PCard issues being addressed


On June 14 of this year, the Office of the County Auditor released its pCard audit report. This audit was initiated by the auditor about two years ago, and the administration has been supportive and open throughout the process. The audit did not uncover specific fraud, waste or abuse, but did identify areas of weakness that should be strengthened.

On June 16, 2015, the County Council’s Policy and Intergovernmental Affairs Committee asked the administration to do a presentation on the pCard program in order to get a better understanding of its policies and procedures. The county’s central purchasing agent, Greg King, gave a power-point presentation that included a detailed explanation of existing policies and procedures, and both the benefits and the potential for abuse with pCard usage.

Committee members, including Council Chair Mike White, asked numerous questions about pCard oversight, whether pCards could be used for meals and drinks, and about purchasing and approval procedures. In fact, White, wanting to get a sense of what level of review is required, specifically asked, “What reviews are required to be done by the department manager or the immediate supervisor of whoever is utilizing the pCard?”

Not only did King answer all of their questions, but White appeared satisfied with the answers, even going so far as to thank him for the presentation, saying “It clarifies a lot of things.”

At the time, council members were considering further review of the pCard program and contemplating possible legislation. The committee chair stated that “some legislation may be necessary for changes and/or review of the (pCard) system itself,” but wanted to wait until the audit was completed before taking any action. The administration concurred.

Two years have passed since that committee meeting, and now that the audit report has been completed, the administration and council will be working with the auditor to strengthen the pCard program, policies and procedures.

On May 5, the county auditor, as part of its exit, met with the Department of Management. Based on this meeting, management formed a working group that immediately began a thorough review of the existing policies and procedures, gathered pertinent information from all of the departments, conducted a preliminary analysis of pCard data and usage, and developed strategic enhancements to the program.

The working group also conducted research on analytic software that will allow us to conduct internal audits of pCard data more efficiently and we’re in the process of procuring the software. We researched and identified a learning management system that, once launched, will allow us to deliver and track the training of employees at their desktops. We are currently analyzing pCard credit limits to ensure they are set at appropriate levels based on historical usage and are eliminating pCards with low usage.

Our team also initiated and drafted changes to the pCard policy that specifically address the areas of risk identified by the auditor. The revised pCard policy is in the process of being finalized. We are continuing to work closely with all departments to further reduce risk and address the auditor’s concerns.

The use of pCards, in all levels of government, is the norm and not the exception. Leading organizations such as the International City/County Management Association and the Government Finance Officers Association endorse the use of pCards. These programs have saved taxpayers millions of dollars and create efficiencies that simply cannot be achieved through the traditional paper-based purchase order process. The cost to process a traditional paper-based purchase order is about $50 and, if you multiply that by 25,000 transactions per year, it translates into $1.2 million in taxpayer savings.

Once the pCard audit report was released on June 14, the Department of Management, even with the lack of resources, has moved quickly to address the areas of risk identified by the auditor. The administration appreciates the work of the Office of the Auditor as the pCard audit raised some very good points about our existing program, and in a spirit of cooperation we are working with the auditor and the council to improve the pCard program. It is our hope that when we submit a request to White for needed funding and resources that he will support our efforts.

* Keith Regan is the managing director of Maui County.