Best Practices for Managing Government Credit Cards

Government issued credit cards, sometimes known as "Purchasing Cards," "Procurement Cards," or "P-Cards" can be a great tool to simplify the procurement process.  However, they come with risks if there are not adequate controls in place.

Audit finding:   The Washington State Auditor's Office recently issued an audit finding to the Grays Harbor County Fire Protection District No. 16 for not having adequate supporting documentation, such as invoices or detailed receipts, to support $19,695 in expenses with District issued credit cards.  The audit cited purchases for food, fuel, clothes, holiday decorations, supplies, and lodging that were not documented, raising the question whether they were an allowable use of public funds as required by state law.

Practical tips:

• Policies:  Does your agency have clear policies on the acceptable and unacceptable purchases? Do your policies prohibit an employee loaning their card to another employee?  Do the policies establish the maximum dollar amount per purchase and per day, and prohibit splitting of purchases to be less than the established thresholds?

• Training:  Proper training should be mandatory for anyone issued an agency credit card, so they understand the expectations and restrictions surrounding use of the credit card.

• Certification:  Employees should be required to sign a statement acknowledging the policies surrounding use of the card and the consequences for using it improperly. Employees should understand they may be required to personally pay for unauthorized or inappropriate uses of the card.

• Documentation:  All purchases with an agency credit card should be documented with invoices or detailed receipts.

• Monitoring:  All purchases should be reviewed by a supervisor on a monthly basis before payment to ensure they are appropriate uses of the card and do not violate agency policies.

More information:  

• Click here to read the audit finding.

• Click here to read other blog postings of mine relating to government issued credit cards.

Note:  This blog posting is a repeat of one from May 8, 2013.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

IRS Credit Card Abuses

The U.S. Treasury Department has released a report showing improper purchases by IRS employees using  federal credit cards. 

Improper purchases:  Included in the list of abuses were purchases for the following:

• Wine for an expensive luncheon
• Romance novels, diet pills, steaks, and baby related items ($2,655 by one employee)
• Renting a popcorn machine ($3,152)
• Kazoos and bathtub toys for managers meetings ($418)
• Nerf footballs never used ($119)

The statistics:  

•  In 2010 and 2011, the IRS spent nearly $108 million on more than 273,000 purchases with credit cards.  
• There were 327 cases where employees divided purchases to avoid the $3,000 per transaction limit.
• A total of just 94 employees were responsible for the abuses and none of the employees were disciplined.

More information:  Click here to read more information about the Inspector General's report.

Internal controls:  Agencies with government issued credit cards should have clear internal controls and monitoring to prevent abuses.  Click here to read some of the other blogs I've written on the subject.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Monitoring for Purchasing Card Abuse and Fraud

Purchasing cards (also known as procurement cards or P-cards) can be an effective tool for streamlining and decentralizing some purchases, especially in an era of decreased resources.

There are, however, both internal and external risks to purchasing card programs.

Internal risks:  Purchasing card programs should be carefully monitored to ensure that employees are using the cards appropriately:

• Legitimate agency needs:  Are the charges legitimate purchases for the agency's business needs?

• No personal use:  Are there controls in place to ensure that the cards are not used by employees to buy goods and services for their personal use?

• Competition:  Are employees obtaining competitive prices for goods and services purchased with the cards?

• Dollar thresholds:  Are employees staying within authorized dollar amounts for each transaction and on a per day basis?

• Loaning of cards:  Are there controls in place to prevent employees from loaning their card to other employees to make purchases?

External risks:   In addition, there are external risks to purchasing cards that include the following:

• Reporting lost cards:  Do employees with cards know the process for reporting stolen or lost cards?

• Reviewing transactions for fraud:  Do employees regularly review all transactions for potential fraudulent purchases?  A public agency in Washington recently discovered that someone outside of government had hacked into a purchasing card account, using the card number to make several purchases.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Documenting Government Credit Card Purchases

Government issued credit cards, sometimes known as "Purchasing Cards," "Procurement Cards," or "P-Cards" can be a great tool to simplify the procurement process.  However, they come with risks if there are not adequate controls in place.

Audit finding:   The Washington State Auditor's Office recently issued an audit finding to the Grays Harbor County Fire Protection District No. 16 for not having adequate supporting documentation, such as invoices or detailed receipts, to support $19,695 in expenses with District issued credit cards.  The audit cited purchases for food, fuel, clothes, holiday decorations, supplies, and lodging that were not documented, raising the question whether they were an allowable use of public funds as required by state law.

Practical tips:

• Policies:  Does your agency have clear policies on the acceptable and unacceptable purchases? Do your policies prohibit an employee loaning their card to another employee?  Do the policies establish the maximum dollar amount per purchase and per day, and prohibit splitting of purchases to be less than the established thresholds?

• Training:  Proper training should be mandatory for anyone issued an agency credit card, so they understand the expectations and restrictions surrounding use of the credit card.

• Certification:  Employees should be required to sign a statement acknowledging the policies surrounding use of the card and the consequences for using it improperly. Employees should understand they may be required to personally pay for unauthorized or inappropriate uses of the card.

• Documentation:  All purchases with an agency credit card should be documented with invoices or detailed receipts.

• Monitoring:  All purchases should be reviewed by a supervisor on a monthly basis before payment to ensure they are appropriate uses of the card and do not violate agency policies.

More information:  

• Click here to read the audit finding.

• Click here to read other blog postings of mine relating to government issued credit cards.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Webinar on Best Practices for P-Card Programs

Webinar:  

Best Practices for Building & Strengthening

 Your P-Card Program

When:   Wednesday, January 23, 2013 (1:00 p.m. to 2:30 p.m. Eastern Time)

Sponsored by:  NIGP (National Institute of Governmental Purchasing)

Cost:

• $59 for members
• $180 for non-members

Presented by:  Stacy Gregg, CPPB, Procurement Specialist II, Richland County School District One, Columbia, SC

Information and Registration:  Click here.

Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Forum on Purchasing Card Program

4th Annual Washington State Purchasing Card Program Forum

When:  September 17, 2012 (8:30 a.m. to 4:00 p.m.)

Where:    Olympia, Washington (1500 Jefferson Street SW, 1st Floor Presentation Room)

Sponsored by:  Washington Department of Enterprise Services (DES).  For more information about DES' Purchasing Card program, click here.

Agenda:

• Purchasing Card Progress Summary (U.S. Bank)
• Program Contract Updates (DES)
• Payment Analytics - automated card program monitoring (U.S. Bank)
• Card Program Optimization Analysis (U.S. Bank)
• Card Industry Updates (VISA)
• Access Online Updates Q&A (U.S. Bank)

Information and Registration:  Click here.

Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Baltimore Procurement Cards Plagued by Questionable Expenses

The Baltimore Sun recently released a scathing article questioning a large portion of the half million dollars charged to city schools credit cards. The cards, which the school district calls procurement cards, have been used to pay for:

• Expensive retreats for agency staff (up to $450/person)
• Roughly $67,000 in administrators' travel expenses (in spite of a policy against using the cards for travel)
• Dinners sometimes topping $100/person (including a student leadership conference dinner at a Hooters)
• $13,600 in catering for the district's central office

Officials defend charges:  The school district has taken some steps, such as launching an investigation into a few of the charges and beginning work on an overhaul of card use guidelines. 

However, the district CEO and other officials staunchly defend many of the expenses as key to the district's mission. For instance, they describe travel as important to professional development and the district's national reputation, expensive dinners as a vital setting for working out deals and contracts, and pricey catering as encouraging office "fellowshipping."

Policies and public perception:  While some of charges may indeed be viewed as a gray area (when do travel expenses for training and conferences become excessive, for example), many reveal a lack of clear, well-enforced policies. At a minimum, the issues being covered by the press reveal card users who appear to be out of touch with public perception. 

Managing procurement cards:  There are three main components to responsibly managing a purchasing card program - and avoiding a front-page scandal:

• Clear policies:  The first step is making sure there are clear rules reflecting the agency's mission and values that define acceptable use of an agency credit card 

• Education:  Proper training should be mandatory for anyone who who uses an agency credit card. Employees should also be required to sign a statement acknowledging the policies surrounding use of the card and the consequences for using it improperly.  

• Enforcement:  All purchases with a card should be documented and regularly reviewed to ensure they are appropriate uses of the card and do not violate agency policies. Timely review is essential to identifying and resolving problems before they get out of hand. 

Additional information:

• The original article from the Baltimore Sun drawing attention to the issue

• An additional article from the Sun on their investigation 

• Coverage of the controversy on Baltimore's WJZ

Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 
http://PublicContracting.blogspot.com

Fuel Card Problems Lead to Audit Finding

The Washington State Auditor's Office recently released an audit finding on misuse of fuel cards by an employee of the Mt. Pleasant School District in southwest Washington. 

More than $1,000 of personal use:  The audit finding and criminal investigation came after a 27-year employee was found to be using a District fuel card for personal fuel purchases estimated to exceed $1,000. The employee resigned shortly after pleading not guilty to a third-degree theft charge in court.

Systemic problems:  The auditor identified a couple of systemic problems that made the abuses possible:

• The District did not monitor small purchases and reimbursements
• Inadequate verification that purchases were actually for the District
• Failure to require and retain proper documentation before making payments

Audit report:  Click here to read the audit report and finding.

Lessons learned:  Small purchases can often be streamlined through tools such as fuel cards, credit cards, store credit accounts, and petty cash accounts, but use of these methods of procurement can also lead to fraud and waste if they are not adequately monitored. It can be easy to overlook the other side of the equation - verifying and documenting the legitimacy of small purchases - especially if appropriate policies, procedures, and training are not in place.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

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 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Free Purchasing Card Webinar

Free Purchasing Card Webinar: Ins and Outs of Rebate

When:  January 25, 2011 (11:00 a.m. - 12:00 p.m. - PDT)

Where:  Olympia, Washington (1500 Jefferson Street, Room 2208)

Sponsored by:  Washington State Department of Enterprise Services, Office of State Procurement, is hosting this National Association of Purchasing Card Professionals (NAPCP) webinar

Instructor:  Lynn Larson, NAPCP

Cost:  Free for those attending in Olympia, Washington.  There is a cost for those attending from another location ($99 for NAPCP members; $199 for non-NAPCP members)

Agenda:

• The connection between interchange and rebate (and why interchange has been in the news)
• Factors that impact the extent to which an end-user's card program is profitable for the card provider
• Common elements of revenue sharing incentives and strategies to optimize these incentives
• How rebate compares to other P-Card benefits
• Considerations for internal accounting treatment of rebate

Information and Registration:  Click here for more information.  

• E-mail Neva Peckham at neva.peckham@des.wa.gov to register for attending at the free Olympia location.   
• Click here for signing up (with cost) for attending the webinar through NAPCP from your own location.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Personal Use of Government Credit Cards Prohibited

In a June 2, 2011 informal opinion, the Washington State Attorney General's Office provided its analysis on whether a local government official or employee may use a government issued credit card for personal purchases and then reimburse the agency for the cost.

Summary of Opinion:  The Attorney General's opinion summarized its conclusion as follows:

"Under the Washington State Constitution and the laws of this state, included RCW 43.09.2855 and RCW 42.24.115, a local government official or employee may not use a publicly-issued credit card for personal purchases, even if the person pays off the card prior to the date that the bill becomes due."

Auditor's Response:  The Washington State Auditor's Office has issued the following statement in response to the Attorney General's opinion, noting that they will begin enforcing this provision during 2013 for 2012 year-end audits:

"Since we want to make sure local governments hear of this guidance and have time to put procedures in place to comply, we will not hold local governments to this interpretation for the 2011 fiscal year.  We will provide information on this opinion to local governments in various ways.  We will begin to audit and report on this issue during 2013 for the 2012 year-end audits."

In the News Recently:  The Port of Seattle elected commissioners were recently cited in an independent ethics report for having used their port issued credit cards for expenses that were not reimbursable by the port or that were clearly personal expenses.  Click here to read my November 1, 2011 blog entry on this subject.

Do You Have a Policy?  If your agency issues credit cards to employees:

• Do you have clear policies prohibiting use of the cards for personal use?  
• Do you regularly monitor charges on the credit cards to ensure they are appropriate government expenses?
• What are the consequences for failure of employees to use the credit cards appropriately?

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Port of Seattle Cited for Improper Use of Agency Credit Cards

According to an independent ethics investigator hired by the Port of Seattle, all five elected port commissioners improperly charged personal expenses to a Port issued credit card.   Eventually, they each paid the Port back, although some of their payments were delayed by months. 

Apparently, the commissioners were not clear about whether their charges were reimbursable as part of the commission duties.  Most of the items charged were for food, drink, and travel they thought were related to Port business but that were deemed improper.   

More Information:  Click here to read a November 1, 2011 Seattle Times article on the subject.  Also note the citizen comments on the article.

Lessons Learned:

• Clear Policies:  Have clear policies related to what are reimbursable expenses for elected officials and public employees, and what may be charged to government issued credit cards.

• Ask Questions:  If you have been issued a government credit card and are unclear about what it may be used for, ask for clarification.

• Monitor Credit Cards:   If you have agency credit cards, make sure that someone is monitoring their use to ensure that all charges are appropriate and for official business.

• Training:  All public agencies, including elected officials and employees, should attend required ethics training on an annual basis.  It is critical that public agencies be made aware of and be sensitized to a variety of ethical issues related to their work.  The state of North Carolina requires this type of training.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Does Decentralization of Procurement Work in Tight Budget Times?

According to one recent estimate, public agencies cutting 35,000 jobs a month as the Great Recession takes its continuing toll.  

Job Cuts in Procurement and Contracting:  As agencies eliminate jobs, the area of procurement and contracting is not exempt.  And yet the work of developing bids and solicitations, negotiating contracts, complying with grant requirements, and administering contracts continues - just with fewer centralized staff.

Impacts of Decentralization:  The economy has forced some agencies to decentralize parts of their procurement and contracting functions by delegating authority to departments who have the direct need for the services.  There are a number of risks associated with decentralization including the following:

• Increased Bid Protests:  Increased bid protests as inexperienced staff manage the process.

• Project Delays:  Delays in projects due to lack of familiarity with how to procure goods and services.

• Audit Findings:  Audit findings by state and federal auditors for failure of agencies to follow applicable procurement regulations.

• Loss of Accountability:  Unclear scopes of work written by department staff without the benefit of centralized review.  This may result in contractual problems of holding businesses accountable for the work contracted for.

• Higher Costs:  Higher costs for agencies who no longer have the strategic procurement and contracting experts to help get the best deal for the public agency.

• Ethical Issues:  Questionable ethical behavior by public sector employees not sensitized to, or aware of, the importance of maintaining a fair and transparent bidding and selection process.

What Work is Decentralized?  Some agencies have decentralized lower dollar value procurements back to departments.  Others have increased use of government issued credit cards as a means to deal with reduced staffing.

Managing the Decentralization:  As the economically driven decentralization continues, here are a couple of actions that agencies can take to help reduce negative consequences:

• Training:  Provide in-depth training to staff who have been delegated with responsibility for procurement and contracting.  The training should also include training on ethics in public contracting.

• Procedures:  Establish clear policies and procedures to deal with the new environment.

• Checklists:  Develop simplified checklists that can help those doing procurement and contracting with knowing how to follow the right steps.

• Check and Balances:  Ensure there are sufficient checks and balances in place to reduce risks of one person taking inappropriate procurement and contracting actions.

• Ongoing Pre-Audits:   Establish a process for regular pre-audits by either agency staff or outside experts to ensure the process is working properly, and to help make changes where necessary.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Managing Your Procurement Cards

Procurement cards are a great tool to expedite the purchasing process for public agencies.  However, the use of these government issued credit cards also must be managed carefully to prevent misuse, fraud, and non-compliance with public agency policies.

Audit Finding:  In Washington State, the State Auditor's Office recently took the Edmonds School District No. 15 to task with an audit finding for the District's failure to enforce their existing policies.  In  fiscal year 2010, the District spent almost $3.5 million with the procurement cards.  The audit found that the District did not monitor its own policies or notify users when their use of the cards violated the District's policies.  The violations included the following:

• Split Purchases:  The District has a single purchase threshold of $2,500, but did not monitor purchases totaling $8,990 that appear to have been an attempt to circumvent the single purchase threshold.

• Reconciliation:  The audit noted "four instances when original receipts and a signed reconciliation report were not provided to the purchasing department by the 15th of the month."

• Documentation:  Two purchases "lacked itemized receipts for meals purchased while the cardholder was in travel status which does not comply with state law (RCW 42.24.115) or District policy."

Practical Tips:

1. Have policies and procedures in place for the use of procurement cards.
2. Do not permit purchases to be split to be less than the single transaction threshold
3. Follow enforce the policies and procedures 
4. Hold supervisors accountable for carefully reviewing purchases made by their employees.

Mike Purdy's Public Contracting Blog 

© 2011 by Michael E. Purdy Associates, LLC 

http://PublicContracting.blogspot.com

Mismanagement of School District Credit Cards

The Washington State Auditor's Office recently issued an audit finding on weaknesses in the Seattle School District's management of District issued credit cards.  The June 21, 2010 audit report covers activity during 2009.

Issues noted in the audit finding include the following:

• Late Fees:  The District was assessed with late payment fees for failure to pay the credit card bills on time.  There were inadequate records by cardholder to track the late fees.  In addition, the District charged the late fees to an "other supplies" account, rather than to an account to track penalties and fees.
• No Receipts:  Receipts for three credit card transactions totaling $5,172 were not in the file.
• Inappropriate Use of Cards:  In violation of the District's policies, the audit found instances where the credit cards were used to pay for hotel and food.
• Authority to Use Cards:  The audit found that not all employees issued a credit card had signed the required "Memorandum of Understanding" outlining the permitted uses and expectations for cardholders.  In addition, some cards were issued to departments, rather than individuals, raising questions about who is responsible for the cards.
• Non-Compliance with Dollar Limits:  According to the audit report, "District personnel may charge up to $1,000 per procurement card transaction and make up to five transactions each day.  Five transactions we examined were over the $1,000 limit." 

Issues Not Resolved From Prior Years:  In the auditor's 2005 and 2006 audit reports, the auditor "communicated weaknesses in procurement card controls to District management and emphasized the need to monitor credit card charges to prevent noncompliance with District policy."  The District has apparently not resolved the issues.

Audit Report:  Click here to read the audit report and finding, on pages 23 and 24.

Lessons Learned:  Government issued credit cards are an effective procurement tool.  However, they must be managed and monitored carefully by supervisors and managers, consistent with an agency's established policies and procedures.  Without such monitoring, they can be subject to abuse.  Other public agencies often find themselves in the headlines when it is revealed that agency credit cards have been used for purchasing personal items for government employees.

Conduct A Pre-Audit:  If your agency currently uses credit cards, you should consider conducting your own pre-audit of your compliance with your own policies.  Do you have the necessary systems in place to monitor the usage of the cards?  If you would like assistance in either structuring a pre-audit that you can conduct, or having me conduct such a pre-audit, please contact me.

Lax Management of Fuel Cards Cited in Audit

The Washington State Auditor's Office, following up on 2008 audit findings regarding the use of fuel cards for the State Department of Ecology, found that the department was still not appropriately monitoring the use of the fuel cards for the department's 400 vehicle fleet, nor were the cards secured and reconciled to purchase card documentation.

Click here to read the audit report.

Manage Cards:  If your agency uses fuel cards or purchasing (procurement) cards, it is important to have clear guidelines, monitoring, and reconciliation of the usage of the cards to prevent abuses from occurring.

$15,000 Fraudulent Use of Federal Credit Card

An employee of the U.S. Bureau of Prisons pleaded guilty on May 14, 2010 to fraud charges filed against her for her purchase of more than $15,000 of personal items with her employer's credit card.  Personal expenses charged against the credit card included iPods, TVs, DVD players, and $6,000 of gas for her personal car.

Michelle Dunmeyer will be sentenced on July 13, 2010 and could face up to ten years in prison in addition to a fine of a half million dollars.  She will also be required to pay restitution to the federal government.

For more information: Visit the website of the Georgia Tech Procurement Assistance Center.

Caution:  Government issued credit cards are a great tool for streamlined procurement.  However, they must be managed carefully by public agencies.  Without sufficient management controls, reporting, and accountability systems in place, abuses may occur.  If you would like to discuss having me conduct an audit of your credit card program for risk factors, please contact me.

Training: Controlling Purchasing Card Risk

Teleconference Training: Controlling Purchasing Card Risk

When: July 16, 2009, 10:00 a.m. to 11:30 a.m. (Pacific Time)

Where: Live Teleconference in your office

Cost: $199

For more information and to register, visit Lorman Education Services

Instructor: Richard J. Palmer, Ph.D., CPA, CMA, CFM, Eastern Illinois University

Purchasing cards represent a value and efficient means for government agencies and businesses to procure goods and services. Unfortunately, without sufficient control mechanisms in place, they can also be abused by employees using them for personal gain. What types of controls should your organization put into place to avoid abuse, fraud, and audits?

See my blog from January 11, 2009 on the audit of the California Avocado Commission and their abuse of government issued credit cards.

If you would like to discuss having me conduct a pre-audit of the risks associated with how your agency is currently managing your purchasing card program, please contact me.

Prison Term for Abuse of Government Credit Card

On May 8, 2009, a former assistant fire chief of a public fire district in the Seattle area was sentenced to three years in prison and ordered to pay almost $1 million in restitution to the South King County Fire & Rescue District.

Grant Gaspard used purchase orders and a district credit card to pay for hundreds of thousands of dollars of personal charges. He stole more than $775,000 from the district over a six year period. He also submitted a falsified invoice and received a $98,000 check at his home.

Gaspard resigned his position in July 2009 after more than 27 years with the fire district. The South King County Fire & Rescue is a public fire protection district governed by the provisions of Title 52 RCW.

A fundamental principle of government contracting is that there must be checks and balances and a separation of duties to prevent fraud and abuse. In addition, public agencies that issue government credit cards to their employees as a method of streamlined procurement must have clear procedures, expectations, and monitoring systems in place to prevent misuse of the credit cards.

Visit the Seattle Times to read more.

Contracting Strategies in a Difficult Economy

In these difficult economic times, here are a half-dozen contracting strategies that public agencies may consider pursuing in order to save money:

1. Consolidate Services. Public agencies in the same geographic area could consolidate services provided by each agency. By consolidating services provided by two or more agencies, there should be savings in either contract or staff costs, or both.
   
   
2. Piggybacking. Public agencies could take greater advantage of already solicited contracts by other agencies, a practice often known as "piggybacking." Check your state laws on this to ensure you can do this. Often, there is a requirement that the agency whose solicitation and contract you are using went through at least as stringent of a selection process as you would be required to go through.
   
   
3. Consolidate Purchases. A variation of piggybacking involves various agencies banding together to solicit for goods and services, taking advantage of cost savings that may accrue from larger volume purchases.
   
   
4. Negotiating. Many public agencies are paying closer attention to negotiating better financial terms with vendors, especially consultants, whose prices are normally subject to negotiations. Hourly rates, overhead and profit, mark-ups are some of the area where cost savings may be obtained.
   
   
5. Non-Renewal of Contracts. Some public agencies are choosing not to renew multi-year contracts and are going out to bid now in hopes of obtaining lower prices that will last through a new multi-year contract.
   
   
6. Credit Cards. As contracting and procurement staff become victims of budget cuts in agencies, delegation of purchasing and contracting authority through government issued credit cards (P Cards or Procurement Cards) may become more desirable. There are clearly risks involved with the use of such credit cards, especially if there is not sufficient systems in place to guard against abuse.

These difficult economic times call for creativity in how to manage and do more with less resources.