Inspector general faults credit card policies
The board that manages the city’s pension fund for firefighters — long criticized for a string of bad investments in recent years and the big salary its former top administrator was paid — also had slack policies concerning credit cards that board members could use and often failed to fully enforce even those policies, according to a new inspector general’s report.
The report covers credit card expenses and reimbursements from the beginning of 2010 through the end of 2012. It notes that the board updated its policies in August 2013.
In a written response signed by Secretary Treasurer Thomas Meagher III, the board’s trustees agreed with most of the report’s findings and said their new policies for the most part reflect the recommendations of Inspector General Ed Quatrevaux.
Until at least last year, the report says, the New Orleans Firefighters’ Pension and Relief Fund had “rules and guidelines for reimbursement of reasonable trustee expenses” that lacked any clear definition of an allowable expense, didn’t require itemized receipts or a written explanation of expenses, and didn’t set a time frame for when reimbursement requests had to be filed.
Even going by the limited guidelines in place, the report found that almost a third of the credit card transactions that were tested fell outside of “allowable” expenses, totaling about $12,709. The board also accepted receipts for credit card transactions that contained only the total amount spent, without any itemization of what was purchased. Nor did it enforce a rule requiring a written explanation of any expense of more than $25 that was not accompanied by a receipt.
The board also skirted its own rules, the report found, by not reviewing credit card transactions or supporting documents for reimbursement before paying out money. Unauthorized expenses were not reimbursed by cardholders “in a timely manner.”
Finally, the report concluded that too many people — 13 in all — had access to the board’s credit cards. Nine of the 10 board members had them along with an administrative assistant and two members of the Board of City Trusts, an “unrelated entity” that manages the city’s investments and revenue-generating property.
The firefighters’ pension board has been substantially reorganized since the years covered in Quatrevaux’s report. Mayor Mitch Landrieu convinced the state Legislature to cut the number of trustees from 10 to seven, and in September, current and retired firefighters voted to replace all four of the members they elect to the board.
The only recommendation from Quatrevaux that the new trustees wouldn’t accept was the idea of requiring the board to review and approve all credit card statements and reimbursements before they are paid out.
Instead, the board’s new policy requires that they be “reviewed by key staff of the fund for appropriateness” prior to payment and then reviewed by the board’s expense committee on a quarterly basis.