New controls in place on Anchorage city credit cards

Posted: Tuesday, September 22, 2009

ANCHORAGE - Anchorage City Manager George Vakalis has told employees to stop using city credit cards to buy flowers for funerals or hospitalizations or to pay for retirement gifts.

In a recent memo, the city manager said the purchases could appear to be inappropriate.

The Anchorage Daily News reports the latest audit found most of the credit card charges were OK but some strayed into gray areas.

For example, the 2008 audit found employees charged nearly $102,000 for food. It's against the rules for employees to use the cards to buy food for themselves. But it's OK to charge for food when the public is involved, such as a volunteer board.

The credit card transactions "are highly visible and can create a perception of inappropriate activities and lack of oversight by management," Vakalis said in the memo.

The audit found that about $4,000 went to purchase "flowers and related items," such as for funerals and hospitalizations.

"Some of that stuff is truly questionable," city auditor Pete Raiskum said. "If one of my staff's wife gets sick and goes to the hospital, should I use a (city credit card) to buy flowers for my staff's wife? Do you think that's an appropriate use of public funds? Is this official business?"

None of the charges are clear violations of city rules, said Lucinda Mahoney, the city's new chief financial officer. She said the Begich administration, which was in power during the 2008 period covered by the audit, had already moved to restrict using the credit cards for flowers, but those restrictions did not go into place until this summer.

Raiskum has audited city-employee credit card use for years. Every year his audit has found that for the most part the charges are OK, but there are problems with questionable purchases or fuzzy rules for using the cards.

Vakalis's memo to city workers said "there shall be no flowers, cards, balloons, decorations, gifts ... for any reason."

He asked department heads to increase oversight.

About 560 city employees have the cards. They charged $11 million on them in 2008, up from $10 million the year before.

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