D.C. public school officials are threatening to fire any employees who have misused their government-issued credit cards and are trying to recover any money that was misspent on unauthorized charges such as hotel services, food, entertainment and rental cars.
In a June 16 report, city auditors noted that school officials could not account for more than $1.6 million in credit-card charges for fiscal 2001, The Washington Times reported yesterday. The unaccounted-for charges make up about one-quarter of the school system’s $6.3 million credit-card expenses in fiscal 2001.
The school system has issued 275 credit cards to central school administrators and individual school officials, and a little more than $15 million has been spent by school personnel using the cards over the past two years, school officials said yesterday.
Officials “will discipline the guilty party — up to and including termination — and recover misspent funds,” said Barrington Salmon, a spokesman for the D.C. schools.
Auditors found that school-finance officials could not provide documentation to support about $984,728 in credit-card payments and had incomplete documentation for charges totaling $684,518 in fiscal 2001.
In addition, cardholders in city schools made improper purchases, such as $3,935 for food and water; $1,522 for hotel services; $1,050 for entertainment; $11,900 for gifts; and $473 for rental cars. They spent thousands on “items prone to mysterious disappearance,” such as televisions, DVD players and VCRs, the auditors reported.
Auditors also found that school workers paid tax on items that were tax-exempt and that the school system paid $112,415 in late fees on credit cards — more late-fee expenses than in any other of the city’s 15 agencies.
D.C. Council member Jim Graham yesterday said the District should scrap its government-issued credit-card program, which has come under scrutiny in recent weeks.
“My view of this is, this program has been so abused that we should stop it,” said Mr. Graham, Ward 1 Democrat. “When people abuse credit cards, what’s the first thing the credit company or the father or the parents do? They take it away.”
He said the credit-card program should be scrapped even if it proves inconvenient, noting the late fees paid by the school system.
“I am shocked by the school system having $112,000 in late fees,” Mr. Graham said. “I am shocked at the school system for showing once again that they are inept at handling taxpayers’ money.”
Mayor Anthony A. Williams said he is confident that lost funds through credit-card misuse in city offices can be cleared up by increasing post-audit reviews and reporting, and by levying stiffer penalties on violators.
“I want to reinforce our efforts to strengthen our review process and definitely look at how we set distribution and take care of risk management to check abuse patterns,” Mr. Williams said yesterday.
Mr. Williams said he is not sure whether city employees should be subject to credit checks before they are issued a card and indicated that such checks are not a priority.
Council member Kevin P. Chavous, chairman of the education committee, disagreed.
“I think people should be subject to credit checks, but beyond that there should be a limit on how many people get credit cards,” said Mr. Chavous, Ward 7 Democrat.
Mr. Chavous sent a letter to the D.C. schools administration officials yesterday asking them to explain what accountability measures are in place to detect credit-card misuse.
He added that he was surprised that more money wasn’t lost to late fees.
“It is no secret that the schools’ financial systems are dysfunctional, so much so that last year they didn’t know who they were paying or who worked for them,” Mr. Chavous said.
In a written response to the audit, school officials pledged to create better financial controls by Sept. 30 by training cardholders about credit-card use and suspending privileges for those who do not comply, requiring documentation for purchases and holding cardholders liable for unauthorized purchases.