Audit: SC public in dark about credit abuse

ashain@thestate.comSeptember 24, 2013 

— S.C. lawmakers have not approved proposals to tell the public about state employees’ abuse of state credit cards issued 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.

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

The Comptroller General’s Office said it did not collect the information because, in part, of the potential cost of gathering and posting it, the report said.

The first audit of state-issued credit cards was made more than two years ago.

Since then, one employee defrauded the state out of more than $200,000 by using a state-issued 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 to employees in 1996 to ease the red tape required to make small purchases for state business. Bank of America has the state contract to issue Visa cards.

Nearly 10,000 were issued as of April. Those cards have been used to make more than $300 million in purchases.

The 2011 audit of the state credit cards recommended the comptroller general examine making detailed procurement-card purchase data available to the public. The office posts where and for how much a card is used by state agencies on its website.

The comptroller general said the detailed purchase information “is currently not available,” but it plans to request making more data available to the public when talks about a new credit-card contract begin. However, the Comptroller General’s Office noted that less than 2 percent of merchants provide detailed data on what is purchased because of the cost and system restrictions.

A majority of the 2011 report’s 33 recommendations on card use have been enacted – such as improvements in 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 with single-purchase limits of more than $2,500. One card had a credit limit of $125,000 that was lowered to $2,500 after questioning by the Audit Council.

In following another recommendation from the 2011 audit report, the State Budget and Control Board negotiated a higher rebate from Bank of America. The state received in $4.5 million rebates last year.

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