Credit Card Charges To Get ‘Real-Time’ Review
| Sep 12, 2018 7:00 am
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Posted to: City Hall, Legal Writes
The recent unauthorized use of a city credit card has prompted the Harp administration to use technology to keep a closer eye on who is charging what.
Mayor Toni Harp was joined by her budget and finance team at City Hall Tuesday to announce that the city is now using real-time electronic monitoring of the credit cards issued to seven people in her administration. Three of those cardholders were present Tuesday: the mayor, City Controller Daryl Jones, and Purchasing Agent Michael Fumiatti.
Other card holders include the mayoral deputy chief of staff, the human resources and benefits manager, the deputy information and technology director, and the carousel events coordinator for the parks and recreations department.
A veteran government employee was fired last month after a routine audit of the monthly credit card statement revealed over $11,000 in unauthorized charges to a city credit card. Harp said Tuesday that the audit prompted an internal review of how city-issued credit cards are protected and billing statements reviewed. (Read here about a future Board of Alders review.)
The unauthorized charges were discovered during a routine audit that showed that $11,088.15 in charges were made for room and board at a local motel, mostly during the month of July. The charges were made on a card issued to Mayoral Deputy Chief of Staff Patti Lawlor, who was out on sick leave and could not have made the charges.
Harp said she couldn’t discuss the incident because it remains under police investigation, but she emphasized that the unauthorized use was an “isolated occurrence” and that it was discovered in “a timely fashion using review procedures the city already has in place.”
But it did prompt the city to begin using real-time monitoring of card usage and billing statements as “an extra layer of scrutiny to ensure that every single credit card charge is appropriately authorized and accurately audited,” she said.
The credit cards are used as part of a statewide purchasing card, or P-Card, program provided by the state Department of Administrative Services and administered by J.P. Morgan Chase. The city is one of 21 participating municipalities in the program. New Haven has been part of the program since 2012, said Controller Jones. He noted that New Haven has the distinction of having spent the most through the program. In 2017, the city spent about $2 million, half of which was for one of the city’s print management programs, a bill that is over $1 million, he said.
But Jones was quick to point out that the program requires that the city pay its credit card bills in full every month so that it accrues no interest charges. There is a rebate component to the program, and the city has received about $90,000 back over the last four years, Jones said. He estimates that by the end of 2018, the city could earn at least another $20,000 in rebate money that will go directly to a miscellaneous line item in the current budget.
Budget Director Michael Gormany said that the city isn’t using the credit cards to spend money it doesn’t have, but as a more streamlined way to pay for that which has already been budgeted. Jones added that the city accrues “soft dollar savings” by not issuing checks and generally being more efficient.
Gormany said in addition to reducing the number of individual checks the city writes, the purchasing card program allows the city to avoid delayed payments to vendors and ensures that individual charges are applied to the appropriate city department and covered by the appropriate budget line for that department.
“We are increasingly using the P-card account for big-ticket expenses like utilities and we’re increasingly eligible for rebates that amount to tens of thousands of dollars,” he said. “But there are no additional charges to the taxpayers. These are all charges already budgeted within the budget.”
City Purchasing Agent Fumiatti said each of the aforementioned department heads is issued a card in their name and they are responsible for keeping it safe and secure. Lawlor’s original card was canceled and she has been issued a new one. What cardholders have now that they didn’t before is individual access to the J.P. Morgan website so that they can review their account status. Also, administration officials like Controller Jones and the city’s chief administrative officer have access and can review charges at any time.
“We are actually going to utilize an even more robust program that is provided to us as one of the largest users in the state,” Fumiatti said. “The bills are secure and electronic and they come in a timely fashion so they can be reviewed and appropriately charged. With that said, all of the city’s procurement policies and procedures must be followed as if officials were buying anything else for any other means.
“It’s meant to be more efficient, but not a shortcut,” Fumiatti added.
Gormany said thanks to the fraud protection that comes with the program, the city has already recovered $9,000 of the $11,000 and Jones said the city expects to get the rest back.
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posted by: Noteworthy on September 11, 2018 4:52pm
You Can’t Make This Up Notes:
1. One has been able to monitor credit card statements in real time, online for years. That the city hasn’t been doing so is remarkably stupid - especially if it uses them so much.
2. There needs to be an audit of the mayor’s credit card. In fact, Every statement for the last four years should be posted on line and given to the NHI.
3. It is continually surprising that basic financial controls and concern are not in place and in practice. There’s a lot of flying by the seat of the pants. Then again, when the administration doesn’t address a $30 million deficit as it did last year, is anything all that surprising?
posted by: Bill Saunders on September 11, 2018 6:12pm
The first credit card that needs to be reviewed is the one belonging to spendthrift Mayor Toni Harp!
posted by: Patricia Kane on September 11, 2018 6:37pm
@Noteworthy and Bill Saunders:
A simple FOIA request will get you the information. It should be a public record.
posted by: 1644 on September 11, 2018 6:54pm
The mayor actually did discuss the case on Mayor Monday, saying that the employee has been evicted. From that statement, I surmise she was using the hotel room for regular living, rather than some exciting rondez-vous (my original theory). The mayor’s revelation raises the question of why some one with a steady government paycheck would be evicted.
posted by: Gimp on September 11, 2018 7:48pm
What a pile of steaming whatever you want to call it this is. The administration costs involved in this checking, double checking, and checking again will be horrendous. More taxes will be needed to pay for it. It’s inevitable taxes will go up again next year. Another 11% increase in the mil rate will be good news.
I think the best thing to do is assume the city employees with these credit cards are honest, and rely on routine audits. They did catch this problem. The lady involved should be prosecuted to the full extent of the law, and if guilty, be forced to pay back whatever is missing to the city.
As to an audit, it would be really good if the Independent or the Register did an FOI on Mayor Harp’s spending on her city credit card, and let all us suffering tax payers see where our taxes are going.
posted by: robn on September 11, 2018 8:06pm
So whats the penalty for spending 11% more money than you have?
posted by: Bill Saunders on September 11, 2018 8:43pm
Doesn’t somebody pay ‘these bills’ on a monthly basis?
How freakin’ tough is it to figure out!!!!
posted by: Bill Saunders on September 11, 2018 8:45pm
That sounds like a job for NHI!
posted by: Noteworthy on September 12, 2018 7:46am
So do we get our clothes back?
posted by: FacChec on September 12, 2018 10:34am
Budget Director Michael Gormany said” that the city isn’t using the credit cards to spend money it doesn’t have, but as a more streamlined way to pay for that which has already been budgeted.”
If the finance committee of the Board of Alders really want a public hearing and full investigation seeking transparency, they will need to review the credit card line items(if any) within the $547M budget budget they approved unanimously by voice vote and not roll call vote, wherein the media and the public could have reviewed and questioned the matter.
But no, it is just to difficult and time consuming for this committee and full BOA to simply look more closely at these kinds of details( hidden in their plain sight(just like the raises) which cost the taxpayers $$$Ms
once again D- (minus)
posted by: Dennis Serf on September 12, 2018 3:32pm
I sent the below FOIA request to the City this afternoon. If you are interested in bringing positive change to New Haven, consider joining the effort at the link below.
Good day Ms. Foster -
I recently read in the New Haven Independent (NHI) about the unauthorized use of a city credit card.
In an effort to understand which City employees have access to city credit cards and what expenses are made via city credit cards, I am respectfully requesting the following information:
1. A complete copy (in PDF, and Excel/CVS editable format) of all City credit card statements since January 2016, identifying the individual credit card holder, amounts spent, and a description of the charges. It is my experience these statements are readily available in both annual statements and monthly statements from all credit card providers.
In an effort to understand the City’s policy and practice with respect to reimbursing City employee’s for expenses (including, but not limited to T&E, Travel and Entertainment, Meals and Entertainment) paid by a City employee’s on their personal account, and then reimbursed by the City to the City employee, I am respectfully requesting the following information:
1. A complete copy (in PDF, and Excel/CVS editable format) of all reimbursements by the City to all City employees since January 2016, identifying the City employee, amounts spent, and a description of the reimbursement. It is my experience these records are readily available in most accounting packages.
Please confirm receipt of this email, and please let me know when I may expect to receive the documents.
posted by: Bill Saunders on September 12, 2018 5:30pm
Good Luck with your request, Dennis….
Interested to hear about the run around….. and the timetable for ‘full compliance’ with your request…
posted by: Gimp on September 12, 2018 10:40pm
To Dennis Serf. I have had some experience in FOI requests, but not in New Haven. Requesting documents in a specific format will not work, nor will they be sent to you. There are specific deadlines by which documents must be made available, and you should either do your own research on this, or get legal advice. You will probably have to go to City Hall to read what is available, and if my experience with the State is anything to go by, you will be charged for all copies you make. At 25c a pop this can be very expensive. It is probable they will have an attorney with you the entire time you look at the documents, which is very intimidating, and will make you feel like a criminal. You will also need to be highly specific in what you are looking for, otherwise many documents will not be produced. You really do need an attorney on board to help you with this.
posted by: Bill Saunders on September 13, 2018 2:02pm
I have done my fair share of FOI requests and Gimp is right about ‘specificity’ and ‘cost’.
Also, as a private citizen, you will experience a rigamarole that an attorney will not. Follow-up is crucial on your end… I have had requests satisfied in the statutory ‘3 business days’, or I have had them drag on for three months with dozens of follow-up emails on my part. Expect to hear some crickets. Bureaucracies win these little skirmishes by wearing your down. Don’t stand for it!. Follow-Up, Follow-Up, Follow-Up.
Ultimately, I would ask to ‘review the documents’ rather than ‘receive copies’. That way you can ‘cherry pick’ the important documents that are ‘important’. I found that little strategy was the only reasonable way to allay costs—otherwise, I would get the ‘kitchen sink’ and pay for a lot of pages that were not specifically relevant, but would certainly fall under the ‘compliance’ on the City’s part.
On specificity—Remember, they know what you are looking for, and are going to go to great extremes to see that you don’t get the information requested. This is why THEY have attorneys. I remember one time I requested ‘cancelled checks’ for an account. They replied that they did not have cancelled checks, that was all electronic and at the bank. There was also a recent FOI ruling limiting access to electronic records that was waived in front of me. Ultimately, the magic words I needed was ‘check request forms’, and there was all of the info that City Hall knew I was looking for to begin with….
Again, Good Luck Dennis….. keep us posted!!!!
I urge everybody to engage the FOI process at some point… it is the only way to ‘incite transparency’.
posted by: Bill Saunders on September 13, 2018 3:35pm
I have been left in an office alone before to review documents…...