08-29-2016, 09:51 PM
RJ Wrote: "Are you speculating that every time the Mayor made a personal purchase on the pCard it was because the vendor had the ability to alter the blocked (MCC) merchant code number?"
No, I'm just saying that the pCard's point of sale processing software isn't sophisticated enough to stop all purchases forbidden under County regulations. The pCard doesn't have a list of specific authorized vendors or MCC codes; rather it has a list of authorized categories of vendors. A store's individual merchant code is associated with a generic category - but that category might not be specific enough to catch all potential fraud or inappropriate purchases. For example, every year I get an annual statement from my credit card company that summarizes my purchases by category. My Safeway grocery purchases show up under "grocery stores" for example. However, if I buy gas from the Safeway pumps, those purchases don't show up under "gas stations," they still show up under "grocery stores" because the software says "Safeway = grocery store." If the county told the pCard card processor not to allow grocery purchases (a reasonable restriction), the card would be denied when an official tried to buy gas for a travel-related rental car (a legitimate expense) at Safeway. Conversely, if the official popped into the quickie mart at an Exxon station, they could probably buy all the milk, bread and other groceries they wanted on their pCard, because the processor software would think they were buying gas. So if the Mayor bought the inappropriate items from a store whose merchant category was broad enough to be legitimate in some circumstances but not in others, the software would probably allow it. (it would be OK to by an emergency supply of printer ink from WalMart. Other items, not so much... but the software isn't smart enough t know what you bought, just where you bought it). In other words, the third party pCard administrator/card processor is just the first level filter
I have a close friend who is a pCard-carrying county official, and the most by-the-books guy you ever wanted to meet. He says that typical travel-related expenses (air fares, hotels, meals) can be charged on the pCard as long as they are legitimate business expenses, within appropriate limits, and properly documented with receipts. So if the card processor thinks the hostess bar is a restaurant (a category that includes everything from Denny's to Delmonico's) , it probably would approve the charge as a routine matter. it would then be up to the County oversight process to verify that the restaurant expense was legitimate.
The integrity of the pCard system is based on a system of check and balances - the integrity of the user, the County oversight process, and the third party card processor's charge authorization process. In the vast majority of the cases, audits show that users play by the rules. Clearly, in Billy's case there was a flaw in the system -- the Mayor's expenditures were reviewed by a subordinate employee who reports to the Mayor. We don't yet know which (if any) people questioned the Mayor's pCard purchases. And we don't know how the Mayor justified the purchases to the questioners -- hopefully that will come out on the court proceedings. It's all well and good to say that the underling should have risked his/her career and pension to publicly blow the whistle on the Mayor, but that's a tough call when it's your future on the line and the guy you're second-guessing is at the top of the food chain. We do know that someone leaked the pCard info to the press, so the check and balances worked to a degree -- just not as quickly or efficiently as we might have hoped. Perhaps a better system would have the Mayor's expenses (and those of the Council Chair too) be reviewed by another elected official who doesn't report to the mayor or Council (the prosecutor maybe?)
To reiterate, I'm not defending the inappropriate charges - just offering my perspective on how this could have happened without a lot of conscious subterfuge up and down the line.
No, I'm just saying that the pCard's point of sale processing software isn't sophisticated enough to stop all purchases forbidden under County regulations. The pCard doesn't have a list of specific authorized vendors or MCC codes; rather it has a list of authorized categories of vendors. A store's individual merchant code is associated with a generic category - but that category might not be specific enough to catch all potential fraud or inappropriate purchases. For example, every year I get an annual statement from my credit card company that summarizes my purchases by category. My Safeway grocery purchases show up under "grocery stores" for example. However, if I buy gas from the Safeway pumps, those purchases don't show up under "gas stations," they still show up under "grocery stores" because the software says "Safeway = grocery store." If the county told the pCard card processor not to allow grocery purchases (a reasonable restriction), the card would be denied when an official tried to buy gas for a travel-related rental car (a legitimate expense) at Safeway. Conversely, if the official popped into the quickie mart at an Exxon station, they could probably buy all the milk, bread and other groceries they wanted on their pCard, because the processor software would think they were buying gas. So if the Mayor bought the inappropriate items from a store whose merchant category was broad enough to be legitimate in some circumstances but not in others, the software would probably allow it. (it would be OK to by an emergency supply of printer ink from WalMart. Other items, not so much... but the software isn't smart enough t know what you bought, just where you bought it). In other words, the third party pCard administrator/card processor is just the first level filter
I have a close friend who is a pCard-carrying county official, and the most by-the-books guy you ever wanted to meet. He says that typical travel-related expenses (air fares, hotels, meals) can be charged on the pCard as long as they are legitimate business expenses, within appropriate limits, and properly documented with receipts. So if the card processor thinks the hostess bar is a restaurant (a category that includes everything from Denny's to Delmonico's) , it probably would approve the charge as a routine matter. it would then be up to the County oversight process to verify that the restaurant expense was legitimate.
The integrity of the pCard system is based on a system of check and balances - the integrity of the user, the County oversight process, and the third party card processor's charge authorization process. In the vast majority of the cases, audits show that users play by the rules. Clearly, in Billy's case there was a flaw in the system -- the Mayor's expenditures were reviewed by a subordinate employee who reports to the Mayor. We don't yet know which (if any) people questioned the Mayor's pCard purchases. And we don't know how the Mayor justified the purchases to the questioners -- hopefully that will come out on the court proceedings. It's all well and good to say that the underling should have risked his/her career and pension to publicly blow the whistle on the Mayor, but that's a tough call when it's your future on the line and the guy you're second-guessing is at the top of the food chain. We do know that someone leaked the pCard info to the press, so the check and balances worked to a degree -- just not as quickly or efficiently as we might have hoped. Perhaps a better system would have the Mayor's expenses (and those of the Council Chair too) be reviewed by another elected official who doesn't report to the mayor or Council (the prosecutor maybe?)
To reiterate, I'm not defending the inappropriate charges - just offering my perspective on how this could have happened without a lot of conscious subterfuge up and down the line.