A GV Wire investigation reveals that weeks after a State Center Community College District (SCCCD) trustee used his district-issued credit card to pay for his utility bill last year, all trustee credit cards were closed.
Through a Public Records Act request, GV Wire examined expense reports turned in for the past year by the seven SCCCD trustees. The publicly-elected school board oversees policy for the district’s five campuses.
Irregularities popped up: One school board member used his district credit card to pay his utility bill. Another used district funds to purchase a plane ticket for his daughter to join him at a school conference in Hawaii (charged to the district’s travel account). A third charged alcoholic beverages and souvenirs to his account funded by taxpayers.
“The practice created difficulties in accounting for authorized and unauthorized travel expenses, including inadvertent personal expenditures, and seeking reimbursement for unauthorized expenses from trustees,” district spokeswoman Lucy Ruiz said. “It was determined by the administration that the issuance of credit cards was not in keeping with best accounting practices and the cards were withdrawn.”
According to Board Policy 2717: No trustee shall use or permit others to use public resources, except that which is incidental and minimal, for personal purposes or any other purpose not authorized by law.
In all cases, the three trustees reimbursed the district. The cards were canceled June 1, 2017.
Payne’s PG&E Bill
GV Wire previously reported that Trustee Eric Payne is under investigation by the state’s Fair Political Practices Commission for not turning in required campaign finance paperwork.
In an examination of reimbursement documents, State Center employees flagged Payne’s district-issued credit card transaction for his May 2017 bill. In a copy of the statement provided to GV Wire, three charges were hand marked as “personal.” It is unknown who wrote on the bill. The charges are for fuel April 19 at the Chevron in Dos Palos for $40.00; a fuel stop April 21 at Rancho’s in Madera for $30.00; and a May 3 payment for his PG&E bill for $387.35.
The charges were noticed by Dori Barthold-McKay, administrative secretary to the chancellor. On May 16, she e-mailed Payne asking for receipts. Two days later, Barthold-McKay e-mailed Ed Eng, vice chancellor for finance and administration, about a phone conversation she had with Payne. The two gasoline charges (April 19 and April 21) were for a conference in Monterey and should have been reimbursed from a different account and not put on his district card.
“I let him know that he would have to reimburse the district for these charges as well as the charge made to PGE&E/EZ Pay,” Barthold-McKay wrote.
When asked to explain why the PG&E charge was on his personal card, Payne told GV Wire that “the error was corrected immediately. All cards were canceled once it was brought to my attention. I do the best to be fiscally prudent and responsible, but also to protect my valuables and my identity.”
Barthold-McKay’s e-mail to Eng continued with what Payne told her about paying his personal utility bill with his district card: “He stated he asked his roommate to pay the PG&E bill and was not aware that his roommate used his SCCCD Visa card. I told him this looked bad and that he needs to reimburse the district for this as soon as possible. I asked him if he had a checking account and suggested he write a check, payable to SCCCD, at his earliest convenience.”
Payne confirmed to GV Wire that his roommate used his card to pay the bill, but he would not elaborate how his roommate accessed his card.
Trustee Arias’ Travel
Trustee Miguel Arias attended the Governance Leadership Institute conference in Honolulu March 29-April 1, 2017, representing the district. Because it was an official business trip, his travel, meals, accommodations, and registration were covered by taxpayers.
Arias also brought along his young daughter. “I didn’t have daycare for her because travel was during the week. So she came along with me for the trip and I reimbursed the district for the full cost of the trip,” Arias told GV Wire.
E-mails among district staff members indicate that ordering the extra ticket was approved by Randy Vogt, the director of purchasing. Arias said the district books all travel and hotel arrangements.
Even though Arias had received permission to order an extra ticket, another district employee questioned it.
On March 31, Susan Dana of the accounts payable department wrote in an e-mail: “I do not think that the purchase of airfare for one of our trustee’s daughter to fly to Honolulu should be allowed to be charged to our District travel Visa. We have never seen purchases for a spouse or child processed using the District travel procedure and credit card”
On the return flight home, Arias and his daughter were bumped from their flight and received a voucher for their troubles. Arias returned his voucher to the district but kept his daughter’s because he paid for her ticket.
Arias said he never had a district credit card: “I have already 10 credit cards in my wallet. I don’t need to be confused on which card to pull out to pay for gas.”
While travel is part of the job, Arias wanted to limit his time away from the district. He has a self-imposed limit of three out-of-area trips per year. He says that trustees now are limited to $7,000 in travel a year. Anything beyond that would require full board approval.
Trustee Leal’s Purchases
Board President John Leal was flagged for two trips about purchases not conforming to district policies. One was in February to Washington, D.C., and the late March trip to Hawaii.
All told, Leal had to reimburse the district $579.49 for unauthorized purchases on his district card.
During the Washington trip, Leal was flagged for three tips to taxi drivers (only meal tips are allowed) and five meals over the per-diem limit ($10 for breakfast; $15 for lunch, $30 for dinner).
For Leal, it was hard to find a lunch for $15. “It was possible the per-diem was over the allowed amount because of the expense of these hotels. Washington prices (are more) than California,” Leal said.
For his Hawaiian trip, at least 10 purchases (view Leal’s district bank statement) were flagged by district financial personnel. They included $258 to Hawaiian Airlines for personal travel; a $13.60 purchase at Blue Hawaii Gift Net; $35.60 at Harley Davidson and $34.54 at Modern K Fashion.
A number of meals were nixed because of alcoholic beverages, including one sitting at Chart House in Honolulu on March 28, where he tallied $43.98 in spirits.
According to the SCCCD employee handbook (which also covers trustees, at least for travel policy), alcohol is not eligible for reimbursement.
Why did Leal use his district card for personal expenses? He said that accidentally left his personal credit cards at home: “It was a bit of a calculated risk. I knew I was going to get some flak over it, but I did explain the circumstances.”
Leal also explained the charge to Hawaiian Airlines. He was visiting a sick friend on a separate island the day before the convention began.
“I honestly did make that my mistake. I’m certainly being more careful with those issues in the future. In five years, you can look back at Year 1, 2, 3, 4 and I don’t think you are going to find any discrepancies of any nature. I like to above board and transparent. We’re human. I made a mistake, and now I have to deal with it,” Leal said.
Shredding the Cards
Leal said that after the problems with his expenses came up he lobbied District Chancellor Paul Parnell to cancel district-issued cards to trustees. It was getting too easy to make a mistake of putting personal charges on a business card, Leal said.
“Not all the trustees (were) using them in the first place. Now (we) don’t have to run the risk of them being used inappropriately.”
Now, trustees will use their own cards and ask for reimbursement.
Arias agreed that it was a good idea to get rid of trustee cards, even though he didn’t use one himself.
“Credit cards were meant for convenience purposes. What they have become is a liability,” Arias said, referring to the likelihood of identity theft.