During their meeting on Tuesday morning, the Butler County Commissioners and staff held a work session to review their current credit card policy for county employees.

During their meeting on Tuesday morning, the Butler County Commissioners and staff held a work session to review their current credit card policy for county employees.

"What I'd like to do is go over some best practices that the GFOA (Government Finance Officer's Association) had on purchasing card policies," began Assistant County Administrator and Finance Director Ryan Adkison. "We'll also review our current policy and suggest some changes for your consideration."

He went on to explain the county's current policy with the cards.

"Right now, we have our policy and we require our employees to read it and sign it before they're issued a card," he said. "There is ongoing education with both card holder and supervisors right now and that is an area that I'd like to beef up. We can slice and dice spending limits, but as of right now, limits for employees are $1,000 per two-week period throughout the year. If someone needs a higher limit, they need to justify that with a written request from their supervisor."

He also went on to explain the guidelines on the appropriate use of the spending cards.

"We can limit not only the frequency of the purchases and dollar amount of the purchases, but we can also limit the purchasing category," he said.

"I've beefed up our policy to include Internet purchases. They can be risky I think for both a personal card and a county-direct card. We've had fraud on two cards in the time I've been here. Commerce Bank has a lot of tools that they use on the back end of purchasing, but it does get through sometimes."

"There's been about one a year," added County Administrator Will Johnson. "Commerce Bank has always been good about catching it and shutting off the card. We don't ever get charged for anything that isn't ours."

"What happens to the employee when that happens?" asked Commissioner Peggy Palmer.

"This isn't employees doing anything wrong," Will explained. "This is the fact that somebody obtained their number. This can happen at a vendor site with a transaction or over the Internet. I haven't figured out how it happens."

"People smarter than us are very good a that type of thing," added Commission Chair Jeff Masterson.

They also discussed periodic audits of card activity.

"I've tried to beef up the audit section," said Adkison. "Basically, running tests on every purchase we make every year. What I want to give to the commissioners is an annual report of the usage. I'm working with Commerce Bank to get all that data. Basically, what it'll show is transactions, funny time transactions (at odd hours), recurring vendors, if there's any anomalies within a single card. There's a whole list of information that we'll be able to look through."

He also mentioned some changes he'd like to make to the policy.

"They're not major," Adkison said. "I added a training section to allow potential online training with Commerce Bank. They do webinars and they do ‘Train the Trainers.’ I want to see if it’s worth it."

"Would those be what is allowed or is it training to review what is appropriate?" Masterson asked.

"The risk of fraud changes constantly," Adkison said. "I think that would be the big one and how to prevent that."

"It'd be more like: don't scan your card and put it up on the Internet," Masterson said. "Don't take pictures of your card with your cell phone and text it to all your friends. No selfies with the credit cards, please."

"It'd just be another way for us to reduce our risks," Adkison moved back to the updates on the policy itself. "I've updated the payment process to reflect the current practices. I added procedures for purchasing. I also added a section on data mining by updating the user agreement."

He got into a little more detail when going over individual items while accepting questions from the commissioners.

"With card issuance, I did some rewording in the policy so now it reads more like 'We're not issuing you a card unless you do several specific things. We're not going to give you a card unless you read this document. You have to discuss any issues you may have with whoever your department head or the AP clerk and or the finance department. You have to sign it, the department head has to sign and I have to sign it. Then we'll issue you a card.' That's our practice now, it just wasn't reflected in the policy. With training, I want to open up the capacity to either do training or an internal training."

He went on to briefly touch on other parts of the policy including receipts.

"I went ahead and put something in the policy about requesting a receipt when completing telephone orders," Adkson said. "A lot of the time when I buy something off Amazon, I'll get a receipt in my e-mail. If you have an account and can login, you get a receipt. They'll need to print that receipt off for us."

"Do they not all do that now?" asked Palmer. "That seems like it should be part of the policy."

"They have to give some sort of receipt," Adkison said. "I asked Michelle how often we get documentation that says 'I didn't get a receipt, but this is what the purchase was for.' She said about one per every two-week cycle. Out of 80-90 cards, it'll be between three and four purchases."

"We had one once where we went to get gas, and the pump didn't spit one out," added Chief Information Officer Scott Stoskopf. "We went inside and they said they couldn't print one for us. We took a picture of the pump, but that's about all we could do."

"In our policy we also have elsewhere that if that is a habitual occurrence, were going to deal with it," Adkison said. "If we don't have receipts, it's really hard to tell what we're doing. That's why we have it in our policy that it needs to be part of the process. If it’s a habitual issue, they're probably going to get their card taken away. If you can't be responsible with it, we can't entrust you with this freedom."

"Another (example of a) policy that I had read about says that if they can't produce a receipt, then they're responsible for the charge," Palmer said. "You can take it out of their pay. It's an alternative to make sure that they comply."

"If it's $1 or $1,000, they're going to be held responsible if they don't produce a receipt," Will said. "They will be spoken to about it. Honestly, that hasn't been an issue."

Adkison continued to explain the process.

"To save time, we're going to have someone from each department act as an AP clerk," Adkison said. "Right now, we've pushed out the AP system so that the person in each department can enter all of their information for purchases in the system instead of filling out a piece of paper and giving it to us. It's redundant and leaves room for error. That's going to change the dynamics a little bit and I think it'll free us up to spend a little more time auditing instead of data entering it."

He spoke on how supervisory accountability is vital to the auditing process.

"That is probably our biggest resource in the prevention of fraud," Adkison said. "Making sure the supervisors sign off on all activity so they can see how much their departments are spending. They do it with AP, too. They are the lynchmen of controlling the expenditures of their department heads. We make sure of that and we're going to continue to audit that."

Finally, he spoke about some specifically prohibited purchases.

"We also apply all the MCC codes (a code which is assigned to each individual vendor, which also helps to restrict purchases from some vendors) to all cards," Adkison said. "They basically just say 'Hey, don't buy alcohol. There's no gambling with these cards, either.' Those cards cannot be used at those locations."

Adkison then opened the meeting up for questions.

"What percentage of our ongoing operation of expenses are paid by credit card?" asked Commissioner Ed Myers. "In terms of commodity purchases, I'd like to know how the 2015 budget was spent and what amount of money was paid using charge cards as compared to checks."

"I can't answer that for 2015," Adkison said. "I did, about nine moths ago, review the credit cards and I was going to present something similar today, but I couldn't get the data because the database kept crashing. At that time, we spent roughly $1,360,000 with our credit cards in 2008, 2009 we spent $1,240,000 and it was similar in 2010. In 2011, the amount moved to $1,350,000 and 2014 was $1,200,000. I believe last year will be very similar. Credit cards, where they really get the bang for their buck is avoiding having to put it through our AP system.

“With the studies I've read, it would take much more time and money to get everything with those issued in a voucher and having to get it approved as opposed to a quick swipe and a sign off. It's much more efficient. Where you get more bang for your buck is for the smaller dollar things. Compared to or whole $4 million budget, we're looking at one-40th of the total."

"It's my impression that any employee can get a credit card," Palmer said. "Is that correct?"

"Any employee has the potential to get one," Adkison said. "Depending on their types of work."

"The department head has to approve it, too," Will said.

"We issue about 206 credit cards," Palmer went on.

"There are 400 employees," Masterson said. "Roughly 50 percent do possess a purchase card."

"The Sheriff Department has about 30 percent of them," Adkison said. "They have almost 60; Public Works has 22 and Sheriff's Detention has just under 20. Between those three and then the appraiser's office, who typically do a lot of running around buying gas they have just as much as the jail, who has 18."

"The previous sheriff had very few, but the new sheriff changed course and has a lot more out there," added Masterson.

"I think every road deputy gets a card," Adkison said. "They're buying gas for their vehicles."

"I have seen a lot of meals on those voucher lists," Palmer said. "Do you ever notice that?"

"We have some that transport for the jail that go wherever," Masterson said.

"They're out of town," Will added. "We've limited quite a few of those in the past few years."

Palmer was not satisfied with the number of cards available to employees.

"I've noticed the Health Department has nine credit cards," Palmer went on. "Facilities Management has nine. I've been looking at these and doing some studying. One of the biggest risk factors, if we have any risks at all, is the amount that you give out. My question is: is there any way we can reduce the amount per agency? Does everybody need one?"

"I would say the beauty of these: why they're nice is because they're so efficient," Adksion explained. "If you have an employee in Facilities Management who's supposed to be independent and out getting stuff done, it's nice when they can say 'Hey, I'm working on this heater and I need this part.' They go to Sutherlands, swipe their card, get it and get it done rather than having to go back to Michelle Morse (administrative assistant of Facilities Management), order the part and wait two days."

"I don't disagree with that," Palmer said. "I'd just like to see recommendations from each of the department heads on what their recommendations would be to reduce some of the credit cards that are out there."

"It's been our policy to leave it up to the department head to determine the need and the number," Masterson said.

"That's who we hold responsible," added Commissioner Dan Woydiak. "We've had how many abuses of the card since you've been here from employees?"

"We haven't found anybody who's committed fraud internally," Adkison said, "since I've been here."

"In 15 years, I haven't dealt with one," Will said. "I've dealt with people who accidentally used the card and came forward and said 'I grabbed this card when I wasn't paying attention and used it at the gas pump.' We council them, they write us a check and reimburse us for the charge."

Palmer went on to explain while she was employed, departments had specific personnel who held cards so they could do the buying for the departments.

"The Department of Aging has seven cards," Palmer went on. "Do they all need to have those cards? Do they all go out and buy the coffee or the paper or is there someone that is designated to do that?"

"I think there's two different ideas there," Will said. "You're talking about someone who's doing the purchasing and then someone who's doing travel or training. If they're people who would traditionally annually do their training, then they'd have an overnight where they're out of town. We could be issuing petty cash, where we have a lot more risk verses the cards. The majority of the people that have those cards are out in the field. We've had more fraud with cash than we've had with the cards. I can think of two: one in the Department of Aging with bus fares and one in Noxious Weeds when they were selling chemicals. That's been in the last five years and both employees were terminated and prosecuted."

Seeking some clarification, audience member LaDonna Johnson requested the food-purchasing policy. She was told food could be purchased with the credit cards as long as the cardholder was traveling for training or for some other task. The travel amount also had to be greater than 60 miles from their typical workplace in order to apply.

­With that, Woydziak moved to approve the updates to the county's current credit card policy and the motion was carried 5-0.