A second North Pinellas city is learning the embarrassing lesson that written policies governing employees' use of city credit cards are not enough to prevent unauthorized purchases.
In 2003, the city was Tarpon Springs. After a city employee was arrested and charged with using her city-issued credit card for personal purchases, the public learned that more than 120 city employees were carrying those cards and it wasn't difficult to get around the written safeguards.
Now, the city is Safety Harbor, which is still reeling from the allegation that its longtime finance director, JoAnne Ryan, used a city-issued credit card for personal purchases.
Ryan, a city employee since 1984, was on vacation when City Manager Matt Spoor opened a document listing purchases on the city's American Express credit card in July — a document normally opened by Ryan — and saw suspect purchases for airline tickets, hotel rooms and rental cars. According to Spoor, the purchases apparently were associated with trips by a girls basketball team that includes Ryan's daughters.
Spoor fired Ryan, and an investigation by the Pinellas-Pasco State Attorney's Office is under way.
Fifty-four Safety Harbor employees carry a city Visa card, and 12 also had a city American Express card. The city has lengthy written guidelines for use of the cards, but the Finance Department — Ryan's office — was responsible for monitoring use of the cards. Interestingly, use of city cards for travel expenses was prohibited unless the city manager approved.
As finance director, Ryan had convenient access to credit card records, but it is not necessary to be head of the monitoring department to skirt the rules. In the Tarpon Springs case, the accused offender was a secretary who allegedly doctored the bills before turning them in.
Many local governments now provide a city credit card for employees to use when purchasing small items for their jobs. The cards have replaced the slow, tedious purchasing order process, which required that employees get an approved purchase order from a supervisor before purchasing even small items. The reduction in time and paperwork has been substantial.
However, it is clear that more needs to be done to protect the public purse from government employees tempted by the plastic card in their wallets.
The first rule must be that no government employee is exempt from having their credit card purchases examined each month by someone in a position of authority. In the Safety Harbor case, Ryan's bills should have been checked each month by the city manager. And the city manager's bills should be seen by someone, too — perhaps the finance director or mayor. Employees also should have to provide receipts to back up the credit card purchases, and the receipts should be accompanied by an explanation of the expenditure.
Only those employees who regularly must purchase items should receive credit cards, and there should be a per-purchase spending cap. The annual audit should include a thorough review of credit card bills and receipts.
As the state attorney's investigation proceeds, Safety Harbor commissioners need to hire a forensic accountant for an in-depth review of the city credit card program and Ryan's department.