CHAIR’S 3 MINUTES
Published in the Maui News, June 18, 2017
By: MIKE WHITE
The topic of county-issued purchasing cards, also known as pCards, is once again in the news. With what started as an unauthorized commercial kitchen in 2015 has evolved into a federal lawsuit that alleges improper pCard spending and other inappropriate and troubling activities.
A report issued by Maui County Auditor Lance Taguchi on Wednesday pointed out irregularities in pCard transactions, which may indicate fraud, waste or abuse.
A copy of the report is available on mauicounty.us.
The executive summary of the report notes that over a 13-month period, 369 pCards were used by county employees to make $4.38 million in purchases. Unlike those reported from Hawaii County, there were no instances of pCards being used at hostess bars. However, a county pCard was used to purchase round-trip flights for noncounty employees by a department director. Though this was corrected and the county was reimbursed, I echo the same question our auditor posted in the report:
Can the county realistically expect its employees to follow rules meant to safeguard taxpayer money when those rules are being broken by the person making them?
The auditor turned over pertinent information to law enforcement, which prompted criminal investigations. But with incidents that happened in 2015, shouldn’t the pCard program already been overhauled to make sure it doesn’t happen again?
In a letter from county Managing Director Keith Regan as a response to the audit, he states a working group has been convened to review and assess the pCard program and its policy and procedures. It has been more than two full years since the initial incident surfaced and yet it doesn’t seem any substantive changes have been made.
Appropriate action must be taken now to fix the bottom-line problem, which includes greater oversight by managers and greater controls over spending.
I was also struck by the finding where pCard holders would avoid the $500 per purchase transaction limit by “parceling,” or breaking up, larger dollar-valued purchases into smaller parts. In virtually all instances, the same pCard was swiped two, three and up to five times within minutes of each other.
This directly goes against purchasing policies where larger purchases must go through a process to receive quotes to ensure the county is getting the best price possible.
Ultimately, managers must be held accountable for their subordinates’ spending. Using a pCard does not exempt employees from going through the proper purchasing process.
The auditor makes common-sense recommendations that I will request consideration from both the County Council’s Budget and Finance Committee and Policy, Economic Development and Agriculture Committee to monitor the administrations progress in correcting these issues. Allowing the lack of oversight over pCard transactions to linger this long is simply unacceptable.
If action is still not taken, the council may be forced to further regulate purchasing through legislative action. I’m hesitant in adding more purchasing regulations on top of the State Procurement Code, as it will add more burdens to complete daily tasks. I hope the administration will consider this matter with a sense of urgency.
This situation is unfortunate, as I take pride in our county employees’ dedication, honesty and hard work. County employees uphold fiscal responsibility and those who hurt the image of public service must be held accountable. A few bad apples should not make it hard for everyone.
Use of your tax dollars should always be for the best interest of the community. This is always top of mind in every piece of legislation considered by the council.