Tuesday, August 11, 2020
Hawai'i Free Press

Current Articles | Archives

Thursday, June 15, 2017
Audit Catches Maui County Finance Directory Abusing P-Card–Exposes Hostess Bar Loophole
By News Release @ 2:15 AM :: 4674 Views :: Maui County, Ethics

Audit of County Procurements (pCard)

Maui County Auditor's Report 16-01, June, 2017 (excerpts)

…A procurement card or “pCard” is a County‑issued credit card that can be used by County employees to buy the goods and services needed to perform their job. Over the 13-month period which was audited, 369 pCards were used by all levels of County employees to make $4.38 million of purchases.

While using pCards inherently improved efficiency and brought in just under $80,000 of cash rebates to the County, we found that some of the County’s pCard use may have been fraudulent, wasteful, or abusive.

The Office of the County Auditor set out to determine if Maui County’s pCards were exposed to similar issues like those reported by local news agencies which claimed that Hawaii County pCards were used to pay for a tab at a hostess bar in Honolulu, an expensive bicycle, surfboard, and other personal use.

Of the nearly 25,000 separate transactions, we observed no instances of pCards being used at hostess bars. However, testing revealed that some hostess bars are categorized as “restaurants”. This creates a loophole that would allow some pCards to be used at hostess or other types of bars. As such, we recommend that this loophole be addressed by finding alternative ways to pay for authorized meals.

We also observed that some pCard purchases were parceled--or broken up into multiple smaller transactions--to avoid the $500 single purchase limits, obtaining price quotes, or other rules meant to safeguard taxpayer funds. To remedy this, we recommend the County make pCard training a priority, monitor and document instances where parceling continues to occur, and when appropriate discipline employees who do not comply. In addition, we also made recommendations relating to improving transparency by requiring Cardholders to disclose pers

onal businesses or “side job” work performed outside of their employment with the County and controlling pCard credit limits in order to reduce financial exposure to the County.

Subsequent Event - personal use of taxpayer funds by someone entrusted to protect it. Near the completion of our audit, we observed an instance where a County pCard was used to purchase round-trip airline tickets to the mainland for the wife and college-aged child of the Director of Finance.   Although the Director reimbursed the County, using a County pCard to pay for family members’ travel is personal use. Personal use of a County pCard is explicitly prohibited. County taxpayers deserve better.

This personal use begs the question: can the County realistically expect its employees to follow rules meant to safeguard taxpayer money when those rules are being broken by the person making them?

Because of the serious nature of this matter, we brought this to the attention of the Managing Director on May 5, 2017. …

The Director’s travel was presumed to be to attend an Association of Certified Fraud Examiners in Nashville, TN, relating to “bribery and corruption”. However, neither the Director’s wife nor his college-aged daughter are County employees.  (p17)

Active Criminal Investigation  -- During the course of our audit, we observed irregularities in some of the pCard transactions which may indicate fraud, waste, or abuse may have occurred. We have been in contact with law enforcement and have provided them with certain summaries and analyses related to these matters. As such, it is our understanding that the transactions of one employee were under active criminal investigation and the transactions of another employee were being investigated internally by the employing department….

P-Cards Pay for Side Businesses --During the course of the audit, we observed instances where Cardholders appeared to be registrants of--or affiliated with‑‑outside businesses. While the extent of these relationships is not known at this time, the fact that many of the items purchased by pCards are theft sensitive and Cardholders could readily use the items in their personal businesses or on “side job” type work, is cause for concern. …

PDF: Audit Report

---30---

Coverage:

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Ballotpedia Hawaii

Better Hawaii

Blaisdell Memorial Project

Broken Trust

Build More Hawaiian Homes Working Group

ChinaTownWatch.com

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

Coffee Break

DeedySupport.com

DVids Hawaii

E Hana Kakou Kelii Akina

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Hawaiian

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT