Tuesday, February 26, 2008
Credit card fiasco is a matter of oversight
Shanna Flowers
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There are a lot of city-issued credit cards floating around Roanoke's city hall.
On the heels of Alfred Dowe's forced resignation because he double-billed taxpayers for expenses he put on his city-issued credit card, we discover that 700 Roanoke employees -- 40 percent -- carry city cards.
On its face, that sounds like a lot of municipal employees saying, "Charge it." But one local expert said the number is not unusually high, and a college professor said it reflects a changing workplace.
Workplace consultant Camille Wright Miller said 40 percent would be high for a corporation, but not so for a municipality where public works employees often work in the field and may need to buy supplies in the middle of a job.
Wright Miller has worked with dozens of municipalities over the years. She said she worked with Lynchburg several years back, and that a large percentage of the city's employees had city-issued credit cards.
"If you look at their cards, they're not using them to go to breakfast," said Wright Miller, a former Roanoke Times workplace columnist and human resources director. "If you're looking at public works, you're looking at duct tape."
After reading a story in Monday's Roanoke Times about the number of employees with cards, my first instinct was to urge the city to cut up some plastic.
My second and prevailing thought was that city officials seem to be running a tight ship with the employee card program, which is subject to four levels of oversight.
City officials have blocked 16 "merchant codes," preventing workers from using the cards in places such as wig shops, massage parlors, liquor stores, funeral parlors, bars and money-transfer businesses.
A 2006 audit found that card purchases were in line and that employees had improved their compliance with policies and procedures over previous audits.
Only about half of the 700 cards are used each month.
As Dowe's case showed, the problems are in the oversight of council expenses.
Still, Wright Miller said, that system worked at some level. Dowe's spending habits raised red flags with the city clerk, who alerted him several times.
Unfortunately for the taxpayers and himself, he didn't heed her admonishments.
Wright Miller said organizations too often overreact when one person abuses expense privileges.
The employer will draft sweeping changes that penalize all employees, rather than dealing with the offender.
Most people, however, don't abuse card privileges.
The shrinking workplace has led more organizations to entrust employees with credit cards, said Robert Trumble, a professor of management at Virginia Commonwealth University.
"We have fewer midlevel managers. We've decentralized. We delegate. For the most part, our employees are better educated," Trumble said.
"A result is more employees have credit cards than it used to be," added Trumble, who also is the director of the Virginia Labor Studies Center.
Also, he said, issuing cards costs less than the purchase authorization processes of yesteryear.
Under that system, employees had to fill out forms to get preapproval for a purchase. Approval could take weeks, Trumble recalled.
Employers now tell workers, "We're going to trust you, so we're not going to require you to request authorizations," Trumble said.
The VCU professor added that employers might pay for the convenience of allowing employees to pick up supplies as needed instead of buying them in bulk and storing them. However, he said, that cost is nothing compared with employees' being out on a job, having to stop what they're doing and use gas to go back to a warehouse to retrieve something.
"The use of these cards ... it's a much more efficient way to do business. But you've got to make sure it's not being abused," Trumble said.
Mayor Nelson Harris called for an audit of city council meal and travel expenses and a look at the policies. He said that one solution to the oversight process for council members might be to add another layer of oversight, perhaps the mayor.
Bad idea.
If the city truly wants to revamp the oversight of council members' spending, the answer is simple: Monitor them like city employees.
