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Audit prompts overhaul of Hernando's purchasing card program

By John Frank, Times staff writer
In print: Thursday, October 2, 2008

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BROOKSVILLE — The county's purchasing card program is getting an overhaul after an internal audit released Wednesday revealed inadequate policies to safeguard against abuse of county-owned credit cards.

Auditors discovered no evidence of fraud but felt tighter controls were needed, said Peggy Prentice, the audit director in the Clerk of Court's Office. She said the problems were "not that serious."

The 42-page report found that 10 of 22 recommendations made in a 2005 audit of the purchasing card program were not implemented and some policies were outdated. In fact, only six changes suggested in the previous audit were put in place. The audit also showed that purchasing power was not terminated for one retired employee until nearly 10 months after that person left.

But that is changing. Jim Gantt, director of the purchasing and contracting department, acknowledged some procedures needed modifications. At County Administrator David Hamilton's direction, he already made all the changes proposed by the auditors.

"We should have kept them updated," he said in an interview. But, he added, "The program has been an overall success. We've had no instances of fraud that we are aware of."

Gantt said he took no action after the 2005 audit because it was "not a priority." He felt the controls were sufficient. "These were the opinions of the audit department and we didn't necessarily concur with the audit department," he said.

This second review covered all use of county Bank of America credit cards from November 2005 through the end of 2007.

As of January 2008, 356 county officials and clerk's office employees held purchasing cards. Through the first half of this year, the officials made 6,345 authorized county purchases for a total of $1.1-million. The average monthly total represents a 17 percent increase from November 2005.

The review specifically focused on policies, internal controls and department oversight. Among the suggestions not put in place after the 2005 report: annual inventory counts of purchasing cards, the addition of a county administrator as an account representative and a standard monthly credit limit in the policy manual.

The base limit for a purchase is $1,000 with a monthly limit of $5,000. But 28 county officials, typically department-level supervisors, have larger monthly limits.

One incidental discovery noted in the report concerns the former purchasing card administrator, Darlene Lollie. According to personnel records, she resigned March 21 and left the state.

It appears she and her husband, Kenneth Wayne Lollie Sr., fled to Tennessee and then Alaska after criminal warrants were issued for his arrest. Authorities caught up with the 52-year-old man in Alaska and brought him back to Hernando County, where he faces six counts of grand theft, one count of sexual battery and three other related charges.

Darlene Lollie, 40, never had a county purchasing card and Gantt said the whole episode came as a surprise. "We didn't have any problems with her," he said.

John Frank can be reached at jfrank@sptimes.com or (352) 754-6114.