Water department employees’ credit card use probed

Friday, April 8, 2005 | 11:12 a.m.

The city of Henderson has placed five employees from its water treatment plant on paid leave while the Police Department investigates alleged misuse of city-issued credit cards.

The city launched an internal investigation March 17 when city officials said "irregularities" over purchases were discovered by the Utility Services Department. City officials are saying little about those irregularities or the monetary amount involved because the case has been turned over to the police department to determine if any criminal charges are warranted.

Mayor Jim Gibson said Thursday he believes the items purchased by employees were "hard goods" and not services so that most of it had been recovered. Because it is a personnel matter and under police investigation, Gibson said he was reluctant to discuss the case at this time.

"If any of this is proven, the circumstances are intolerable," said Gibson, adding that the city is taking steps to better monitor credit card purchases. "We feel confident we will prevent this from happening (again)."

Using a subpoena, Henderson Police investigators obtained several credit card statements from the city, according to Finance Director Steve Hanson. Henderson Police spokesman Keith Paul said police obtained a warrant to search the homes of the five employees and recovered items which he declined to identify.

Other city officials said they don't want to go into the details of the case at the risk of tainting the investigation of the five of 19 employees who work at the water treatment plant on Athens Avenue. The title of the employees involved has not been disclosed.

Kurt Segler, the utility services director, would only say that there is a connection with the employees and that it was not separate cases.

"We have to let the investigation work its way through the system," Segler said.

City Attorney Shauna Hughes said that after hearing concerns from the city's utility and human resources department, she suggested police be brought in to investigate.

"In my opinion it warranted investigation by the police based on what they were telling me," said Hughes who added she does know the details of the case. "That is part of what's being investigated. I don't know the answer. I have not seen the police investigation. I just know it had to do with inappropriate use of purchasing cards. Our practice is that once a matter is turned over to the police department, nobody should be involved."

Henderson City Manager Phil Speight said he doesn't known the details of the case because it is a personnel matter. He said he is the final arbitrator in employee matters and tries to keep his distance until then.

Henderson Councilwoman Amanda Cyphers said the public shouldn't be concerned about the investigation nor that the integrity of the local government is in question.

"There is a human factor in everything, and it can happen in business or anywhere," Cypher said. "People should be proud that when they found something, they acted on it immediately and involved the police department. We are taking this seriously. You can't ask for more from government."

Of Henderson's 1,800 full-time employees, 225 have credit cards, Hanson said. Most have a limit of $1,500 per transaction and $15,000 per month. Another 18 employees, most of them parks and recreation employees, have a limit of $500 per transaction, Hanson said.

The cards are typically used for day-to-day supplies and expenses of departments and could include paper, steno pads, or auto parts, Hanson said.

The cards are also used for reserving plane tickets for those traveling to seminars, for example, and for renting cars and paying for hotels. The city has a $40 per diem for food, he said.

Supervisors of employees who have the cards review the credit card statements and forward the information to the finance department for payment, Hanson said. He said an improper purchase could be missed because the credit card statements the city gets are similar to ones people get at home. They list the vendor, date and purchase amount, he said.

"Right now, if someone bought a hammer at Home Depot, we don't always know the detail behind it. That is why we have to rely on the supervisors to review this stuff."

This marks the first time Henderson has needed such a probe to review employee credit card expenses, and Hanson said his department is already putting additional safeguards in place.

An internal auditor will conduct random audits of credit card statements. The city will also review whether the limit on credit cards needs to be lowered to possibly $500 per transaction, Hanson said. The city is also setting up software to obtain more details on credit card statements.

"If we want to see how much is spent with a single vendor, we can do that," Hanson said.

The city of Las Vegas has about 400 of what it calls procurement cards issued to employees, spokeswoman Diana Paul said. Employees have transaction limits of $500 at the lowest level and $5,000 at the highest level. The monthly limit is $5,000 at the lowest level and $25,000 at the highest level. The department directors oversee the purchases of goods and services, which are limited to certain items, according to the city's policy.

In North Las Vegas, about 20 department heads have credit cards that typically have a limit of $3,000, and can be adjusted upwards. Some 90 employees have purchasing cards that have a limit of $17,500 per month. The purchasing cards can't be used for travel and monetary transactions, among some of the restrictions, officials said. Council members also receive credit cards for trips and return them when they are done, officials aid.