Press Release: State Audit of MCPS Confirms Parents' Coalition's concerns

PARENTS' COALITION OF MONTGOMERY COUNTY

Press Release
Contact:
Janis Sartucci
Parents' Coalition of Montgomery County
contact@parentscoalitionmc.com
http://www.parentscoalitionmc.com/
For Immediate ReleaseState Audit of MCPS Confirms Parents' Coalition's concerns:
1,400 MCPS credit cards need oversight
MCPS travel needs to be approved
Montgomery County, Maryland, January 23, 2009 - The Parents' Coalition of Montgomery County is pleased that today the Maryland Office of Legislative Audits has released their Financial Practices Performance Audit Report for Montgomery County Public Schools (MCPS).

In the summer of 2008, a citizen obtained the list of over 1,400 MCPS employees who have been issued American Express purchasing cards (credit cards). Multiple members of the Parents' Coalition filed Maryland Public Information Act (MPIA) requests to determine how these cards were being used by specific MCPS staff. The MPIA request process was difficult and time consuming. However, eventually credit card "logs" and travel expense reports were obtained for 14 MCPS employees. In just that small sample of expenditures, Parents' Coalition members saw that many of the credit card log purchases were not approved until after the MPIA request had been made. In some cases, the date the purchase had been approved was a year after the purchase was made. In addition, that small sample of credit card logs showed numerous expenditures that seemed to be unrelated to the mission of the school system. Those MPIA requests were made available to the public on the Parents' Coalition website. The credit card logs and travel expense reports have been the most popular items viewed on the Parents' Coalition website to date.

http://www.parentscoalitionmc.com/MCPSExpenseReports.html

Today, the Parents' Coalition applauds the Maryland Office of Legislative Audits for their audit of the MCPS use of credit cards and travel expenses. The Audit confirms that MCPS oversight of credit cards has been lax and that MCPS has failed to properly monitor and control credit card expenditures and travel.

http://www.ola.state.md.us/Reports/Schools/MCPS09.pdf
Chapter 3, Pages 19-23Included in the Legislative Audit is the following summary:"However, we found that processes over credit cards need to be strengthened. Specifically, our review disclosed significant weaknesses in internal controls over the procurement card program. These weaknesses included (1) a lack of monitoring over card usage and credit limits, (2) the employee who requested the procurement cards also initially received the cards from the vendor and (3) employees did not always complete card transaction logs, and other logs were not reviewed and approved. We also noted certain potentially questionable credit card purchases. Finally, for certain employees, travel was not approved in advance, as required by MCPS policy.From the report:

*MCPS records indicated that its employees used credit cards to make a total of $5.6 million in purchases (including textbook purchases). According to MCPS records, during fiscal year 2007, 1,209 employees used credit cards with the monthly charges being paid directly by the school system to the credit card bank. (Please note that as of the summer of 2008 there were 1,400 credit cards in use.)*In addition, nine of these cards had single transaction limits exceeding $7,500, MCPS’ threshold for obtaining competitive bids.

*MCPS did not ensure that credit card documentation was maintained that adequately supports all purchases and establishes proper supervisory review of every transaction. Our review of 161 calendar year 2007 transactions totaling $55,000 disclosed that 50 transactions totaling $22,800, applicable to 9 cardholders, were not included on transaction logs for subsequent review.

Of the remaining 111 transactions, there was no documented approval on the logs pertaining to 41 transactions (applicable to 6 cardholders) to indicate a supervisory review and approval of the related charges.

*For example, our review of fiscal year 2007 credit card purchases identified 512 purchases totaling $39,400 from vendors that did not appear to have an obvious relationship with the mission of MCPS.

*For example, we noted 119 purchases totaling $8,290 from department stores and 121 purchases totaling $5,571 from party supply stores.

*For example, one school spent a total of $21,000 on food (using credit cards) without obtaining such approval.

*Approximately 26 individuals (that is, upper management employees and Board members) had been issued credit cards that did not have travel-related restrictions, such as for air fare and hotel accommodations. Use of credit cards for travel expenditures may allow cardholders to incur such expenditures without obtaining advance approval, as required by MCPS regulations. Our tests of 32 calendar year 2007 travel expenditures charged to credit cards totaling $19,028 disclosed 30 expenditures totaling $17,930 that were not recorded on monthly activity logs and, therefore, were never approved. In addition, no documentation could be located to support 10 meal expenditures totaling $2,172 that were recorded on credit card statements. According to MCPS records, during fiscal year 2007, travel expenditures totaled $2.5 million, including $80,465 charged on credit cards.
The Parents' Coalition wishes to thank its members, who through their diligence and persistence brought a small amount of sunshine to the use of public funds by Montgomery County school officials.

The Parents' Coalition of Montgomery County is a citizen network dedicated to improving the responsiveness and performance of the Montgomery County Public Schools. Drawing from education advocacy groups throughout Montgomery County, Maryland, the Parents' Coalition seeks to use the political process to achieve the goals of coherent, content-rich curriculum standards; high expectations combined with timely remediation and acceleration; a wider range of educational options for parents and children; greater transparency and accountability; and meaningful community input.