Audit: MARTA charge card abused

By Rhonda Cook

The Atlanta Journal-Constitution

Auditors found a lack of oversight allowed the assistant to MARTA’s general manager to make personal purchases using her government-issued credit card.

The PricewaterhouseCoopers report, released Thursday, also noted other instances where spending using a MARTA purchasing card, or P-card, was approved by the person also making the purchase. The audit report noted that many times supporting documents and the required reports were not filed to explain card charges.

“There was a complete failure of the internal controls with respect to the GM’s assistant’s P-card,” the audit report said. “This failure allowed personal expenditures to go undetected for over two years. While the majority [approximately 92 percent] of the charges on the GM’s assistant’s P-card appear to be related to authority [MARTA] business, the lack of supporting documentation for the remaining charges makes it very difficult, and in somes cases impossible, to determine if those charges were for legitimate business purposes.”

No one reviewed the charges made by General Manager Beverly Scott’s assistant Doree Henry, the auditors found.

A telephone number for Henry could not be found.

The audit was ordered last August when suspicions were raised concerning how Henry used her MARTA P-card.

The records reviewed date to 2008.

Henry, who was fired in August, charged about $3,600 to her P-card that was unrelated to MARTA business; $2,548 was personal charges, officials said.

Board Chairman Michael Tyler said in a written statement said the auditors found “significant improprieties” in the assistant’s use of a MARTA purchasing card.

“While the expenditure of $3,600 is a relatively minuscule amount in the context of MARTA’s 2010 annual budget of $787.6 million, it is nonetheless totally unacceptable and inconsistent with the MARTA board’s zero-tolerance policy for any improper expenditure of MARTA resources.”

The report also noted policies and procedures were not followed in regards to 12 other transactions.

“The report concluded that there was a complete failure of MARTA’s internal controls with respect to the general manager’s assistant’s use of the purchasing card,” Tyler said.

Scott has been asked to recommend changes in policies and procedures that would address concerns the auditors had.

According to the report, almost $2,550 out of Henry’s $3,600 P-card charges for car rental, four times at Enterprise Rent-A-Car.

Other charges were to Borders Books, See Sees Candies, Best Buy and Citgo. The card was also used for a $298 deposit at a Hilton Hotel.

Her per-transaction limit was $3,000 but there were occasions when purchases were split “to circumvent the single purchase limit,” the report said.

The assistant had access to the general manager’s card, which carries a $50,000 credit limit; Pricewaterhouse suggested the limit be reduced.

On that card, the auditors said, there were 31 charges for travel, totaling $2,585, between January 2009 and last September, for which there was an expense report.

There was one instance in which the general manager’s card was canceled for non-payment because the assistant took too long to provide the agency’s accounting department “the approved statement package on a timely basis.”

MARTA had issued about 140 P-cards to employees as of June 30. There were more than 13,000 individual transactions, totaling more than $2.6 million, in the 2010 fiscal year, which ended on June 30.

The auditors expanded their review beyond Henry’s spending, looking especially at charges to upscale food vendors and unusual vendors or for unusual amounts. They also examined the charges to P-cards issued to employees in the IT department.

“We noted over 500 instances [out of more than 13,000 transactions] in fiscal 2010 in which various cardholders did not complete the purchase description,” the audit report said. “We noted that many authorizing officials did not complete the electronic sign-off within the mandatory 10-day deadline… and/or did not execute an electronic sign-off at all. Certain recurring vendors were used for authority business purposes, but could also provide an opportunity for personal purchases that could go undetected absent rigorous and timely review.”

There have been previous problems with MARTA’s P-cards.

MARTA has dismissed two other employees for misusing the cards. Two MARTA employees inadvertently used the P-card for personal charges but they repaid the authority. One employees lost P-card privileges for using it to make capital expenditures.