NCSU Modi_es Employee Purchasing Program

An internal audit found some former employees still had access to university credit cards and used those cards to make nearly $170,000 in purchases that were not properly documented.

Dennis Patterson, state audit publications coordinator, said N.C. auditor Ralph Campbell recommended an audit of the credit card purchasing program after last summer's financial fiasco in N.C. State's Public Safety Department in which investigators found more than $800,000 in misspent funds from the department's lapsed salary fund.

The investigation also uncovered that administrators and officers in the department used credit cards for numerous questionable purchases, such as televisions and stereo equipment, totaling $27,800 over a two-year period.

Ericka Kranitz, N.C. State internal audit director, said the purchasing cards are part of a statewide initiative that allows employees to quickly purchase needed business items such as office supplies or hardware.

The cards have spending limits, and items such as travel, hotels and alcohol are blocked from being purchased, she said.

But Kranitz said the Public Safety Department scandal did not "trigger" the internal audit, which was already scheduled to occur before news of the scandal broke. She added that news of the scandal did affect the manner in which the audit was handled.

"We took a closer look at the purchasing card process given what had happened in the Public Safety Department."

N.C. State's internal audit department found five terminated employees and one transferred employee had active purchasing cards and continued transactions after their departure.

The internal audit office contacted each supervisor of the employees and requested the credit card charges be paid and the cards canceled.

A report released by the auditing department revealed that purchases totaling $169,530 lacked proper documentation and that employees were circumventing the credit card's $5,000 daily spending limit by splitting up purchases.

As a result of the internal audit, N.C. State's Purchasing Department has made several changes to keep better track of card use.

It tightened card-use policies, canceled 97 cards linked to inactive accounts or assigned to former employees and hired three additional employees to help monitor the procurement card program, the report said.

"The state auditor's office has recommended that university internal auditors keep a close watch on the use of purchasing cards," Campbell said. "And their recommendations and the Purchasing Department's response has been most appropriate."

The State & National Editor can be reached at stntdesk@unc.edu.