School districts need to keep better tabs on credit card spending, AG says

School districts are not consistently monitoring the nearly $20 million per year spent using credit cards, according to Auditor General Kim MacPherson.

A volume of MacPherson's 2017 examined the use of credit cards for smaller purchases by three districts: Francophone Northeast, Anglophone West and Francophone South.

She found "many cases" of non-compliance with policies on how the credit cards should be used, and a lack of clear documented guidelines for the use and administration of the credit cards.

Districts also made "significant" purchases online, exposing cardholders to identity theft and undisclosed fees.

The province began rolling out credit cards, or "purchase cards," to departments, school districts and community colleges in 2003 as an alternative way to pay for frequent, low-value transactions.

The cards are only supposed to be used for purchases of up to $1,500.

District had over 750 cards

The auditor general chose the three school districts for audit because of their numbers of cardholders, purchases, and status of prior audit recommendations, among other factors.

Francophone South had 755 active cards as of February 2017, the most cards of any provincial government department.

By contrast, Anglophone West School District had 394 active cards, Francophone North East School District had 245 active cards, the department of transportation and infrastructure had 199 active cards, and the department of justice and public safety had 159 active cards.

Anglophone South had used purchase cards to make $4.6 million worth of purchases during the 2016/2017 fiscal year, the most out of any district

Of the school districts that were audited, Anglophone West had made $4.5 million worth of purchases using the cards during the 2016/2017 fiscal year, Francophone South had used the cards to make $3.3 million worth of purchases, and Francophone North East School District had made $2.5 million worth of purchases.

Lack of documentation

In examining individual transactions, the review found 10 cases in the three school districts, totalling over $1,300, where the lack of documentation prevented the auditor general from determining if the purchase was legitimate.

The items purchases included fruit arrangements, iced coffee purchased in Ottawa, and $500 in chocolate.

The review also found purchases that appeared "unusual", such as the purchase of a laptop bag at a high end athletic apparel store during a business trip and Netflix membership charges for a school during summer months.

Among her recommendations, MacPherson said the districts should regularly monitor card transactions to identify violations, and implement enforcement procedures for those who break the rules.

In progress at district

Kelly Cormier, a spokesperson for the Department of Education and Early Childhood Development, said many of the auditor general's recommendations have already been implemented or, are in progress.

She said the department and school districts will work together towards full implementation of the recommendations.

She also said that the department will establish a process to monitor the cards on a "go-forward" basis.

In an email, Monique Boudreau, the superintendent for Francophone South School District, said the district is working to improve its guidelines around the cards and make them clearer.

As for the number of cards in circulation, Boudreau said the cards allow principals to invest more time in supporting teachers and continuous improvement, rather than having to manage all purchases at their school.

Spending the same amount

She pointed out that it does not change the amount spent in the end.

Catherine Blaney, acting superintendent for Anglophone West School District, said the district takes all the concerns raised by the auditor general very seriously, and will take steps to implement her recommendations.

"We intend to make progress toward total compliance and improvements on purchase card procedures within Anglophone West School District, correct any past deficiencies and prevent any others from this point forward," she said.

Eloi Doucet, director of administrative and financial services for the Francophone Northeast School District, said Friday that the district has read the auditor general's recommendations and agrees with them. Several have already been put in place, and the district is currently acting on the rest, she said.