County credit cards cause problems

Late fees, interest charges amount to more than $3,000

Credit cards for purchasing various items are used without purchase orders for anything under $500.

By BOB HIGH
Staff Writer

First in a series

How would you like to manage a business with 500 employees having access to at least one of 112 credit cards with varying lines of credit, and no one is required to get a purchase order for anything under $500?

County manager Jim Varner operates such a business. he said he doesn’t review credit card statements and accepts blame for all problems.
Until March, county taxpayers paid more than $3,000 in late fees and interest generated on county government cards. The charges were from July 1, 2005 through March 31, 2007 for the Visa cards administered by BB&T.

Since The News Reporter began examining the large number of credit card accounts in March, all late fees and interest charges have been reimbursed to the county by employees responsible for a card, or the fees have been “forgiven” by the bank.

Reimbursement begins

County employees have paid back to the county more than $300 since April in fees and interest, and another $250 has been written off by bank officials.

It is not known why employees were not compelled to reimburse the county for late fees and interest added to the cards during the period of July 1, 2005-March 31, 2007, although the personnel policy adopted last September requires such payments.

County Manager Jim Varner, who took over the government reins in July 2005, said the present system of having such a large number of cards used by employees was in place when he arrived.
“Are you concerned about possible abuse?” Varner was asked.

“Yes. If you have a card and aren’t careful, you’re going to get bit,” the manager said.

Varner said the lack of leadership by department heads and himself was the reason so many late fees and interest charges were paid.

“Some (charges) were repaid, but I wasn’t aware many employees were involved. Some of the charges were marked off by the bank,” Varner declared.

He said a concentrated effort by interim Finance Director Leo Hunt, he and department heads has sharply reduced the number of such fees being charged to the county.

Hunt said since March the county stopped absorbing the penalties for late payments.
“We’ve had some employees who went to the county manager after they told me they weren’t going to pay it. They paid it,” Hunt said.

Reimburse first

“We send a payment request back to the department or individual when a late charge or interest shows on their credit card. We tell the department head or person that the county must be reimbursed before any payment will be made.

“The longer they keep the bills and don’t resubmit them, that means there’s a bigger risk they’ll have another late fee or interest charge added to the card.

“Some of ’em risk an over-the-limit fee because of no payment on the present charges,” Hunt pointed out.

“We write checks at least once a week, and often twice. There’s no reason such a charge should appear,” the finance director stated.

Each credit card bill is mailed to the county offices, and unopened they’re put in the appropriate mail slot to be picked up by the particular department or individual.

Now more prompt

It’s the card user’s responsibility to get the statement back to the finance office – in a timely manner – for payment, with appropriate receipts attached.

“The ones using the cards now are more prompt in sending the paperwork to us. Many times this spring BB&T officials have erased the charges after a phone call from the person involved.
“I don’t call them (the bank). They (the card holder) have to do it,” Hunt said emphatically.

Hunt also pointed out that not all employees who have credit cards in their names or for their departments have caused late fees and/or interest charges to their accounts.

The former finance director’s illness and her eventual firing in the fall of 2005 caused a logjam in the finance office for a time, and many accounts were charged late fees and interest, partially because of these problems.

Some departments report they had their statements back into the finance office in plenty of time to be paid by the due date, but the backlog of work there caused them to be put on the back burner.

Administration card

Examples of cards charged with fees and interest include one in the Administrative Offices. One such cardholder was charged $36 in fees this January. A payment of $64.20 – the sole outstanding balance – was paid, but it was late. The $36 was paid by the county the next month.
The Public Utilities Department was notified in February 2006 that two late payments in the past six months caused the annual percentage rate of interest charged on outstanding balances to be raised.

The same notice showed $61.46 in finance charges was billed to the Public Utilities card in the calendar year 2005. Another $46.53 was charged to the card in that month’s bill in fees and interest.

A card owned by the Administration was billed $38.45 in fees in December 2005. Two meals totaling $9.40 were purchased in the first 11 days of November 2005, but were paid too late.
More charges amounting to $75.83 were added to the Administration card during the November 2006-February 2007 period. All were paid, without reimbursement.

Sheriff’s cards

Five Sheriff’s Office cardholders were charged $137.16 in fees in October 2005, and the amount was paid by the county on Dec. 1. This is an example of the problems caused when the finance director’s post became vacant.
Late fees amounting to $125 for Maintenance Department cards were paid by the county in July 2005.

Six cards issued to the Parks and Recreation Department amassed $24.33 in interest charges alone in August and September 2005.

One Public Utilities card statement in 2005 showed an employee reimbursed the county $34.87 for lost receipts, but the county still paid a finance charge of $6.47 the same month.
More late charges amounted to $93.16 in statements for Public Utilities cards in February 2006. A $25 late fee was charged to a Department of Social Services (DSS) card in January of 2006. A total of $32.97 in fees was charged to a Technical Services card the same month.

Health, Inspections cards

Health Department cards amassed fees and interest of $118.27 in April of last year. The Inspections Department card was charged $40.22 in fees in January of last year. A $25 late fee was charged to the Soil Conservation card – and paid – in March 2006.

The Solid Waste Control card was charged $41.53 in fees in April 2006, and a Public Utilities card was penalized $17.69 in interest alone in July of last year.

Emergency Management cards accumulated $55.89 in fees in last June. A $25 fee for late payment was charged to the finance director’s card in July 2006, the same charge applied to the Animal Control card the same month.

A DSS card was charged $25 as a “over-the-limit” fee in February 2006, and another DSS card got the same charge in September 2006. Even the county library was charged $6.55 in interest fees the county paid last October.

Cards belonging to individuals in the Department of Aging, Public Utilities, Maintenance Department, and Emergency Management were regularly charged with late fees and interest. All were paid by the county, and records of reimbursement were not attached to the bills.

When Hunt became the interim head of finance last summer, his first priority was not late payments and fees. They continued to be billed and paid until this spring when The News Reporter started examining the records.

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