Not all credit cards suspended, reforms under consideration
By Marley Shebala
WINDOW ROCK, March 22, 2012
The Navajo Times has learned from several anonymous sources that some high-ranking tribal officials, including elected leaders, were exempted from the directive to suspend all purchase cards, or "p-cards," for 30 days while new controls are developed to prevent misuse.
The tribe's top finance officer, Controller Mark Grant, confirmed on March 14 that some p-cards used to pay travel expenses are still in use. P-cards designated to pay for operational expenses were suspended, he said.
Cards assigned to the following executive and legislative branch officials were not suspended: Shelly, Vice President Rex Lee Jim, Chief of Staff Sherrick Roanhorse, Naize, Naize's Chief of Staff Sharon Clahchischilliage, all 24 Council delegates, three Division of Transportation officials, five Air Transportation staff, eight Transit staff, two Facility Maintenance staff, four Accounts Payable staff and the president's security detail.
Grant did not identify the 22 exempted staff members by name or job title.
"These cards were not suspended because these programs' functions are critical to continuing operations of the nation," he said.
The p-card program, which is administered by Grant's office, issues two types of credit cards: official travel and department operations.
The cards are funded by revenues generated from natural resource extraction, court fines and fees, taxes and land leases; and money received from federal, state and county grants and contracts.
More than 1,500 p-cards are in circulation, but recent audits of their use in two agencies found "serious waste and abuse," prompting the branch chiefs to freeze the cards so a thorough review can be done.
Meanwhile, moves are underway to strengthen controls over use of the cards and increase the likelihood of recapturing misspent money.
Grant said travel p-cards that are paid from revenue would be suspended when officials are delinquent in filing their expense documents, as required to show that charges on the cards were legitimate. Delinquent reporting is common among p-card holders, according to legislative and executive offices with oversight authority.
"Once the delinquency is cleared the p-cards will be restored," Grant said. "Continued delinquency will result in harsher penalties."
Under the current policy, credit cards are temporarily suspended and then cancelled if the rules are flouted. Cardholders can also be fired.
Proposed amendments to the p-card policy would allow immediate cancellation of a card that was misused and garnishment of the employee's wages to repay unauthorized purchases.
And in cases where an employee is fired or resigns, any repayment still owed for unauthorized p-card purchases would be deducted from money owed to the employee by the tribe.
Grant said the proposed amendments were published on the controller's office website for a week to allow consideration and comment by tribal employees.
"Comments are currently being reviewed, compiled and incorporated into draft policy," Grant said, adding that once proposed changes are approved by the Council's Budget and Finance Committee, they will be drafted into legislation to amend the Navajo Nation Code.
LoRenzo Bates, chairman of the Budget and Finance Committee, said Tuesday that the proposed policy changes would go before the committee after Grant's office finishes reviewing p-card use during the 30-day suspension.
The committee believes the review will result in additional proposals to strengthen accountability requirements, he said.
Bates noted that he has a travel p-card, as do all the delegates, and that it has a monthly limit of $2,500.
The auditors' findings indicate that p-cards, which have been in use by the tribe since 2008, are one of the main routes by which tribal funds are siphoned off into illegal use by unscrupulous officials, and concern over their misuse prompted a recent joint meeting of the Budget and Law and Order committees.
At the meeting, the controller's office and tribal Justice Department joined in presenting proposed amendments that included "continuous monitoring" of p-card to enable quicker identification and correction of wrongful spending.
Acting Auditor General Elizabeth Begay told the committees that two audits completed by her office of p-card use by 400 tribal programs showed "serious waste and abuse" by employees ranging from top management to lower level personnel."
The auditors cited "a lack of controls and enforcement" over p-card users.
The audits focused on the Division of Economic Development and the Navajo Occupational Safety and Health Administration, a part of the Division of General Services.
Among the auditors recommendations were several specifically for Grant's office: "The Office of the Controller should strengthen internal controls over p-cards to prevent abuse; controls such as: Embedding better authorization controls into the p-cards to restrict programs to use only a limited number of vendors and make only the types of purchases that are relative to their legislative purposes;
"Performing spot checks of p-card statements on a routine basis ... to facilitate early detection of potential card abuse; and
"Restrict cardholders from incurring further expenses with p-cards when they become delinquent in submitting the required documents.