2008 Woodie Awards
Regents credit card audit finds fraudulent charges
BRIAN MINK
Issue date: 3/19/08 Section: News
Misuse of University system credit cards is due to poor supervision, documentation and policy guidance for employees, according to an audit presented Tuesday to the Board of Regents.
Ron Stark, the associate vice chancellor for internal audit for the Board of Regents, presented an assessment of the University system's purchasing card, or P-card. The audit calls for more oversight and education to combat fraud.
In the more than 600,000 P-card transactions in 2007, there were 22 cases of fraud, the audit shows.
The worst case was alleged misuse of more than $300,000 by a Georgia Tech College of Management employee, the report says.
P-cards, which are distributed to more than 8,000 employees of the University system, allow for necessary occupational purchases of fewer than $4,999.
"While the P-card program may appear to represent predominately a financial risk, there are components of reputational risk," the audit states. "An effective and efficient P-Card Program requires sound policies and procedures, management attention, and individual cardholder responsibility."
Governor Sonny Perdue requested the statewide audit, according to a news release issued by the regents. The state's four research institutions, including the University, conducted an independent audit, which they submitted for Stark's report.
The audit includes three cases at the University that were discovered before the statewide audit.
The most severe case involved Jack Russell Bales, former assistant manager of campus transit, who is accused of making $37,000 in fraudulent charges, resulting in Bales' termination. The audit shows he was charged with 12 felony counts of theft.
The report puts responsibility on department heads to manually monitor employees' purchases. More than half of the state's P-cards were inactive in June 2007, the audit says, so institutions should act to cancel cards that are not being used to make purchases.
Ron Stark, the associate vice chancellor for internal audit for the Board of Regents, presented an assessment of the University system's purchasing card, or P-card. The audit calls for more oversight and education to combat fraud.
In the more than 600,000 P-card transactions in 2007, there were 22 cases of fraud, the audit shows.
The worst case was alleged misuse of more than $300,000 by a Georgia Tech College of Management employee, the report says.
P-cards, which are distributed to more than 8,000 employees of the University system, allow for necessary occupational purchases of fewer than $4,999.
"While the P-card program may appear to represent predominately a financial risk, there are components of reputational risk," the audit states. "An effective and efficient P-Card Program requires sound policies and procedures, management attention, and individual cardholder responsibility."
Governor Sonny Perdue requested the statewide audit, according to a news release issued by the regents. The state's four research institutions, including the University, conducted an independent audit, which they submitted for Stark's report.
The audit includes three cases at the University that were discovered before the statewide audit.
The most severe case involved Jack Russell Bales, former assistant manager of campus transit, who is accused of making $37,000 in fraudulent charges, resulting in Bales' termination. The audit shows he was charged with 12 felony counts of theft.
The report puts responsibility on department heads to manually monitor employees' purchases. More than half of the state's P-cards were inactive in June 2007, the audit says, so institutions should act to cancel cards that are not being used to make purchases.
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