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Daily Herald Op-Ed: Best Practices for Government Use of ‘P-Cards’

The BGA’s Policy & Government Affairs Coordinator, Emily Miller, shines a light on procurement cards, or p-cards, which are taxpayer-financed debit cards issued directly to government employees to make work-related purchases. P-cards are becoming increasingly pervasive and potentially problematic in Illinois government, and in connection with a recent BGA investigation, Miller offers in an Aug. 2 Daily Herald op-ed best practices for p-card usage:

Keeping Tabs on Taxpayer-Backed ‘P-Cards’

By Emily Miller, BGA Policy & Government Affairs Coordinator

Image/Creative Commons

We all know about credit cards and debit cards. Now, meet the “p-card.”

In recent years, use of the p-card — a procurement card issued directly by government to employees to make work-related purchases — has exploded. Nationwide, p-card spending jumped to $17.7 billion in 2006, compared with only $3 billion in 1996, according to the latest data.

Basically, a p-card acts as a taxpayer-financed debit card. The p-card draws funds for purchases directly from designated bank accounts, which are backed by the tax revenues of a school district, suburb or other public body. Only permissible items can be bought with a p-card.

Although the federal bureaucracy is leading the way in p-card distribution, many local governments in Illinois — including Grayslake Elementary District 46, which the Daily Herald and Better Government Association reported Monday — are now issuing them to employees.

This growing popularity is forcing many government providers to rethink how p-cards are being managed.

According to the General Accountability Office, the independent federal watchdog agency, p-card waste, fraud and abuse often come as a result of inadequate program operating procedures and ineffective program oversight.

Common examples include making personal purchases, using the p-card for unauthorized buys such as alcohol or nonessential goods and services, “gold-plated” expenses, subsequent theft of purchased goods, and use of the p-card for goods or services that should be subject to a bidding process.

Without oversight, the waste of taxpayer dollars is virtually unavoidable. To avoid problems, here are some suggested best practices for governing bodies:

  • Develop a comprehensive written p-card policy. This policy will outline what is and is not allowed and should also indicate who is allowed to hold a p-card. That list of employees should be limited to those who need to make purchases in the course of their daily job.
  • Detail disciplinary action. Each government entity should have a written p-card oversight plan that outlines both oversight and disciplinary actions necessary to rectify any misuse.
  • Limit p-card use. Permissible use of the p-card should be limited only to necessary government expenses under a certain dollar amount, though each public body should develop its own specific lists of permissible expenses based on its public duty.
  • Improve communication. Cardholders should be made aware of the policy through an interactive training program that goes beyond just reading and signing the p-card policy.
  • Finally, a mandatory and documented review by a supervisor or approving official, someone other than the cardholder, should occur for all purchases. Using a checklist, the supervisor or reviewing official should:
    • Review an itemized invoice showing everything that was purchased and what was paid for each item.
    • Ensure the purchase serves a legitimate government need specifically permitted in the p-card policy, not a personal or impermissible one.
    • Ensure a transaction has not been split into segments to avoid maximum purchase amounts, or to get around the competitive bidding process.
    • Monitor the items purchased to ensure no excessive or “gold plated” expenses were incurred.
    • Verify that the items ordered were actually received by the public body.
    • Promptly report and attempt to reconcile all financial discrepancies within a set timetable, and help to enforce disciplinary action where appropriate.

Without strong financial internal controls dictating both appropriate use and required oversight of the program, there is nothing to deter erroneous use of p-cards, or to promptly detect and eliminate misuse and abuse.

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Statewide Update—Feb. 17, 2011

Photo courtesy lilhelen/Flickr

State Journal RegisterPension changes likely to be decided by state Supreme Court, “It will be up to the Illinois Supreme Court to decide whether changes to pension benefits for current state employees are constitutional, House Speaker Michael Madigan, D-Chicago, said Wednesday.”

    • Bloomington PantagraphLawmakers: Quinn’s proposal mostly falls short, “Although most lawmakers found at least a little to like about the governor’s relatively brief, broadly themed speech, all agreed it will be tough to reach an agreement on how to pay a mountain of old bills while financing current programs.”
    • SouthtownStarEditorial: Better, but Quinn’s budget still falls short, “We wholeheartedly agree that Regional Offices of Education are a waste of money—we learned that firsthand when we uncovered the corruption taking place at the Suburban Cook County office under the beleaguered Charles Flowers, who is charged with stealing $376,000 in public funds.”
    • Daily HeraldIllinois EPA asks state to act against salt discharge in Bartlett, “The Illinois Environmental Protection Agency released a statement saying Bluff City Materials Inc. stored as much as 50,000 tons of salt at one time at 1950 Vulcan Blvd. in Bartlett and asking the attorney general’s office to take steps to make sure the salt is stored in an environmentally safe way.”
    • Rockford Register StarRockford, Winnebago County leaders back school board review, “Mayor Larry Morrissey and Winnebago County Board Chairman Scott Christiansen said an independent review of the School District’s financial state could help settle the disagreement between the district’s money experts and its teachers union.”

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    Statewide Update—Feb. 10, 2011

    • Chicago TribuneNew report details scope of public pension shortfalls, “Chicago’s Civic Federation will release a report Thursday that shows the unfunded liabilities for 10 city and county pension funds grew sixfold from 2000 to 2009, with shortfalls now totaling nearly $23 billion.”
    • Daily HeraldCook public defender joins Alvarez in balking against budget cuts, “The Cook County public defender has joined State’s Attorney Anita Alvarez in opposing cuts proposed by county board President Toni Preckwinkle, raising the possibility the 2011 budget could unravel within three weeks of the deadline for passage.”
    • Daily HeraldDaley, airlines can’t reach airport deal, “After a high-stakes powwow in Washington between Daley and airline executives, which U.S. Transportation Secretary Ray LaHood brokered, the parties said there was no agreement on what airlines should pay for the ongoing expansion at the major air-travel hub.”
    • (Gatehouse News Service) Peoria Journal StarCullerton: Pension cuts unconstitutional, “Illinois Senate President John Cullerton on Wednesday tossed cold water on the idea of reducing future pension benefits for current state workers, but House Speaker Michael Madigan appeared to forge ahead anyway.”

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    Statewide Update—Jan. 31, 2011

    • The Southern—Public takes advantage of changes to open government laws, “Instead of filing a lawsuit, members of the public can ask the Public Access Bureau in the Illinois Attorney General’s Office to review withheld documents or meetings complaints, to make sure government bodies are not violating the Freedom of Information Act or the Open Meetings Act.”
    • (AP) Rockford Register Star—Pat Quinn to sign historic civil unions legislation, “Five states already allow civil unions or their equivalent, according to the Human Rights Campaign. Five other states and Washington, D.C., let gay couples marry outright, as do countries including Canada, South Africa and the Netherlands.”
    • State Journal-Register—Lawmakers seeking more money from state retirees for health care, “The legislature’s Commission on Government Forecasting and Accountability will meet Wednesday to talk with two Quinn administration officials about how the state can craft an income-based formula for how much retirees will have to pay.”
    • Daily Herald—Law firm donates to DuPage board members, wins contract, “Nine of the 15 DuPage County Board members who approved a no-bid contract for an Itasca law firm to help redraw the county’s electoral boundaries have accepted campaign contributions from the group or its attorneys, a review by the Daily Herald and the Better Government Association shows.”
    • Chicago Tribune—CTA puts brakes on talk of closing Red Line stations, “The agency is in the early stages of soliciting feedback for an overhaul of the north branch of the Red Line and the Purple Line, from about Belmont north through Evanston and to Linden in Wilmette.”
    • Rockford Register Star—Lawsuit for Harlem Township records nears its end, “The township also has called the Freedom of Information Act requests by Mullins unduly burdensome and argues that some of the records she requested simply are not on file at the township.”

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    Statewide Update—Jan. 26, 2011

    • Daily Herald—DuPage hires remap consultant, spikes confidentiality clause, “Schirott, Luetkehans and Garner, P.C. will be paid up to $125,000 to serve as a consultant to the county board committee charged with configuring the future legislative map.  However, the firm won’t need to comply with a confidentiality clause that had DuPage County Board Chairman Dan Cronin raising concerns about lack of transparency.”
    • Southtown Star—Quinn signs Medicaid reform into law, “Gov. Pat Quinn signed major reforms to Medicaid into Illinois law Tuesday, calling it a “landmark achievement” as he was flanked by a bipartisan group of state lawmakers who said the changes aim to reduce costs, pay bills sooner and target fraud.”
    • (AP) State Journal-Register—Illinois Supreme Court will hear Rahm Emanuel appeal, “About the only thing abundantly clear after a chaotic and unprecedented day at the Chicago Board of Elections: Voters only get to vote once, even if their ballots are wrong.”
    • Trib Local (Arlington Heights)—Taxpayers organize to influence politics, “Fed up with rising tax bills, residents have organized a watchdog group to  try and influence local politics and keep taxes down.”
    • (AP) Peoria Journal Star—SEC reviewing Illinois pension predictions, “The Securities and Exchange Commission is reviewing the Illinois pension systems and state officials’ statements about how much future savings the state will get from reforms enacted last spring, Gov. Pat Quinn’s administration said Tuesday.”
    • Rockford Register Star—Sheffields savings ideas: Close 8 Rockford schools, reduce staff, “Eight schools will close, gifted and several other programs will relocate to other schools, and kindergarten will shrink to a half-day program if the Rockford School Board adopts cost-cutting recommendations from Superintendent LaVonne Sheffield.”

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    Statewide Update—Jan. 25, 2011

    • Southtown Star—3 area men charged in ‘Cookie Jar’ probe, “A Tinley Park man, an Oak Forest man and a Burbank man, all of whom allegedly took part in a scheme to steal road salt from IDOT, were among seven people charged Monday in an ongoing crackdown on local public corruption.”
    • Trib Local (Evanston)—CTA considers chopping two Evanston stations, “As the Chicago Transit Authority seeks community input on potential improvements to the aging Purple and Red lines, three of the agency’s six options include eliminating the South Boulevard and Foster Street stations in Evanston — losses that city officials said would be a blow to commuters.”
    • Chicago Tribune—Editorial: Judicial arrogance, “With startling arrogance and audaciously twisted reasoning, two appellate judges ignored more than 100 years of legal precedent, invented a new definition of “residency” and ordered Rahm Emanuel off the Feb. 22 mayoral ballot.”
    • Rockford Register Star—Which School(s) could be closed? “Consolidating schools could help the district slash part of its $50 million budget shortfall for fiscal 2012.”
    • Daily Herald—East Dundee trustees discuss merits of PD merger, “Citing upcoming police contracts, a loss of autonomy, potential coverage issues and other reasons, several East Dundee trustees are balking at the idea of consolidating their police force with the ones in West Dundee and Sleepy Hollow.”
    • Rockford Register Star—Vehicles, EMS among Rockford outsourcing possibilities, “According to a report from Chicago-based Baker Tilly, the consulting firm hired last fall to assist in an outsourcing study, the city could realize up to $10.5 million is savings if it moved forward on five outsourcing and four service delivery suggestions.”

     

     

     

     

     

     

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    Statewide Update—Jan. 21, 2011

    • Bloomington Pantagraph—AG: Pontiac school board broke meeting law, “For the second time in less than a year, the Illinois attorney general’s office has notified the Pontiac Elementary District 429 that its board violated the terms of the state Open Meetings Act.”
    • State Journal-Register—Not all roads get salt in bad weather, “State highways and county roads usually receive doses of salt to remove ice, but many township road commissioners use no salt. Most cite cost as the reason, and they add that the practice isn’t new.”
    • Southtown Star—SD 225 strips principal of his duties, “A Rich Township High School District 227 administrator—who is suing the district and who was at the center of a monthslong controversy after a photo of him was burned at a party attended by Rich Central staff—has been stripped of his duties as principal.”
    • State Journal-Register—Coroner’s jury rules Davlin death a suicide, “But inquest proceedings shed no light on why Davlin, 53, shot himself. Police investigators and the Sangamon County coroner’s office have not released records that could answer whether the mayor’s apparent financial difficulties prompted the suicide.”

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