,” Robb said. “It says if you use the card for personal purposes you will be terminated. The policy that was unapproved by the previous admin is a multi-page document. It’s a great read, but the policy we have now is one page, employees sign it, it’s very clear what your responsibilities are when it comes to using these cards.”
Robb agreed that employees found to have abused the use of a government-issued acquisition card should be fired.
“There are no ifs, ands or buts about it,” he said. “My grandmother used to say that a rotten apple spoils the whole bushel, so take it seriously.”
The seven-minute conversation about purchasing card usage and recommended actions begins around 3:06:35: