Audit flags Pittsburgh Public Schools for issuing employees too many credit cards

City Controller Rachael Heisler is urging Pittsburgh Public Schools officials to cut back on the millions of dollars charged each year to hundreds of district credit cards for business expenses, warning of the potential for abuse.

From January 1, 2021 through June 30, 2024, there were 59,936 credit card transactions in the school district totaling nearly $11.6 million, according to a report released Thursday.

During the scope of Heisler’s review, the district closed 433 cards — but opened 158 new ones. That would leave 463 cards, down from 738.

The City of Pittsburgh, for comparison, has fewer than 100 credit cards in circulation.

While the cards can speed up purchasing through bypassing invoices or online procurement systems, they are more susceptible to misuse.

Heisler, who serves as controller for both the city and school district, acknowledged that the district has been working to cut back on its reliance on credit cards, even as hundreds of employees use them for business expenses.

Employees with district credit cards include teachers, support staff, administrators and people who work in maintenance and operations.

Often called procurement cards or p-cards, the cards are issued to employees for business-related transactions under $500.

Spending on those credit cards has been trending downwards. In the 2023-24 school year, it dropped by about 14% from the 2021-22 school year.

“PPS has made significant progress in assessing and improving the p-card system over the last few years, but our office believes there are still too many p-cards in use,” Heisler said.

She urged the district to continue decreasing the number of cards in circulation and the amount of spending on them to mitigate risk of fraud and misuse.

Heisler did not allege any specific instances of abuse on the credit cards.

Pittsburgh Public Schools spokeswoman Ebony Pugh in a statement said the district was encouraged by Heisler’s recognition of their efforts to reduce the number of credit cards and curb spending on them to reduce risks.

Amazon Prime subscriptions

Heisler urged district leaders to continue reducing reliance on credit cards by finding other ways to pay for the most common expenses.

Nearly half of credit card spending covered maintenance and repairs. Almost a quarter went to Amazon purchases.

District credit cards in that time charged more than $13,600 for Amazon Prime subscriptions, which were unnecessary because the district already has a Business Prime account, the report found.

That account also offers special pricing that was likely going unused when cardholders used their own accounts.

Heisler recommended additional training for cardholders to guard against such inefficient uses and encourage people to use the best buying options.

While district policy limits credit cards to purchases under $500, an informal system allows the Department of Finance to bump up that limit for emergency purchases.

Heisler’s review showed 39 credit cards had transaction limits exceeding $500 as of June 30. Audits performed on those specific cards showed “a high volume” of transactions exceeding the $500 cap.

Heisler suggested a more formal process for establishing rules around spending beyond that limit. She also recommended additional oversight on cards with higher spending.

“While efficient, it has been noted that P-Cards still carry a risk of misuse,” the report said. “A continued reduction of active P-Cards and total spending will help to mitigate potential fraud and non-compliant transactions.”

Heisler’s report comes after Pittsburgh grappled this year with misuse of a city credit card that raised questions.

Department of Parks and Recreation Director Kathryn Vargas authorized more than $20,000 in credit card payments to a contractor who had been fired from another city position and was later charged with an unrelated crime. Though an internal probe chalked up the credit card scandal to “honest mistakes,” it also acknowledged that Vargas violated city policies.

The Allegheny County District Attorney’s Office executed a search warrant, which alleged improper payments with a municipal credit card and criticized city officials for refusing to cooperate with their probe.