UPDATE: On Jan. 22, 2019, the Atlanta City Council approved an ordinance that prohibits all spending on city issued credit cards that isn’t directly related to city business. Read the story by the AJC’s Stephen Deere here.
Many state and local governments prefer the purchasing card (p-card) system over the traditional purchasing order process for the same reason you use your credit card for purchases. It’s simple, it’s cheap and it saves time.
The city of Atlanta Department of Procurement, responsible for all city purchases, is tasked with keeping operations efficient and cost-effective while ensuring that Atlanta gets maximum value for its spending dollars. The city gets goods and services in less time, suppliers are paid quickly and money is saved all around when fewer employees are needed to process purchasing orders and invoices.
But when public officials or institutions use taxpayer-funded credit cards for personal expenses, p-cards aren’t serving their stated purpose.
An Atlanta Journal-Constitution investigation revealed in May that former Atlanta Mayor Kasim Reed has used more than $50,000 from his personal and campaign bank accounts to repay taxpayers for charges he made on his city-issued credit card. And in 2015, former DeKalb Commissioner Elaine Boyer was sentenced to 14 months in federal prison for defrauding taxpayers through more than $100,000 in kickbacks, admitting also that she used her county-issued p-card for personal expenses. She was released in 2016.
In March, former Mayor Kasim Reed wrote these personal checks totalling nearly $12,000 to reimburse the city of Atlanta for charges to his city-backed credit card. The reimbursements covered charges from 2015 to 2017.
Photo: The Atlanta Journal-Constitution
Here’s a look at the positives and negatives of p-card use:
P-CARDS: THE PROS...
The Georgia Department of Administrative Services (DOAS) states that p-cards do the following:
- Streamline payment and purchasing procedures
- Reduce administrative burdens associated with small value purchases
- Allow for quicker receipt of goods
... AND THE CONS
The Government Finance Officers Association warns that using p-cards has disadvantages, too:
- Potential for duplicate vendor payments
- Negative public perception about issuing “credit cards” to government employees
- Potential for abuse despite p-card control measures
WHAT ABOUT OVERSIGHT?
In 2015, Georgia lawmakers approved House Bill 192, which required county commissions, city councils and school boards to pass rules and transaction limits before the cards could be issued to elected officials.
The Georgia DOAS website offers state agencies and institutions a variety of tools aimed at training public employees in proper p-card use. It also includes an online form for reporting “potential fraud, waste or abuse in the procurement area” for Georgia.
The Georgia Municipal Association, a voluntary, nonprofit organization representing municipal governments in the state, offers a model purchasing card policy on its website serving as a framework for cities to use in crafting their own p-card policies.
COMPLETE COVERAGE: BRIBERY INVESTIGATION