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Credit card laxity cited; 'excessive' meals, gifts listed

Thursday, February 06, 2003

By Joe Grata, Post-Gazette Staff Writer

The Pennsylvania Department of Transportation has wasted taxpayer money on clothes, meals and thousands of gifts and failed to control credit card use by employees, a scathing report to be released today by state Auditor General Bob Casey Jr. will show.

	Related story: Sampling of questionable PennDOT purchases

Purchases defined as "questionable" and "excessive" include cases of custom-made candies, 500 toy ducks with the PennDOT logo, 175 small battery-operated fans, gift baskets sent to Texas, a $510 custom-made pair of scissors for a ribbon-cutting and a bar stool bought at Wal-Mart.

The audit cites lax oversight of nearly 1,100 credit and charge cards used by employees to make 162,000 purchases, totaling $43 million over the course of a year.

A release said Casey will reveal preliminary findings of the audit exposing "alarming waste and misuse of public money" at a news conference this morning at the State Office Building, Downtown.

The report covers one year -- June 16, 2001 to June 15, 2002 -- of the eight-year period of the PennDOT administration under the stewardship of Republican Govs. Tom Ridge and Mark Schweiker. Brad Mallory served as transportation secretary for the entire time.

As a courtesy, Casey provided a copy of the report Jan. 27 to Allen D. Biehler, acting PennDOT secretary under Democratic Gov. Ed Rendell's new regime.

As part of the audit, Casey's Office of Special Investigations raised concerns because 588 PennDOT employees possessed 1,097 Commonwealth Purchasing Cards -- credit and charge cards tied to providers like American Express Co.

The preliminary findings charge that PennDOT's purchasing card coordinator didn't know the number of cards in use at any one time. A computer system that maintains card data could not provide a specific list of which cards were active.

"Thus far, the audit has found evidence that PennDOT and its controller's office failed to provide adequate oversight over cards and their usage, and we have identified approximately $252,116 in what we believe are questionable/excessive purchases," says a cover letter from J. Terry Kostoff, a certified public accountant and Casey's deputy auditor general in charge of audits.

He said the special audit is continuing but the preliminary findings are being released now "to make [the department] aware of situations that we believe need immediate corrective action."

Casey's office began its field work four months ago. It has reviewed documents from PennDOT's controller, vendors and credit cardholders; the department's manual, policies and procedures covering use of the cards; card security; and electronic databases. Auditors have also interviewed PennDOT managers, staff and vendors.

Along the way, it also learned from a vendor that PennDOT paid $33,206 for gift and novelty items, including 2,500 "earth balls" and 408 brass business card cases, outside of the 2001-02 audit period.

Auditors questioned 230 separate credit card transactions for food and catering charges totaling $87,502.

As of Jan. 13, one week before Mallory left PennDOT's administrative position, Casey's office had received detailed information on less than 50 percent of the total spent for food and catering.

But based on available information, the report says food was delivered to PennDOT administrative offices in Harrisburg or "in the field" and to three catered events at public recreation sites, one event at the office of a contractor's association representing the highway building industry and one event held at the office of an unidentified accounting firm.

Of $369,022 in gift, novelty, award and souvenir purchases that the auditor general's office selected for review, $252,116, or 68 percent, were deemed questionable or excessive.

Clothing and apparel charges totaling $28,471 included 1,700 polo or golf shirts, 166 jackets and 645 T-shirts bearing the PennDOT logo.

The auditors said one purchase totaling $19,327 was divided into smaller purchases to circumvent a $3,000 limit on individual credit card transactions.

Casey's preliminary findings also will show:

His special investigations sector noted "inconsistencies with numbers that identify the cardholders who hold multiple cards and per-transaction limits that appear unusual and may have been incorrectly entered" into a computer system for card data.

The purchasing card coordinator monitored purchases only as time allowed because of additional job duties.

Employees submitted wrong or unreadable supporting documents to the PennDOT controller's office, but the office failed to make follow-up requests to correct or clarify the information.

At his news conference today, Casey is expected to call upon Rendell and PennDOT to immediately reform the state's purchase card program, which he says has cost taxpayers $500 million since its inception in the 1996-97 fiscal year.

Joe Grata can be reached at jgrata@post-gazette.com or 412-263-1985.