Audit oversight improved for state spending cards

Thursday, October 9, 2008 | 10:08 a.m. CDT; updated 1:27 p.m. CDT, Thursday, October 9, 2008

JEFFERSON CITY — An audit of state spending cards released Wednesday found that oversight has improved but noted that one former state worker used the cards for thousands of dollars of personal expenses.

The spending cards operate essentially like credit cards and are divided between procurement cards for supplies and fuel cards for gas. A bill for the expenses is then sent to the state agency.

The new report said procedures to ensure the cards are used appropriately has improved since state audits from 2002 and 2003. The report said the Office of Administration — which oversees the cards — has corrected problems dealing with annual assessments of the cards' use, the tracking of purchases for easily pilfered items and the preference for buying products from Missouri businesses.

But the audit also detailed how an accountant for the Missouri Veterans Commission used procurement and spending cards for $14,238 in personal expenses over 20 months starting in June 2006.

The accountant — who was not named in the audit — was fired in February 2008 and prosecuted. She had to repay the state $17,665, which included $3,427 for expense report fraud unrelated to the spending cards.

A spokesman for the Veterans Commission said that more controls have since been implemented, such as regular reviews of spending card transaction reports. Spokesman Daniel Bell said the commission only has two accounting staff, making it difficult to create multiple layers to verify that purchases are proper.

"We don't believe it was a problem with the procedures in place," Bell said. "The employee that did this had access to the cards because she was an accountant, and she basically went around our existing system of review."

Bell said the accountant also had worked for the state auditor's office and was hired by the commission after receiving positive reviews from her former employer.

Bell said the Veterans Commission had identified the fraud about eight months after it started and found $11,771 of the questionable expenses. He said the commission then notified the state auditor and law enforcement about the expenses.

"The fraudulent activities were individually small so that made it hard to detect," he said.

According to the audit, the accountant used Veterans Commission fuel cards to buy $4,608 worth of gasoline for personal use and hid the spending because she was responsible for reconciling fuel receipts to the monthly billing statements. An additional $2,889 of personal expenses were charged to a co-worker's procurement card because the commission had permitted sharing.

The Veterans Commission no longer allows spending cards to be shared and the person responsible for signing off on fuel purchases cannot have a spending card.

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