When elected officials and state and county employees use government-issued purchasing cards, commonly known as pCards, they are spending the taxpayers’ money. They pledge to spend that money wisely, only on fair-priced goods and services required for their government work — not for personal expenses.
On top of the user agreements and pCard training sessions, state and county policies outline checks and balances that are supposed to prevent wrongful expenditures. Those rules only serve the taxpayers when they are enforced.
Hawaii County Mayor Billy Kenoi is proof of that. He is under investigation for potential criminal and ethics violations after acknowledging that he used his pCard for personal expenses for years.
It was through the diligence of a Hawaii island newspaper reporter, who finally obtained a pCard statement showing that Kenoi spent nearly $900 at a Honolulu hostess bar in December 2013, that the mayor’s larger pattern of spending taxpayer funds for his own amusement was exposed.
Although the investigatory spotlight rightly remains on Kenoi and Hawaii County, the unfolding saga highlights a lack of transparency and accountability throughout the pCard program that must be corrected.
It should not have been so difficult for that reporter to obtain Kenoi’s pCard statement in the first place. These public records detail the spending of taxpayers’ money by government officials. They should be routinely released. Doing so would serve as a powerful deterrent against improper spending.
The state procurement office established the pCard program in 2001 with the goal of making government operations more efficient and cost-effective. The idea was to streamline the billing process by authorizing select employees to make direct purchases with the pCards, rather than having to fill out a more cumbersome purchase order first. Compliance officers in each department or agency were tasked with oversight.
Because of this decentralized environment, varying methods and processes have evolved throughout the state. For example, Hawaii County policy lays out strict rules for cardholders, but they obviously were not enforced in Kenoi’s case. And the county had apparently never fully audited the program during Kenoi’s tenure. Such a review began in November by the Hawaii County legislative auditor and a report is expected in June.
Uniform compliance procedures are needed, along with the uniform enforcement of those policies, to protect the public interest. The state procurement office must receive the resources it needs to help follow through with the random audits of individual cardholders and other enforcement measures promised in the tough state and county policies.
Moreover, a comprehensive, statewide audit of the entire program is needed. The last one, in 2010, focused on only three executive branch agencies, when the pCards were in use in 33 government entities. Although the audit found that internal controls were "generally adequate" to "prevent and detect fraudulent, improper and abusive purchase card activity," the report emphasized that procurement officers failed to utilize all the electronic compliance tools at hand. Notably, few accessed monitoring reports that could flag improper spending.
At the time of the audit, there were about 3,900 authorized users in Hawaii government jobs, who spent a total of more than $104 million a year on their pCards. Today the number of authorized users has grown to more than 5,340. That number does not include Hawaii County Mayor Billy Kenoi. His pCard was belatedly revoked on Tuesday. Hawaii County’s experience serves as a lesson to tighten up the pCard program statewide.