NBC Montana investigates city policies for credit card use


MISSOULA, Mont. - We're continuing our NBC Montana investigation into the way Montana cities spend your money on credit cards.

In the past four months we pored over thousands of credit card transactions from Billings, Bozeman, Kalispell and Missoula. we found this bottom line -- Kalispell, the smallest city, spends by far the least on food and travel. Billings spends the most on travel, but it also has about twice as many employees as Missoula and Bozeman. When you compare those two cities head to head, you'll find Bozeman spends more on travel and Missoula more on food.

That led us to ask how the cities oversee and approve who spends what.

We've dug through credit card statements line by line and totaled tens of thousands of dollars.

In Missoula our investigation into four months of statements showed some of the 46 city employees authorized to use a city credit card are spending an average of $1,000 a month on food -- meals, ice, water and tips.

Just like us, people we talked to want to know who's spending what.

Andrew Richards from Missoula told us, "I don't get a food stipend. I don't get a travel stipend. Why should they?"

We asked to talk to the mayor about the appropriate use of a credit card. City administrative rules show he's signed off on rules for employee spending while traveling. There is also an ordinance that allows him to develop and approve all administrative rules. The mayor declined to speak with us.

So we emailed each of the 12 city council members. Every month they sign off on about $30,000 in credit card bills. The vote is usually unanimous. Some didn't respond. Others said they would, but didn't. Some played phone tag.

Only Marilyn Marler, the council president, agreed to talk to us. In her email she admitted she'd have to review the city's policies and didn't know which employees had credit cards. We found out there were 46 with a combined total open credit limit of $236,000.

"We don't make a habit of questioning each credit card purchase," Marler said. "I'm pretty confident in the way it's working. I don't have any reason to think there is a problem with it."

We asked Marler about some bills chosen at random. On the list -- $85 at Bridge Pizza for a lunch meeting, $71 at Einstein Bros. Bagels and $210 at the Mustard Seed.

"If we are requiring people to spend their lunchtime, if it's a required activity when you would be eating, I think it's appropriate to provide lunch," said Marler.

But not all taxpayers we talked with agree.

One Missoula man told us, "I don't believe in that. No. If it's not a client and you are not going to make money off that client, don't do it."

The four months of statements we reviewed show the city will likely spend $12,000 a year in food.

So what does city policy say about it? The mayor's office told us to ask the director of Missoula's central services. We showed Steve Johnson a stack of documents, statements and receipts and asked him about the policy for food purchases.

"Those require review, even food," Johnson said. "Generally speaking food is not an authorized purchase unless there is approval either by the department head or the chief financial officer."

That's exactly what we found in city Administrative Rule 32. It states employees must have their supervisor or the director sign off on their statements, each purchase needs a receipt, meals are not allowed unless advance travel funds have not been provided and all purchases need a system purchase order.

Johnson gave us this blank purchase order. Policy says it needs a detailed description of the item, its cost and the accounting code used to book it. But when we emailed the city asking for "signed and approved purchase orders/documents per the city's administrative code" for 26 separate transactions we selected at random, we did not receive a single purchase order in our request.

No purchase orders for a $179 pair of waterproof Keen shoes, $52 Carhartt pants or a $25 graphic T-shirt. All of it is charged on assistant director of development services Don Verrue's credit card.

We're told it's all allowed under collective bargaining.

Click here to view the clothing allowance for Missoula city employees.

It says employees will submit clothing allowance bills to the city to be reimbursed for approved purchases.

We pressed Johnson on why those clothing purchases were allowed.

"In some places where we just have a clothing allowance, I don't know that we have the controls in place to determine what people buy with what. But I think that would typically be questioned by the finance officer for an internal review of those kinds of purchases or it would be looked at by the internal auditors," Johnson said.

So how does Missoula's credit card policy compare to other cities'?

In Kalispell the city manager decides who can use one of the 10 cards. Six are checked out from the treasurer's office. A charge form is used to detail what was purchased, why and how much it costs.

Then there's Bozeman's policy, which was last updated in 2013. City Manager Chris Kukulski told us, "We update it about every three to five years to make sure we are ahead of the curve of what's going on, make sure we have good checks and balances, make sure everybody is up to speed on what the policies are."

Bozeman allows food purchases if workers are doing city business. Although if they buy it and it's not for travel, employees have to send in a taxable fringe benefit form. Purchase of any goods and the city policy requires two signatures to approve it

In Billings the 172-page policy manual does not specifically mention pre-approved credit card use. But what's there outlines when meals and trips can be purchased. Any out of town trip needs department head approval, every item bought needs a purchase order. We called the city administrator. She told us most of the city's 200-plus card holders are restricted by the credit card company from buying food. Any exceptions, she said, run through her.

Going back to Missoula's approval process. It is outlined in Administrative Rule 32, the credit card policy for Missoula. Here's item four: "All purchases will still need to have a system purchase order to accompany the expenditure, as well as the appropriate documentation."

Although we asked for approved purchase orders for 26 different transactions we received none. We found food purchases are supposed to be the exception, according to Johnson, but Missoula spends an average of $1,000 a month on food.

We found the Missoula City Council, the people who ultimately approve over $300,000 in credit card purchases a year for the city, are unfamiliar with credit card purchase policies.

In the interest of fairness, Steve Johnson, the only city employee allowed to talk to us, writes in an email that city finance workers are "unaware of any adverse audit findings with regard to the credit card or clothing purchases" we inquired about.

We're going to keep checking these credit card bills every month, and we will keep you updated on what we find. It may become more difficult to figure out where the money is being spent.

Click here to view what the statements we initially reviewed look like.

In the statements we reviewed during our investigation you can see who used the card and how much money they spent.

Click here to view Missoula's most recent credit card statement.

On the city's newest statements, if you want to know where they spent your money you'll need credit card accounting codes , but that still won't tell you where they bought something or what they bought, just what account it is logged under.

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