The city-issued MasterCard that was in — and often out of — Alfred Dowe’s wallet made it ever so easy for him to bill taxpayers nearly $15,000 for his meals and travel last year.
Every month, his credit card statement went straight to city hall and was paid in full. So Dowe felt no pain from his spending spree until last week, when the discovery that he had misused the card forced him to give up his seat on the Roanoke City Council.
While hundreds of other city employees have credit cards like Dowe’s, officials say there has been no widespread abuse.
“With the exception of this instance, it seems to have been an effective and efficient system for the city,” Mayor Nelson Harris said.
About 700 employees — 40 percent of the city’s work force — are given the city-issued purchase cards, better known as “P cards” by municipal staffers.
City council members, administrators, department heads and rank-and-file workers charged a total of $7 million to the accounts last year, according to Kathryn Fox, the city’s accounting supervisor.
In an average month, about 350 of the cards are used by their holders to travel out of town on city business, buy equipment and office supplies, pay bills and cover various other municipal expenses.
The MasterCards can be used for purchases of up to $2,500, and most have a monthly limit of $15,000.
Roanoke County and Salem have similar programs.
For both governments and businesses, using credit cards for relatively small purchases can be more efficient than the time- and paper-consuming process of filing for reimbursements or purchase orders, said Michael Amyx, executive director of the Virginia Municipal League.
Adequate oversight and documentation are “the litmus test for ensuring that there’s proper expenditure of funds,” Amyx said.
Roanoke’s system, which has been in use since 2001, has several levels of oversight. “I think we have a pretty good program in the city of Roanoke and we have a number of different procedures that we go through each month and to some extent annually,” said Ann Shawver, deputy director of finance.
Department heads are responsible for monitoring their employees’ use of the cards. The Purchasing Department administers the program and conducts monthly audits, with additional oversight from the Finance Department. The municipal auditor also routinely audits the program.
Everyone who uses a P card is required to go through training. Receipts must be turned in for every purchase, and meal and travel expenditures also require an expense form.
A June 2006 report from the municipal auditor found that purchases on the cards were reasonable and “card holders and departments in general have improved their compliance with policies and procedures when compared with the results of prior years’ audits.”
So how did Dowe slip through the system?
Credit card use by members of the city council is monitored by the clerk of council. But unlike the other department heads charged with supervising their employees’ use of the cards, City Clerk Stephanie Moon is appointed by the very council members she’s charged with policing.
Moon said last week that she often raised questions about specific expenditures by Dowe, as well as alerting him to the fact that his monthly totals were often three or four times higher than those of his colleagues. The clerk also notified Harris about her concerns.
But when Dowe insisted that his expenses were for legitimate city business — which he continued to do until revelations that he was double billing the city and the state forced him to resign Saturday — there was little more Moon could do.
Harris, who last week called for a review of the policies that govern council’s spending on meals and travel, said one possible solution to Moon’s predicament would be to add an additional level of oversight, perhaps by the mayor.
The review of policies will take about 45 days, and the council will likely be briefed on the matter at the same time it receives a report from the municipal auditor on its spending for meals and travel.
Both reviews were requested by Harris after news broke that Dowe spent $14,604.03 on meals, lodging and travel expenses in 2007. That was nearly half of what all seven council members spent on meals and travel.
While Dowe’s expenses raised a red flag, it appeared that he would weather a political storm, at least until the audit was completed.
But over the weekend, the councilman was forced to resign after the disclosure that he billed both the city and the state for his travel to board meetings of the Virginia Department of Criminal Justice Services.
A board member of DCJS, Dowe submitted to the state claims for reimbursement for his mileage and hotel stays in Richmond while attending the meetings — even though he had already billed a rental car and the same hotel bill to his city MasterCard.
“I tendered my resignation out of my singular intent to support – not distract from — the progress of the city of Roanoke,” Dowe said in a written statement he released late Saturday.
Although several council members have agreed that there needs to be better guidance for their spending on travel, no one has questioned the broader use of city-issued credit cards.
With rebates from the bank, the program actually produces revenue for the city. Fifth Third Bank of Cincinnati pays a 1 percent rebate for annual spending from $1 million to $5 million on the cards, and 1.25 percent for more than $6 million.
In the most recent fiscal year, that meant a rebate of $90,456 on the cards.
“We use it as much as we can,” Fox said. “It’s kind of like using your own credit card when you can get frequent flier miles.”
While Roanoke County and Salem both use credit cards, neither gives them to every member of its governing body. The mayor of Salem gets a card, according to city spokeswoman Melinda Payne, but total spending by the city council for meals and travel last year was about $5,000 less than what Dowe spent alone.
Amyx, of the Virginia Municipal League, did not have a breakdown of the practice in other cities around the state. Calls to Richmond, Norfolk, Virginia Beach and Alexandria showed those localities do not give council members credit cards. The cards are optional in Newport News, with four of seven council members using them.
Some city clerks said that giving credit cards to council members would raise too many issues with paperwork and oversight.
“I can’t afford to give them a credit card,” said Shelia Wilder, chief deputy clerk of council for Norfolk. “I would go crazy.”
Michael Thompson of the Thomas Jefferson Institute for Public Policy, a nonpartisan group that focuses on improving state and local government in Virginia, said cities that issue credit cards to their elected leaders should have a transparent system that can be monitored by the public.
Otherwise, he said, “the idea of a city credit card gives the image of letting these guys go out every day and have lunch on the city.”
Staff writer David Harrison contributed to this report.