All credit cards suspended for 30 day
By Marley Shebala
WINDOW ROCK, March 8, 2012
Julian did not explain why all the cards were being suspended.
On Wednesday, the Council's Budget and Finance Committee Chairman LoRenzo Bates said that the branch chiefs agreed to the suspension because they were concerned about the "possibility" that p-cards that were funded with external funds were being misused.
"And to avoid that possibility, it was decided that p-cards would be shut down for 30 days and during the 30 days the controller (Mark Grant) could make a determination," Bates said.
External funds are revenue the government receives from state and federal governments through grants and contracts. About 44 percent of the tribe's annual budget is external funds.
The 2012 budget of about $566.7 million consists of $252 million in external funds.
The cards are also funded with tribal money, which is revenue generated from the tribe's taxes, rights-of-ways, leases, court fines and fees, and natural resources such as coal, oil, gas, timber and others.
On Wednesday, Shelly said that he supported the 30-day suspension of p-cards.
"We need to get this under control," he said. "We have to catch up on our books. I know most of our employees do a good job, we just need to get on the same page."
Officials say that more than 1,500 cards have been issued to employees.
Bates recalled that Grant reported to the committee that some credit card holders were not following procurement policies and that they were also exceeding card limits.
Tribal p-cards are issued specifically for travel or program operational costs.
Bates said that he and other Council members only have travel credit cards, which have a limit of $2,500 a month.
Once that $2,500 limit is reached, the card shuts off, he noted.
But he said with cards that are issued to pay for a program's operational cost, the monthly limit could be between $25,000 and $50,000, and when that limit is reached, the card doesn't shut down.
Bates said that p-card policy allows a travel credit holder, like himself, to increase his travel limit but that has to be done through a written request with justification and an approval process.
And he said the increase is only temporary. He added that he is familiar with the process because he asked for an increase in his travel card limit twice.
"We go through that process but it appears from financial reports and audits and that programs don't go through that process," Bates said.
During a joint meeting of the B&F and Law and Order Committee, which was called by Bates and L&O Committee member Edmund Yazzie to address p-cards, staff from the controller's office and justice department presented proposed amendments to the p-card policy to reduce "mismanagement" that included "continuous monitoring" of p-card usage.
According to a Feb. 1 memo from Bates and Yazzie, the meeting was called because the tribe "needs a policy for p-card use because of the recent reports of mismanagement."
Acting Auditor General Elizabeth Begay noted that two audits completed by her office of p-card use by 400 tribal programs showed "serious waste and abuse" by employees from top management down to lower level personnel due to "a lack of controls and enforcement."
Begay was referring to the p-card audits of the Division of Economic Development and the Division of General Services' Office of Occupational Safety and Health Administration.
A December 2011 audit of DED revealed that of the total credit card charges of $20,859 that $20,235, or 95 percent, were "questionable."
Auditors noted that the questionable purchases came from credit card charges by a Real Estate Department staff member included designer handbags, perfume, cosmetics, Pendleton bags and blankets, jewelry, National Finals Rodeo tickets in Las Vegas, an IPhone, IPod, IMac, leather coat, circular saw, torch kit, entertainment center, fire pit, and men's hat, tie and coat from June 2008 to July 2010.
A Feb. 17, 2011, audit of NOSHA found that four employees used their credit cards to purchased more than $97,000 worth of IPods, cell phones, leather jackets, children's clothing, 11 cameras, jewelry from Navajo Arts and Crafts, furniture and other items and racked up $5,200 worth of "questionable" travel costs from March 2008 to October 2010.
These cases were handed to the White Collar Crime Unit in the prosecutor's office.
Begay, who was not included in the p-card task force of finance and justice department staff, noted that the p-card policy has not been updated since it's creation in 2008.
She recommended that before a p-card is issued to an employee that the applicant be subject to a credit card and background check.
The purchase limit on p-cards for operations needs to be reduced along with vendors, she said.
Begay said auditors have found that one card holder used 108 different stores to buy equipment and supplies.
She added that she supported the recommendation to place restrictions on the types of purchases that can be made with operations p-cards.
The current p-card policy has "no restrictions," which is why auditor found an employee using her credit card to buy designer handbags and groceries, she said.
Begay also recommended that one credit card be issued to one department instead of the current practice of multiple cards.
She noted that auditor found that there was more misuse with operational p-cards than travel p-cards.
She also agreed with Law and Order Committee Chairperson Alton Shepherd that the policy must mandate that equipment purchased with p-cards be tagged as tribal property.
Auditors reported that items purchased with p-cards by staff of the Real Estate Department and NOSHA were missing.
Begay emphasized the need for harsher penalties for p-card abuses instead of simply suspending the cards.
Yazzie agreed with Begay and noted that the Law and Order Committee is working on revising the criminal code to strengthen the law.