Hartford Audit: Credit card monitoring too lax in city
Hartford Courant Editorial
May 07, 2013
Caviar? When it comes to sending the wrong message, Hartford Mayor Pedro Segarra will have to go some to top a lavish New Year's Eve meal at Max Downtown that was partially charged to a city credit card. Mr. Segarra and seven guests, including chief operating officer Saundra Kee Borges, dined on caviar, oysters and rack of lamb, among other succulents, and put the $700-plus food tab on mayoral chief of staff Jared Kupiec's city credit card.
It didn't occur to anyone — in a city where hundreds of people eat in soup kitchens — that caviar should have been a personal expense? That otherwise it might look bad? Or was everyone confident the charge would go unnoticed in the city's loosely monitored review system?
The system is being seriously tightened up, thanks in large measure to an audit by the city's internal audit commission and city auditor Patrick Campbell. The auditors looked at more than 450 purchases made with city-issued credit cards, called procurement cards, or p-cards, in the nine months ending on March 31 and found "policies, procedures and controls need strengthening and better enforcement."
How It Began
The p-card program was started in 2004 to reduce processing costs and make routine small purchases easier and more efficient. It works, properly monitored, and the auditors did not recommend that it be done away with. A bank does the processing, saving the city about $50,000 a year. But the key is the monitoring, which in many instances the auditors found lacking.
At the end of the 2011-12 fiscal year, for example, auditors found $30,391 worth of charges not supported by backup documentation. In another instance, about $450 in sales-related taxes were incorrectly paid to the Hartford Club, even though municipalities are exempt from sales taxes. The finance department was not enforcing a requirement to fill out travel expense reports.
Finally, initial approvers of p-card transactions in various departments were "subordinate to the p-card holder." What could possibly go wrong there? The auditors recommend that the "first-level approver be a supervisor or manager of the p-card holder."
In sum, the city's finance department "was not always exercising control over p-card activity."
It's The Attitude
To close the book on the Dec. 31 feast at Max's, the mayor's spouse picked up the $205 liquor charge that night. Mr. Segarra told auditors that he instructed the waiter to put part of the charge on his personal credit card, but by error it wasn't — but later it was. That left $457 on the city's tab. On Monday, Mr. Kupiec said he would reimburse the city for that amount. He apologized for causing a distraction.
It's good there was a distraction. The caviar isn't the point — it's the cavalier attitude toward the city's money, on display here yet again. This page has complained about the city's seeming inability to collect fines and other monies it is owed, about the lack of urgency in removing a needless third registrar of voters that has cost the city over $1 million, about luxuries like take-home cars that the city can't afford.
There was, in living memory, a culture of Yankee thrift in city hall, of good fiscal oversight and control. That needs to be regained, quickly.
We may be seeing progress. City Council President Shawn Wooden should be credited with seeking the p-card audit. A few accused him of political grandstanding; if he's trying to make the city run more efficiently and economically, we don't care if he did it to get on "Dancing with the Stars."
Also, Mr. Segarra and city finance director Julio Molleda have embraced the recommendations of the audit commission. Mr. Segarra, who tightened use of p-cards in April, announced Monday that he would ban the use of all city-issued credit cards for business-related entertainment. That's a start.
Reprinted with permission of the Hartford Courant.
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