Tight Rein on Credit Card Use Prevents Trouble, Officials Say : Public funds: In the wake of an audit ordered this week by the city of Tustin into reported abuses, spokesmen for county agencies tell how misuse of the cards has been avoided.

By keeping tight controls on the number of people who can use credit cards issued to government agencies, many local governments have prevented misuse, according to a sampling of Orange County municipal officials.

In the wake of an audit ordered this week by Tustin city officials into reported abuses there, officials in other Orange County municipalities say they are hard-pressed to recall even a single questionable purchase by employees authorized to use their charge cards. Consequently, they say, there’s no need to tighten up their policies.

But Orange County government may have hit upon the perfect means to avoid any potential abuse. “It’s easy,” said the county’s chief of accounting operations, Earl Paull. “We don’t have any (credit cards) because they are subject to misuse.”

In his 32 years with county government, Paull has seen perhaps one county-authorized credit card. His recollection is that the card was restricted to gasoline purchases for government vehicles only and that there was wording to that effect on the card.

Paull said he understands that Los Angeles County government may be experimenting with a test program that allows employees to be issued credit cards in their own name and for which they are personally responsible.

“It’s the employee’s credit card and the county reimburses those purchases that are county expenditures,” he said.

But with few exceptions, Orange County government has preferred giving employees cash advances for expenses, such as job-related travel, rather than issuing credit cards, he said.

Tustin city officials recalled all city-approved cards Tuesday and ordered an audit of expense accounts submitted over the past two years after discovering excessive credit card use by top police officers for lunches that were not properly justified on individual expense accounts.

City Manager William A. Huston said Tustin needs to tighten up its policy regarding the use of credit cards, four of which had been issued to high-ranking police department personnel.

In neighboring Santa Ana, Finance Director Rod Coloma said that city has no written policy on credit card use. But lower-level management employees are not given cards, he said.

Only members of the City Council, the city manager, the assistant city manager, the planning director and the police chief have cards in their names in Santa Ana, Coloma said. For example, no one else in the Police Department is authorized to use the chief’s card.

“It’s a known policy that we . . . say credit cards, like any other charges to the city, have to be necessary charges for (the) conduct of (city) business,” he said.

“Everything that is spent is budgeted,” Coloma said. “The advance approval comes with the issuance of the card. That’s why we only have select people who use those cards. The understanding . . . is that it’s to be used only for the necessary expenses of the city.”

Expenses are reviewed after the fact in the cardholder’s department, then by the finance department, which checks invoices and other documentation to justify purchases, he said.

The annual Santa Ana credit card budget is under $10,000 a year but includes council members’ airplane tickets to out-of-town conferences, meals and hotels, Coloma said.

To avoid any hint of impropriety, Coloma said, the city’s planning director uses a city charge card to pay for luncheon meetings with developers. “We don’t like developers to be buying our lunches,” he said.

If an expense cannot be justified, an employee would be required to reimburse the city, Coloma said. But in his six years as finance director, that has never been necessary.

Anaheim’s credit card policy has been unchanged for at least 17 years, Finance Director George P. Ferrone said. No individuals are issued cards, not even the city manager.

There are city credit cards, but they must be signed out with advance approval by department heads, Ferrone said. Moreover, credit-card spending is rare, he said.

“We discourage the use of credit cards,” Ferrone said. “It’s just easier to have people pay for their own expenses and submit an expense reimbursement form.”

The few charges made on city cards, such as a police officer attending an out-of-town conference, are audited to make sure the card has been returned and that all charges were for authorized expenses, he said.

In Ferrone’s memory, the city has never had to tell an employee that he made an inappropriate expenditure.

There is no written policy on credit card use in the city of Orange, but only the mayor, city manager and Finance Director Ted Schoettger have city charge cards, Schoettger said.

“Over the years, I don’t know of any abuses,” Schoettger said. The cards are used when “somebody has to take somebody to lunch . . . someone outside the government generally.”

“Compared to some of the things I read, the city of Orange has none of those problems,” he said. Cards may be used on “a very rare occasion to buy something at a local store on sale. But it’s always on a budgeted item. It’s not used for unusual items.”

Schoettger said there are specific limits on how much may be charged on a city card. Out-of-town, job-related travel, for example, may permit an employee to spend up to $42 a day on meals with no more than $20 for dinner.

“We have--on very rare occasions several years ago--asked (employees to reimburse) the city what we though was the excess amount spent,” he said.