Credit card ‘culture’ in the States
Tuesday 27th January 2009, 3:00PM GMT.
MORE than one in five public-sector employees has a States credit card, the Treasury admitted today after revealing that it was conducting a major review of spending by those on the government payroll.
An investigation by the JEP has uncovered the startling number of purchase cards currently held by States employees. According to Treasury figures, a total of 1,500 cards were in the possession of the 6,660 people on the States payroll at the end of 2008.
The two biggest-spending departments, Health and Education, account for two-thirds of the cards, which are used to buy everything from airline tickets to stationery. At Health about 600 purchase cards, which are also known as P cards, are shared between the 2,563 on the payroll, and at Education 1,900 employees have 400 cards between them.
As a result of the sheer number of cards and the freedom of the holders to use them where they like, the taxpayer could be paying far more for goods than is necessary, the Treasury said. They said that the States were not benefiting from discounts that would be otherwise available by buying a whole range of goods and services from a single supplier. There are also concerns that teachers and others do not have the time or the incentive to shop around for the best deal.
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We are finally getting to the root of the problem, the states have been overspending for many many years whilst the rest of us law abiding and decent people have been frugal.
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To be fair most people in business that have a requirement to make purchases in their job have a purchase card. They will need to reconcile statements and have a line manager sign off the monthly statement, it will also be independantly audited.
It is not always possible to have group purchasing carried out from a single source, especially if the goods required are from a vary varied range.
The poiont I’m making is that this does not necessarily mean that money is being squandered, assuming of course that the control measures mentioned above are in place as they are in financial institutions.
Don’t get me wrong the states don’t get everything right but they don’t get everything wrong either.
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This is absolute rubbish. As a holder of a Health Purchase Card, I am subject to incredibly tight procedures for spending on it. For a start, the limit on each card is generally £500 – not exactly enough to go on a spending spree. Then you are, actually, limited as to which suppliers from whom you can make purchases. For instance, all stationery comes from one local provider with whom incredible discounts have been negotiated (generally about 90% off their published prices). Paper is from a completely different supplier due to them being able to offer better prices. The above report may make great reading but, sadly for the conspiracy theorists, it is not based on truth.
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How do you know some of these people aren’t using these for their own personal use?
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glad to hear this.
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Fantastic! Overpaid civil servants running amok with our money.
Gets better doesn’t it?
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So much for the “cutting expenditure to the bone” rubbish we hear on talkback. About 15 months ago the states employed a lady on a six figure sum to ensure “value for money” procurement throughout the states departments.Looks like she’s been really busy!!!
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Adrian – read above, because they must reconcile statements and have line manager sign off, also independant auditing ensures that even if the individual card holder and their line manager are abusing the system, they can still be caught.
NG is right, this is sensationionalist reporting, what bothers me most about it is that rather than being critical of the states as an entity it criticises those individuals within it who hold purchase cards.
The implied message is that they are both dishonest and incompetant. In my experience of dealing with states empolyees they are as professional and courteous as anyone else and they would be the first to tell you they are sometimes hampered by difficult processes and proceedures.
This headline is playing to the predjucices of those who do not work in the modern business environment and who criticise before questioning the rationale of the process.
Hey if there was a queue for having a go at the states I’d be in there with you but please, those operating within the system are ordinary people – knock the system, not those administering it.
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This island gets worse, why do they have credit cards and what are the limits and what are the expenses for? ….Are these audited in a professional manner or is this all hidden under the carpet adding more corruption to the island?…This makes me sick to the stomach……
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I agree with both NG and Keith. I have knowledge of the original project to establish central purchasing within the States, providing enormous savings of circa £1M per annum at that time. It was by no means easy to implement as local suppliers often did not provide the best value for money and there was significant political unease – i.e. protectionism. Also having knowledge of the controls on individuals expenditure I would be very surprised if anyone within the States Administration was abusing a system which is well controlled and also extremely common throughout the commercial world. Paying an account with a debit card is little different from paying with a cheque. Maybe the scaremongers – including the media – should ask their bosses how they pay the bills these days?
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Mo
dont bother getting sick, try getting the facts, it might save you the effort. Get the answers to your questions first before you decide whether or not there is a need to vomit
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I used to work for the States and I can assure you every penny had to be accounted for with receipts, explanations and scrutiny of every item purchased.
The JEP made it sound like we are given unlimited resources to do with what we please, so before people start jumping to conclusions and imaging civils servants blowing all your hard earned taxes on shopping and holidays, please think again!
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Interesting comment from the article stating the States were not prepared to say how much was being spent on all of these cards.
Why ?
If all of these so called stringent line manager checks etc are in place, why not just tell us what’s being spent collectively.
Any decent business should also be able to break these costs down to a department level too, so let’s have some transparency,
I’m sure there are plenty of cicil servants with the spare time to do this.
The reluctance to publicise these costs merely adds to the suspiscion of abuse of these cards, and is just typical of the people at the top ignoring the will of the people.
Most UK Councils have to publish costs / spends etc.
Why can’t ours ? unless there’s something to hide.
The whole comment that the states are not prepared to say totally enrages me – It’s OUR money and we should therefore be entitled to see where its spent.
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Mo said:”This island gets worse, why do they have credit cards and what are the limits and what are the expenses for? ….Are these audited in a professional manner or is this all hidden under the carpet adding more corruption to the island?…This makes me sick to the stomach……”
Generally, credit cards are held purely for the purposes of ordering stationery. Occasionally they would also be used for travel off island – but this is rare.
The limit on my card is £500 – and I am a manager responsible for a department of around 40 staff. NB: When I was a manager in the finance sector, my corporate charge card had no limit.
All charges to the card are detailed on a monthly statement. Receipts must be attached and the statement approved by a line manager. It is then forwarded to the Finance Department for further approval. All expenses are then subject to scrutiny from Treasury and outside audit. Of course, before this even takes place, each department has a very limited annual budget set.
As stated previously, stationery etc can only be purchased from approved suppliers with whom a significantly discounted contract has been negotiated. Even then, only approved items can be purchased. By way of example, I have just received a statement for my most recent delivery which includes a box of 250 very large envelopes needed for transporting large documents – RRP £121.19, discount 94.81%, price paid £6.29. Another is 6x rolls of sticking tape – RRP £13.98, discount 95.28%, price paid £3.30. How exacly is this “making the island worse”?
Any deviation from standard, approved items must be justified through a lengthy process.
What makes me feel sick to the stomach is the level of people’s gullibility in believing sensationalised JEP reports such as this!
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Holy cow NG ….. 90 per cent discount!
Fully applaud whoever negotiated that deal …. He/she can take my wife shopping any day.
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Well done NG – you are a decent citizen, frugal and honest but there are many who are not!
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Any thinking person who understands Purchase Cards will understand this is powerful tool if applied correctly. What many fail to realize the cost of a purchase includes the bureaucratic overhead of making the purchase.
A classic example, it is rumoured, are the forms which exempt Education Sport and Culture of GST. Great idea, but form filling is too daunting; the result ‘Too difficult, I won’t bother’.
The problem is not with the Purchase Card, but the Dinosaur Rear Guard within the civil service. Don’t cut the card, cut the pen pushers who can’t move with the times; read Michael Hammer.
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To NG from MR
Sensationalised JEP reports that you are reading and commenting on in working hours
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JR
“Any decent business should also be able to break these costs down to a department level too, so let’s have some transparency”
Small businesses may be, but I’ve had experience that most large businesses accounting systems are antiquated and awful and I bet most wouldn’t even be able to break down their expenditure by type.
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Take from PAC States watchdog, says it all
Overall these amendments reinforce the view of the PAC that the present budgeting process is less than adequate, there is no realistic forward planning and the concept of three year rolling forecasts is not strictly applied.
There is little evidence that the required measures to improve financial management and financial controls are being seriously pursued. Evidence received during the Public
Accounts Committee’s recent hearings on the 2007 States Accounts indicates that no rigour is applied to the budgeting process; income forecasting is seriously under estimated in order to ensure that there are sufficient surpluses to cover budget deficiencies; and departments do not know or are unwilling to disclose the full costs of services.
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So if everyone with a card spent upto their limit wouldn’t that be £750,000 of taxpayers money. A LOT of money to be floating round for states workers to use.
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thankyou for your comments ng
can you say what happens to any airmiles accrued?
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As well as changing its masthead, is the JEP to continue its off and on style of The Sun front page reporting?
The use of purchase cards are tightly controlled in the private section, and just the same applies I would hope in the public sector.
Next story please.
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Ed – not really a lot of money for the single largest employer in Jersey.
Why is everyone so suspicious about a practice that abounds throughout the modern business world?
Look if it was unregulated I would share your concerns but is is not.
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Why on earth they need 1500 cards is beyond me…..there aren’t 1500 departments so surely one for each department should be enough (and easier to manager/audit) !!
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By the way NG, this sensationalised JEP report is quoting from the Treasury “As a result of the sheer number of cards and the freedom of the holders to use them where they like, the taxpayer could be paying far more for goods than is necessary, the Treasury said”.
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In their review they should make public how much is lost to the 29% rate applied and the charges added for using a credit card
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Keith.. I take your point but then again there are about 90,000 inhabitants on the island, about the population of a town in the UK, so that would be over £8000 each for the “largest employer in Jersey” to use. I repeat a LOT of money…
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To MR (Michael) from NG
Believe it or not, even States employees are permitted the odd day of annual leave.
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Do the tax office employees have credit cards because if they do they should haggle for some reduced price postage stamps from the post office to stick on the tax return envelopes. I don’t see why the public should have to pay for postage stamps in order to return the tax returns.
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Quotes from the full article :
Caroline Hasting, The Director of strategic procurement at the Treasury whose office is responsible for managing buying said:
“There are two many cards in existence and too few restrictions”
“The problem is that there is no control over spending”
She continues : We are “looking” at how we can put more controls in place
She added : We are dealing with it
We are trying to reduce the number and we are “looking” at ways in which we can restrict where they can be used and by whom
She continues : “It is very hard to get an accurate picture of what was being spent,by whom and for what, when so many people were acting independently
Health Chief Executive Mike Pollord jumps in : There are too many purchase cards in his department and he says that he is in the process of ” calling all the cards in and asking holders to justify why they needed them
He also said that ” he had already handed his in to lead the example
Pretty sensational, I’d say !!
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