Credit Card Reform Bill Gains House Approval; Enhanced Controls Will Protect Tax Dollars

Ohio Auditor's picture
Tuesday, December 5, 2017

Columbus – The Ohio House of Representatives today unanimously approved legislation that would require local governments to establish credit card policies to protect tax dollars. House Bill 312 now goes to the Ohio Senate for consideration.

The bill, sponsored by State Reps. Kirk Schuring (Canton) and Dave Greenspan (Westlake), was introduced in July after Auditor of State Dave Yost issued a special report, Credit Card Dangers: Local Governments At Risk Of Theft, which showed more than $1.2 million in public funds have been stolen or misspent at Ohio governments through credit card abuse. 

The report found that some local governments may be putting taxpayer money at risk because they have not instituted basic policies to prevent dishonest employees from abusing government credit cards.

“This legislation requires local governments establish common-sense policies to protect tax dollars,” Auditor Yost said. “Local officials will determine the standards of those policies, but there needs to be mechanisms in place so employees know what is permissible. This is a good-government bill.

The legislation, which was approved by a 90-0 vote in the House, would:

  • Require all government entities to enact a credit card policy detailing allowable uses, number of cards, who can use them, credit limits and reissue periods.
  • Require for some governmental entities, that accounts and policies be reviewed regularly by an appointed compliance officer other than the treasurer of the government entity.
  • Ban the use of debit cards, except for certain law-enforcement purposes.
  • Authorize the Auditor of State to create rules for the disclosure and audit of credit-card rewards accrued by local governments.

“This legislation encourages and promotes additional transparency and oversight for spending Ohioans’ tax dollars, while affirming a responsive and responsible form of governing,” said Rep. Greenspan.

Said Rep. Schuring: “I’m honored to be a part of Auditor Yost’s efforts to put safeguards around the use of credit cards by local governments, and I want to commend him for the time he has taken to develop the framework for this legislation. Without the checks and balances that are incorporated in this bill, there is potential exposure for local governments to negligently use or abuse credit cards in a way that will ultimately cost taxpayer dollars.”  

Auditor Yost’s July report showed more than $1.2 million in public funds have been stolen or misspent at Ohio governments through credit card abuse. The report also found that some local governments may be putting taxpayer money at risk because they have not instituted basic policies to prevent dishonest employees from abusing government credit cards. Almost half of those responding to a survey conducted by the Auditor of State’s office said they do not have a list of allowable credit-card expenses to guide government employees who use the cards, increasing the chances of misspending.

Some local governments also have significant credit limits that create the potential to saddle taxpayers with enormous debt, including 32 local governments with limits of $100,000 or more, with four reporting limits of $1 million or more. Moreover, some entities have failed to segregate credit card duties, allowing one person not only to make credit card purchases, but to also reconcile credit-card accounts, leaving the door open to theft.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

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