Procurement cards re-introduced after alleged embezzlement incident

According to Interim President Robert Martin, FSU’s procurement card system was reinstated at the end of September, after an initial shut down of the system following an investigation of an FSU employee who allegedly embezzled money.

A procurement card is essentially a credit card used by university employees for school business.

The procurement card (p-card) system was temporarily expunged following a routine search of billing statements, during which the University discovered that a now former employee allegedly used a p-card to make illegitimate expenses.

Chief of Staff and General Counsel Rita Colucci said the Massachusetts Attorney General’s Office is currently leading an ongoing investigation into the matter, and that the school also hired an independent auditing firm to conduct its own separate investigation.

Colucci said the results of an audit conducted by the certified public accounting firm O’Connor and Drew indicated that possibly up to $165,000 was spent without proper authorization or documentation.

Martin said a university employee might use a p-card when traveling for school business in order to cover allowed expenditures such as meals, gas and sometimes lodging.

“Just like with anyone else who has a credit card, you get a statement at the end of the month that shows the expenditure you have made. Presumably, along with that statement, you have backup documentation that is receipts,” said Martin.

He said once that information is compiled, the p-card holder provides his or her signature indicating a “true statement of expenditures.”

Then, said Martin, the p-card holder’s supervisor will review those expenditures, also sign off, and send the statement to the Business Office for final approval before the credit card company is sent a check.

“There are supposed to be checks and balances in the system. With your credit card, no one cares if you keep receipts or not. No one cares whether you reconcile when you get your statement each month. … We care about that. … The supervisor is supposed to represent one of the first checks on the system, and the Business Office is supposed to represent the second,” said Martin.

He said the p-card is supposed to “simplify life” because it enables the holder to incur expenditures without “prior approval.”

However, Martin added, “There is supposed to be approval after the fact, and that is where the system can break down. And I think that is what happened here.”

He said the use of a p-card assumes that the holder will use it for legitimate business purposes.

“There typically aren’t a whole lot of constraints on purchasing. You can take your card and go purchase something. So, the problem is once you have purchased something, you can’t un-purchase it. And that’s why having receipts, the backup documentation, the supervisor approval and the Business Office approval is so important.

“When you have a problem, it then becomes a little tough to fix,” said Martin.

Martin said the original p-card system “broke down in a couple of ways.”

First, purchases may have been made which were in violation of university policy and procedures. Secondly, the checks – in terms of backup documentation and sign offs, “did not happen as rigorously as they should have happened,” said Martin.

Colucci added, “The policy itself wasn’t as robust as it could have been. … It wasn’t as thorough as it could have been.”

Martin said p-cards have been re-introduced on a “much more limited basis,” with a very small number of people allowed to use them with restrictions on how the cards can be used.

He said that admissions officers were the first to be reissued to p-cards. “Because they are traveling all the time, they are not only racking up gas expenses on their cars, but they are incurring meal expenses, motel expenses and the like. And their use of the p-cards is limited to that.”

Martin said that before admissions officers were granted p-cards, “They had to go through training.”

Martin added that prior to the alleged p-card fraud, there were about 30 p-cards issued.

“Based upon some conversations I have had with colleagues at other institutions or from what I have heard about, this number was not particularly a lot.

“I don’t have a p-card,” said Martin. “I don’t intend to have a p-card. My advice to most people would be that if you can do your job without it, you’re better off.”

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