DOVER — Delaware State Treasurer Chip Flowers called for an overhaul of the state-issued credit card system used by public employees in a 21-page report released Friday regarding misuse by former Deputy State Treasurer Erika J. Benner.
Ms. Benner charged $2,341.58 in non-business-related expenses on a state credit card between Oct. 6, 2011 and Feb. 25, 2013, and resigned her position on Sept. 4, 2013. She later re-paid what was owed, but the treasurer questioned how the system overlooked regular personal charges during a 16-month period.
The treasurer said personnel within his office and the Division of Accounting “were not only aware of the improper charges and reimbursement, but failed to take substantive actions to address the issue, notify me and follow the protections set forth in the law.”
The treasury employee responsible for credit card oversight had too many roles within the agency to ensure proper enforcement of policies, the report said; her duties included credit card administrator, reconciler, fiscal and human resource officer.
Also on Friday, treasurer Flowers said that Ms. Benner is owed a reimbursement of approximately $3,400 that she paid in the immediate disclosure of improper charges, and were later deemed to be legitimate expenses on state business.
A call from Secretary of Finance Tom Cook and Division of Accounting Director Kristopher Knight on April 10 first notified Flowers of irregularities on Ms. Benner’s card, which was identified as fraudulent activity by her husband, officials and reports stated.
During that call, Treasurer Flowers said the other personal charges by Ms. Benner were never mentioned, which included tickets and car service to a New England Patriots game and other expenses later deemed as personal costs.
Treasurer Flowers said he asked the DOA to “cease and desist what appeared to be questionable and illegal conduct by your agency” related to a probe into all credit card use by treasury employees.
In an Aug. 30 email to Treasurer Flowers, Mr. Knight wrote, “Your card data is available to me and my team at any time. The team’s practice has been to review and escalate issues to the Director of Accounting and Secretary as needed. The actions taken (review of cardholder information) are consistent with that practice and are very much warranted to ensure the integrity of the card program.”
Mr. Knight also noted that card information is available online (without names) on the Account’s website.
“Fortunately, I have nothing to hide on my credit card statements, but this practice is very troubling and legally questionable,” Treasurer Flowers replied. “Remember, just because a person is an employee of a state, does not mean their legal rights do not exist.”
In an e-mail to The treasurer said he has filed for a legal opinion from the Delaware Attorney General’s Office regarding whether the DOA has cause to further investigate the credit card use beyond standard procedures.
“The Department of Accounting tried to impugn my character instead of saying ‘We screwed up and will take action to stop mistakes from being made again,’ ’’ Treasurer Flowers said.
“That’s just deplorable. I am not going to allow myself or the treasury to be bullied by the DOA and thus detract from the office’s mission of protecting state assets.”
Mr. Knight issued the following statement Friday:
“The Treasurer’s report highlights the responsibility of the Treasurer’s office to monitor purchases made by its employees. An agency must have internal controls, and I am glad the Treasurer’s office has changed its internal controls to keep this from happening again.”
“With respect to his concerns with the Division of Accounting, I note that just as every printed check in state government issued by the Treasurer’s Office on behalf of a state agency is the responsibility of that agency and not the Treasurer, every card purchase is the responsibility of the agency and not the Division of Accounting. It is the agency that made and approved each purchase, and agencies must have supervision in place to prevent improper purchasing.”
“In this case, when questions were raised to Office of the Treasurer about the Deputy Treasurer’s charges between July 2012 and April 2013, the Treasurer’s Office reconciled each questionable transaction, either by confirming that the transaction was proper or reimbursing the state.”
“Only in recent months has Treasurer Flowers disclosed that there were many more questionable charges made by Deputy Treasurer Benner than his office had previously disclosed. Had the Treasurer’s Office told the Division of Accounting there were more questionable charges, the Division of Accounting would have interceded sooner. That didn’t happen because Treasurer Flowers’ staff repeatedly reconciled the charges we questioned and did not inform us about most of the reimbursements until very recently.”
“We now understand that Treasurer Flowers was unaware of the charges by his Deputy that the Division of Accounting questioned and he wishes he were told sooner. The Division notified the fiscal officer because that is her job and we assume those employees are appropriately supervised.”
The report recommended 12 actions be taken after the issues, including revoking Ms. Benner’s credit card privileges and reducing treasury credit cards from 15 to 4.
Also, treasurer Flowers said he deferred to Secretary Cook relation to possible action against DOA officials who failed to enforce policies of the credit card program.
The treasurer pushed for a requirement that any violation of state credit card policy be documented by the DOA and reported to the agency’s credit card coordinator, employee and agency head.
Better clarification of travel reimbursement rules was sought, along with developing a warning system when employees seek to reimburse the state for non-official business spending.
Also recommended was that the DOA notify an agency’s credit card coordinator if multiple credit cards are issued to a state employee in a specific time.
The treasury has changed its internal credit card authorization process and now requires multiple reviews of statements and transaction by employees and requires the treasurer’s notification on credit card charges and reimbursements made by employees beyond ordinary business.
Finally, Treasurer Flowers pushed to “Increase the level of written communication among the Department of Finance, Division of Accounting and Treasury on financial matters involving a potential violation of state policies and recommend a standing interagency working committee that would be task with handling such violations and coordinating an interagency response.”
Staff writer Craig Anderson can be reached at 741-8296 or firstname.lastname@example.org. Follow @DSNAnderson on Twitter.