Credit Card Fraud by Fire Department Official

The South King Country Fire & Rescue found itself on the front page of the local news section of the Seattle Times on Friday, August 8, 2008, and not in the most favorable light.

An assistant fire chief apparently used purchase orders and a district credit card to rack up more than $500,000 worth of personal charges for photography equipment, computer equipment, and firearms. Grant G. Gaspard, who had been with the fire district for 27 years, resigned in July 2008. Gaspard was in charge of the fire district's finances and procurement. The FBI was called in to investigate and Gaspard is being held in prison pending a hearing on Tuesday, August 12, 2008.

This kind of abuse of government credit cards and purchase orders occurs when a public agency doesn’t have sufficient internal controls in place to regularly monitor usage by employees. In a case like this one with a high ranking employee in charge of procurement, it was incumbent on his supervisor and other officials to have more sufficient controls in place.

It is important for there to be a clear segregation of duties so that one individual may not authorize payment, approve the credit card bill, and receive the goods also. While this may be more difficult to have segregation of duties in a small agency, it is critical to have rigorous review of purchases. Supervisors must do more than just sign a monthly approval form of credit card purchases. There is also a clear role for a centralized procurement official to review agency-wide purchases to determine if they are appropriate given the dollar authority level of the individual employee, and what the employee's job responsibilities are.

For example, if an employee's duties are to provide construction maintenance services for the agency and they typically purchase construction materials for renovation projects, a credit card purchase or purchase order requisition for computer equipment might not be appropriate and should be questioned.

System controls and diligence are crucial to preventing fraud. If you are concerned about your agency's operations in this regard, I am available to conduct an assessment of your risks, evaluation the controls and systems you have in place, and making recommendation to help you implement more prudent financial and system controls to prevent credit card fraud. Please contact me if you would like to discuss how I might assist you in this regard.

The South King County Fire & Rescue is a public fire protection district governed by the provisions of Title 52 RCW.