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Originally published Monday, December 16, 2013 at 8:52 PM

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Auditor: 3 colleges incorrectly used state-issued credit cards

A state auditor’s report says employees at Washington’s three largest public universities misused state-issued credit cards to buy alcohol, gifts and other items.


Seattle Times higher education reporter

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http://www.sao.wa.gov/auditreports/auditreportfiles/ar1010857.pdf The actual audit... MORE
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Employees at three Washington universities used state-issued credit cards in violation of state policy, charging $226,583 worth of alcohol, gifts and other items to the cards, according to a report by the state Auditor’s Office.

The report from the office of state Auditor Troy Kelley was a review of the way credit cards are used at the three largest public four-year universities in Washington — the University of Washington, Washington State University and Western Washington University.

The audit report found purchases that were not supposed to be charged to state-issued credit cards at all three schools, with the largest amount — $197,265 — at the UW. The UW is also the largest user of state credit cards among the six four-year public schools in Washington.

In a letter responding to the report, UW officials said all the purchases were made for allowable uses, and the only matter in dispute is that they were made with state-issued credit cards.

The UW receives gifts from donors that “can be used to support the University without regard to certain state rules,” according to the letter by Ann Anderson, associate vice president and controller, and Richard Cordova, executive director of internal audit for the university.

For example, the university uses donor funds to buy alcohol for fundraising events, Anderson and Cordova wrote.

According to the report, the three universities used credit cards to purchase more than $164 million in goods and services in the 2012 fiscal year, which ended June 30, 2012. Most of the purchases followed state policy, the Auditor’s Office found.

But those that did not follow policy included purchases of alcohol, gifts, interdepartmental purchases, travel-related expenses and charitable donations.

The report also said the UW used state credit cards to buy more than $15,000 worth of purchases where “supporting documentation did not clearly show how the educational, research or service mission of the University was met.”

Among the examples: The UW charged $6,652 over the year to purchase espresso and a milk-delivery service for graduate students; $2,344 to cater a department holiday party; and $2,031 for membership dues for an employee to join the private Columbia Tower Club.

In addition, the report found that the three universities used credit cards to make purchases that weren’t supported by adequate documentation. For example, the three spent more than $4.5 million for food or beverages in the 2012 fiscal year, but “supporting documents did not adequately describe why the food and beverages were integral to the meetings.”

In its responding letter, the UW disagreed that documentation was inadequate.

“Our process requires approval prior to the purchase by the appropriate UW official with firsthand knowledge as to the ‘integral’ nature of the food or light refreshment for the event,” said the letter by Anderson and Cordova. “We believe this is a strong control mechanism and therefore meets all state requirements.”

The auditor’s report also found there were instances where nondiscretionary funds were used to pay for purchases that were not allowable. For example, the UW used the cards to pay for $63,000 of meals that exceeded the state-allowed amount, decorative items and gifts. University policy stipulates that those types of expenses should be paid for with discretionary funds.

“We disagree with many of the specific situations called out by the report,” the UW letter says.

Katherine Long: 206-464-2219 or klong@seattletimes.com. On Twitter @katherinelong.



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