DENVER – Are large school districts capable of effectively monitoring the transactions of hundreds of employees who are issued school credit cards?
The experience of Denver Public Schools seems to suggest that schools can demand accountability from credit card holders, but rampant abuse still occurs on a repetitive basis.
In 2010, a newspaper review of district credit card spending revealed a great deal of abuse, and prompted the Denver superintendent to issue new rules for credit card use, according to the Denver Post.
Problems solved, right?
Well, no. The Denver district recently conducted an audit of credit card use over the past 2 ½ years and found that a high percentage of transactions were questionable.
A local television station also researched credit card spending over the same period and found many troubling transactions.
Those findings prompted the district to recently switch to another bank, with more modern accountability technology, to track credit card purchases.
Meanwhile, a former Denver school board member said credit card use by employees has “spiraled out of control.”
“I don’t think there are evil intentions here, but I do think, again, with public money there needs to be a clearer oversight and a very transparent process,” Jeanie Kaplan told KDVR, the website of the TV station that reviewed the credit card spending.
“My hat is off to you for finding all these things and asking the questions: Why are district employees using their charge cards for charges, some of which are a violation of their own policy?”
A 2010 investigation by the Denver Post turned up a lot of 2009 credit card spending that raised taxpayer eyebrows.
About $487,000 was spent on food and beverages from outside vendors.
One school in the district spent $1,250 for seven visits to Cafe Chihuahua restaurant, and $800 for an “ethnic food experience” for 100 students at Mataam Fez Moroccan Restaurant, the Post reported.
One school spent $4,113 for doughnuts and burritos for breakfast meetings. One school had an end-of-the-year celebration for staff at a Dave and Busters restaurant, with the district paying $1,200.
Five credit card accounts were suspended in the district during 2009 over questionable use, the Post reported.
“The analysis found so much charged in food, entertainment, travel and other discretionary items that on Friday the DPS superintendent issued new rules for credit-card holders in response to The Post’s findings,” the newspaper reported in 2010.
Forward to 2016.
“A recent internal audit by Denver Public Schools sampled 197 employee credit card transactions and found something wrong with 154 of them – a 78 percent fail rate,” KDVR.com reported.
The television station found about $2 million worth of transactions for items or services that were specifically listed as not being acceptable for credit card use.
“Employees were routinely providing ‘no or inadequate documentation’ and buying items off the ‘prohibited transactions’ list,” the TV station reported.
The following are a few examples: Party City $23,511, flowers $7,806, jewelry $3,900, gift cards $110,638.
A total of $73,917 was spent at two restaurants – BBQ and Famous Dave’s, according to the television station. Another $174,222 was spent at Einstein Brother’s Bagels. A total of $451,658 was spent on pizza restaurants.
There was a $10,634 private charter bus trip to a high school football playoff game.
Then there were the traffic tickets.
“On six occasions from 2013 to 2015, DPS employees were ticketed in school vehicles either speeding or running a red light camera,” the television station reported. “The citations ranged from $40 to $82.
“The tickets were paid for with district-issued employee credit cards. And although, legally, DPS was responsible because it owned the vehicles, FOX31 Denver could find no record that the employees ever paid taxpayers back for their infractions.”
All of the questionable spending has prompted yet another promise from district officials to gain more control over the approximately 900 credit cards issued to employees.
“DPS told the FOX31 Denver Problem Solvers team that starting this week, the district plans to change banks for credit card use,” the TV station reported. “That comes with more modern accounting procedures and will allow the finance department to keep better track of Visa-related purchases.”
Sounds like a plan. But then again, they had a plan back in 2010, and nothing apparently changed.