NOW:53146:USA01489
http://widgets.journalinteractive.com/cache/JIResponseCacher.ashx?duration=5&url=http%3A%2F%2Fdata.wp.myweather.net%2FeWxII%2F%3Fdata%3D*USA01489
72°
H 72° L 54°
Cloudy | 5MPH

Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

State Audit: State Purchasing Cards

Audits


The Wisconsin Legislative Audit Bureau (LAB) has completed a review of the state’s program allowing state employees to use purchasing cards for state business purposes. The audit findings are mixed. There was not evidence of rampant fraud; however compliance with requirements could be improved.

A total of 3,071 purchasing card transactions recorded during 2008 was reviewed by the LAB. The purchases were selected based on the potential risk of abuse or fraud including purchases from retailers selling luxury or high-priced consumer goods, electronics stores, online retailers, restaurants, gas stations, and purchases made on holidays and weekends. Under the state’s program, executive branch agencies and University institutions used the purchasing cards.

Here are key findings of the LAB.

The state purchasing card program has grown dramatically. Total expenditures during 2005 amounted to
of Wisconsin
  $109.8 million. That compares to the 2008 total expenditures of $161.7 million.

 

The average purchase amount during 2008 was $233 per transaction. Some purchases, however, were greater than $25,000.

 

Despite the growth in the program, purchases made with state cards constituted only four percent of supply and service expenditures during 2008.

The Department of Administration (DOA) does not set limits on the amount of cards an employee may possess. Forty (40) cardholders had 10 or more cards during 2008.

Each card is limited to a maximum balance for its two-week billing cycle and a maximum amount for a single transaction.

The average credit limit was $9,382 at state agencies and $14, 576 at UW institutions. The LAB determined that spending limits in many cases were higher than necessary, creating a potential financial risk to the state.

Over 1,100 cards issued during 2008 were unused.

Most cardholder transactions, 76.2 percent, followed strict documentation requirements. However, they could be improved to include, as recommended by the LAB, a specific state business purpose for purchases.

The LAB found that, “Instances of inappropriate purchases were rare.” Here were exceptions the LAB identified: 

 

  • $52,463 in excessive or unnecessary purchases, including purchases that have a state business purpose but appear to be luxury items or to include avoidable costs such as late fees
  • $9,181 in inappropriate purchases, including purchases made for personal use or that are otherwise unallowable
  • $5,580 in third-party error or fraud, including erroneous or fraudulent charges made by vendors or unauthorized users
  • $4,378 in unknown purchases, including instances in which there was not sufficient documentation for the LAB  to determine what was purchased or whether it was appropriate, typically because of a lack of a receipt
  • $2,897 in purchases that represented misapplication of a purchasing card, including purchases that had a state business purpose but were not allowed to be made using a purchasing card.  
     

Eighteen (18) transactions totaling $52,463 in excessive and unnecessary purchases included, according to the LAB, “five business-class airfare tickets for State of Wisconsin Investment Board employees to travel to meetings in Europe, which totaled $48,226. Travel policies established by the Office of State Employment Relations restrict allowable airfare to coach fare unless the traveler submits written justification of the expense and the expense is approved by an agency’s appointing authority. Until April 2009, the Investment Board’s policies allowed upgraded airfare when the total flight time, including layovers and all connecting flights, exceeded eight hours and arrival occurred on the same day as the meeting. We (The LAB) question this travel policy because the cost of upgraded airfare typically exceeded the cost of an additional night’s lodging by a significant amount. For example, documentation maintained with two of the airfare transactions showed that the cost of two coach-class tickets would have been $12,600 less than the cost of two business class tickets. In April 2009, the State of Wisconsin Investment Board revised its travel policies to require coach airfare for flights less than 14 hours unless there are unusual circumstances and written justification of the added expense is approved by the agency’s Chief Operating Officer.”

Excessive or unnecessary purchases at eight other agencies were identified, including:

  • A $695 fox fur stole purchased by a UW-Milwaukee cardholder for a theater production.
  • Two attaché cases purchased by a Department of Transportation cardholder for $230 each
  • Four computer bags purchased by a UW-Milwaukee cardholder from a luxury luggage merchant for $195 each.


The LAB found 59 inappropriate purchases totaling $9,181 including one cardholder who accounted for 4 transactions totaling $1,142, including: 

 

  • A $223 purchase from the UW-Madison Athletic department for tickets to a theatrical production, made during March 2008
  • $714 purchase from a vacation Web site for a trip to Las Vegas, made during  April 2008
  • A $56 purchase of a watch and purse, made during April 2008
  • A $149 purchase for video game console repairs, made during May 2008.


The LAB is recommending that the DOA work with UW institutions and state agencies that supply state purchasing cards to lower spending limits whenever possible, close unused accounts, require cardholders to explicitly document the state business purpose for purchases, reinforce prohibitions against the use of cards for certain travel expenses, and ensure employees given use of cards receive appropriate training.

As a member of the Joint Legislative Audit Committee, I commend the LAB for another outstanding, comprehensive review for the benefit of the state of Wisconsin and its taxpayers. You can read the full audit report here.  

This site uses Facebook comments to make it easier for you to contribute. If you see a comment you would like to flag for spam or abuse, click the "x" in the upper right of it. By posting, you agree to our Terms of Use.

Page Tools