Mayor’s Staff Will Undergo Additional pCard Training
Members of the Hawai’i County Mayor’s Office with county purchasing cards (pCards) will be getting additional training in the future.
Hawai’i County Managing Director Wally Lau said Monday that a recent audit report by Hawai’i County Legislative Auditor Bonnie Nims, which found both the Hawai’i County Mayor’s Office and the Hawai’i County Department of Liquor Control used their pCards for questionable transactions last year, has sparked his office to take action.
In response to questions about Nims’ report Lau said, “we commend her for all her hard work and the work of her staff. They did a great job and made some recommendations for us.”
One recommendation made by the report was that the county administration provides ongoing training to departments. Lau said his office will be planning additional training for members of the Mayor’s staff who use pCards. Lau did not provide a date for the training.
“The bottom line is we’re moving forward and appreciate the recommendations and will work hard to see what we can do,” he said.
Nims said the county is not required to make the recommended changes, regardless of the report.
“All we can do is make recommendations. It’s up to management to choose to accept them or not,” she said.
The audit found that the majority of county departments reviewed used their pCards correctly.
However, there were some issues that surfaced following the audit, and Nims recommended the county address these problems by updating the county code, treating all employees and departments fairly and equitably, updating pCard policy and procedures, strengthening monitoring practices to ensure expenditures are for a legitimate public purpose and demonstrate a clear benefit to Hawai’i County and taxpayers, and using available technology from the card issuer to improve monitoring practices.
The purpose of the audit was to determine whether current internal controls are adequate and effective at reducing the risk of fraud and misuse of pCards. The audit also evaluated the appropriateness of pCard purchases and identified potential areas for improvement.
According to the report, some pCard transactions did not follow county policy and may have violated state law. The audit also exposed that some reimbursements were not always made in a timely manner.
The report showed that there were 164 transactions totaling $29,961.41 that did not follow county policy, had questionable public purpose, and may have violated state law.
Last year, the county used approximately 236 pCards spending $1.15 million. The latest audit included a review of 362 transactions totaling $68,576.71 from 2009-2015.
There were 145 transactions from the Hawai’i County Mayor’s Office that violated county policies, had a questionable public purpose, and may have violated state law.
About 26 of the said transactions were for personal purchases totaling $3,689.34 and 116 transactions reflected miscellaneous reimbursed purchases for a total of $17,723.04. Three transactions were listed as other questionable purchases totaling $2,271.03 and 19 of the 164 questionable purchases came from the county Department of Liquor Control for $6,278.00 for personal purchases.
The audit report, which identified 45 transactions for a total of almost $10,000 for personal charges, states the use of the county pCards for personal purchases is not in accordance with the Hawai’i State Constitution, Article 7, Section 4 that requires public money to be used for a public purpose. In addition, both the state and county pCard policy strictly prohibits personal use of the card, even if the money is reimbursed.
As for the 116 miscellaneous transactions, Nims said that detailed itemized receipts or other supporting documentation were not provided.
According to the report, common business practice as well as the state and county’s pCard policy requires original, detailed, and itemized receipts to support transactions, and the county did not clearly demonstrate whether certain transactions were for a legitimate department purpose. Therefore, Nims said that without documentation, they could not determine if the transactions complied with the State Constitution.
There were also three purchases that were noted as questionable for a total of $2,271.03.
The report also identified four miscellaneous or personal transactions totaling $282.95 that were not reimbursed until after the audit report.
The audit also found that the Mayor’s Office was held to a different standard than other departments.
According to the report, “it appears the Mayor’s Office was not always held to the same requirements as other departments. We recognize the Mayor’s Office has duties and responsibilities that are not standard, and in fact, are often extraordinary in nature. However, there is no written statute to exempt any employee and/or department from following state law and county policies and procedures.”
Hawai’i County Mayor Billy Kenoi is currently being investigated by the state attorney general following reports of him using his pCard for personal purchases.
Nims said she’ll be looking at the pCard transactions again next year during the annual fiscal review. She also said she’ll be answering any questions to the county council if the issue becomes an agenda item.
Several departments were recognized for using their pCards correctly, including Hawai’i County Civil Defense, Environmental Management, Human Resources (including the Health and Safety Division), Prosecuting Attorney, Office of the County Clerk (including the Elections Division), and Hawai’i County Council.
View the complete report here.
About pCards: The state of Hawai’i’s Procurement Office established the purchasing card program in 2001 to improve efficiency, flexibility, and convenience when buying goods and services. Hawai’i County adopted the program in 2003. The Hawai’i County Department of Finance administers the program and coordinates with the State Procurement Office.