City of Kennesaw Considers Adopting Pre-Loaded Credit Cards | WABE 90.1 FM

City of Kennesaw Considers Adopting Pre-Loaded Credit Cards

Aug 7, 2017

The way Kennesaw's city ordinance concerning purchasing is currently written City Councilman Jim Sebastian said he could legally get permission to use his city-issued credit card to buy a Mercedes.

"I could tell them I want 10 $3,000 charges to buy my vehicle,” Sebastian said. “And why do I need this vehicle? Because I have to visit a constituent to take them out to lunch."

Thus, the city of Kennesaw is considering adopting P-cards or purchase cards later this month to prevent out of control spending. Unlike city-issued credit cards for government employees, P-cards are pre-loaded with a set amount of funds.

While Sebastian's example is an extreme one, abuse of city-issued credit cards has occurred in metro Atlanta.

In DeKalb County, former Commissioner Elaine Boyer spent time in jail for spending nearly $100,000 on her P-Card.

Sebastian said he wants the city to be proactive in preventing abuse and controlling spending.

But Hans Utz argued it's not as easy as switching out credit cards for P-Cards.

"They can be abused if you don't have the appropriate controls in place,” Utz said.

He's the former chief operating officer for the city of Atlanta and investigated metro Atlanta-area government abuse of credit cards for the website Decaturish with editor Dan Whisenhunt. He said P-Cards are popular because they're efficient, easy to use and cut down on expense reports and reimbursement form paperwork.

But Utz said without clear policies, smaller charges like personal lunches can fly under the radar. In 2015, he found city of Decatur employees spent about $40,000 on food.

Erin Towery teaches accounting at the University of Georgia and is an academic consultant for the Internal Revenue Service. She said audits are the best way for governments to prevent fraud.

“Governments need to think of: ‘How do we show employees that there is a credible threat of audit?’” Towery said. “They need to pick 1 percent of P-Cards or 5 percent of P-Cards that they look at each year and they can be random, that disincentivizes that employee from doing something wrong."