Are You Managing Your Government-Issued Credit Cards?

Government-issued credit cards to agency employees are a good tool for streamlining the purchasing process.  However, if not managed appropriately, these credit cards can also lead to abuses and audit findings.

Practical Tips:  Here's a list of some quick tips for public agencies in managing purchasing cards.

Education:  Make sure your employees understand the expectations and restrictions surrounding use of the purchasing card.  Provide training.  Have employees sign a statement acknowledging the requirements and consequences for improperly using the card.

Limitations on use:  

• Permitted uses:  Be clear what types of expenses are and are not permitted with the card.  Employees should understand they may be required to pay for unauthorized or inappropriate uses of the card.

• No personal use:  Personal use of government issued credit cards, even if the employee pays back the agency, should be prohibited.  In Washington State, the Attorney General's Office has written that such use constitutes lending of public credit, in violation of the state's constitution.

• Dollar thresholds:   Agencies should establish per transaction and per day thresholds for each cardholder that are consistent with that employee's business needs to use the card.

Multiple employees using one card:  Some agencies permit multiple employees to use one credit card - a practice I would personally discourage.  This can make it more difficult to track which employee purchased which items, and decreases accountability.

Processing:  Itemized receipts for purchases should be submitted by employees in a timely manner.  Supervisors should be held accountable for carefully reviewing transactions to ensure they are appropriate purchases and that any dollar threshold limitations have not been violated.

Audit Finding:  The Washington State Auditor's Office recently issued an audit finding against the LaConner School District No. 311 for unallowable and inadequately documented purchases totaling more than $20,000 with government issued credit cards.

Mike Purdy's Public Contracting Blog 

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