May 27, 2010
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News: Why Destroy The Credit Cards?
It has become a growing trend that many city and state government agencies have enforced stricter credit card rules and some have removed them totally from the hand of employees. The Town of Montgomery, West Virginia has chosen to destroy and terminate all city credit cards. The decision was made after a Montgomery resident, Wanda Carney, asked for an official investigation into Mayor James Higgins' city issued credit card usage before turning the information over to the local Daily Mail. Higgins, one of two city employees that had been issued a city card admitted using the city's card for personal expenses. In fact, Higgins told the Daily Mail that he used as though it was his own personal card and never used for business reasons.
According to the Daily Mail, Higgins Visa credit card limit was $1,700 which he had exceeded on several occasions. During a one week period alone, Higgins took over $1,500 in cash advances. Higgins explained the cash advances as simply personal expenditures. His over-the-limit transactions generated hundreds of dollars in penalties and interest fees. According to Higgins, all of the card transactions were paid for out of his own funds. Results of an internal audit conducted by the city finance committee indicated that Higgins' claims were true that taxpayers' money was never used to pay the balances on the city's credit card.
Because Higgins paid all the bills online and requested paperless statements, there were no documents supporting any of the expenditures; however, statements do indicate that he made payments each month between $43 to $200. The bank by which the card payments were made was not available either. At the time the card was destroyed, there was a balance of nearly $1,700 on the account which has since been paid in full. Unfortunately, the city did not have any policies in place regulating the use of city credit cards. After making the decision to destroy the two city cards, city officials agreed to issue purchase cards (Pcards). Pcards are typically designed to accommodate a single-purchase dollar limit or a monthly limit and are easier to keep track of. Nevertheless, Carney filed a complaint against Higgins with the state Ethics Commission and Fayette County Prosecuting Attorney Carl Harris. Harris said he doesn't believe that Higgins violated any law. The final decision will be made by the Ethics Commission.