Audit: Public in dark about state-card abuse

ashain@thestate.comSeptember 24, 2013 

Christmas 'paid for with credit'

FILE PHOTOGRAPH — the associated press

— S.C. lawmakers have not approved proposals to tell the public about state employees’ abuse of state-issued credit cards to make small purchases, a new state audit found.

State agencies are supposed to report employees punished for misusing a credit card to the Comptroller General’s office, which should post disciplinary actions on its website, according to an update of a 2011 Legislative Audit Council report released Tuesday.

The General Assembly has not amended the state budget to require reporting of card abuse. The Legislature also has not approved a law to monitor agencies’ compliance with the state’s procurement credit-card rules, the audit said.

The Comptroller General’s office partially blames the potential cost for not gathering and posting card-abuse information, the report said.

Since the first audit was issued more than two years ago, an employee defrauded the state out of more than $200,000 in 2010 using a state credit card. Another employee was punished for purchasing gift cards, the report said. The Comptroller General’s office said it has suspended four cards and canceled another for improper purchases.

“Reporting misuse of (a procurement card) can help deter future misuse and also assist agencies in improving their internal controls,” the audit council said.

The state started giving credit cards in 1996 to ease red tape to make smaller purchases for state business. Bank of America has the state contract to issue Visa cards. Nearly 10,000 were issued as of April to make more than $250 million in purchases.

The 2011 audit of the cards recommended the Comptroller General to examine making detailed procurement-card purchase data available to the public. The office posts all general card expenditures by state agencies on its website.

The office said the detailed purchase information “is currently not available” but plans to request making more data available to the public when the card contract talks begin again. The Comptroller General’s office noted that less than two percent of merchants provide detailed purchase data because of cost and system restrictions.

A majority of the 2011 report’s 33 recommendations about card use have been started -- such as improvements in state agencies’ written policies, employee training and audits.

Other measures put into place included: enforcing bans on gift-card purchases without state approval; documenting equipment bought with the state cards; and limiting the amount of single-transaction purchases.

The audit found 215 cards that with single-purchase limits of more than $2,500. One card had maximum of $125,000 that was lowered to $2,500 after questioning by the audit council.

In following another recommendation from the 2011 report, the state Budget and Control Board negotiated a higher rebate from Bank of America.

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