When
An Employee
Is a Crook

As secretary of the West Dakota Department of Administration, you rarely enjoy reading the morning paper. If your agency manages to accomplish something—if it saves a few million dollars, or if it improves citizen service—you’ll never read about it (not even on the bottom of the obituary page). But if your agency makes a small mistake—or even if it just appears to make a small mistake—all you can do is hope for a war to break out somewhere else in the world. As your governor warned you: “Never screw up on a slow news day.”

Unfortunately, there was no war yesterday. Consequently, the front page of today’s paper boldly announced: “State Worker Abuses Credit Card.” And the lead on the story wasn’t much better: “A West Dakota state employee used a government purchasing card to buy supplies for his weekend consulting business, reports state Auditor Susan Pearce. ‘We cannot tolerate a system that permits even a single individual to steal the taxpayers’ money,’ declared Pearce. ‘If the state can’t prevent these abuses, it should recall every single purchasing card.’ ”

You, of course, knew about the audit. You’d seen the full document and watched from the back of the room yesterday as Pearce released it to the press. And you had been praying for a small war. No luck. Now you, or at least your purchasing cards, are the talk of the capital. You can’t hide.

Naturally, the entire episode is more than a little annoying. Two years ago, you did what just about every business and many other states, counties and municipalities have done. You dumped the old, paper-intensive system of speed orders and purchase orders, as well as the state’s warehouse for commonly used supplies. Instead, you issued purchasing cards to many state employees.

These cards look just like credit cards (although they aren’t gold or platinum), and they work like a credit card, too. Rather than fill out a speed order (with multiple carbons in multiple colors), or call procurement for a purchase-order number, or requisition something from the state’s catalog, an employee simply uses the card at a local office-supply warehouse.

Of course, you imposed restrictions—both on the amount of any single purchase and on the types of purchases. You prevented employees from using their purchasing card to buy computers or airplane tickets. And you limited each purchase to $750.

Moreover, the system had worked quite well. State employees were pleased. They faced less hassle when they needed something, and usually they were able to get their items at discount prices. Because agency managers had an incentive to stretch their budgets as far as possible, they wanted to get the best price. But they also wanted convenience and speed. By using the purchasing card at one of the many office-supply stores in the capital area, they could get what they wanted, when they wanted, and at a good price.

More important, the purchasing card really had saved the state money. Keeping track of all those speed-order forms had required an army of clerks, and you needed another corps to issue the purchase-order numbers. But much of the processing of purchasing-card payments is done electronically, and the task of verifying the purchasing-card statement has been delegated to the agencies. As a result, you were able to reallocate employee positions in the procurement division to facilities maintenance, filling some important staffing gaps.

Still, you found it difficult to put a dollar figure on the increased efficiency, improved facilities and overall savings. Your staff, however, estimated it to be well into the millions.

Moreover, YOU had caught the crook, which hadn’t been easy. If he had been using the credit card to eat out every night, the pattern of abuse would have been obvious. But this individual had simply been buying the usual office supplies. He had started small—a package of computer disks here, some binders there. But then he graduated to software and even some hardware. That’s when a few state employees recognized what was happening and turned him in.

The Department of Administration’s own staff investigated the complaint and documented the abuse—about $5,200 worth. You followed the appropriate procedures, checked with all the necessary administrative and political people, and fired the employee. (Naturally, the case is under appeal.)

Then, last November, after a very aggressive campaign, Pearce defeated the incumbent auditor. She proclaimed her determination to ferret out fraud, waste and abuse throughout state government. And the purchasing card was an obvious place to go ferreting.

Anybody who knew anything about the challenges of delegating discretion and who had read the audit carefully would realize that the level of abuse was minuscule. Indeed, Pearce’s crack team of auditors had not uncovered any miscreant other than the one you had already fired. After such a thorough investigation, how could anything be seriously wrong?

By the time you get to your office, the governor’s chief of staff has already called. He has just two questions: What will you do? And how should the governor respond to the inevitable question at tomorrow’s press conference? You call the chief of staff back and tell him that you’ll have answers by 3 o’clock.

For Bob Behn's approach to this month's public management dilemma — or to post your own ideas — click here.

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