San Jose Employees Play Fast, Loose with Work Charge Cards

One would think the indiscretions of George Shirakawa Jr.—and his wasting of taxpayer dollars—would still serve as a warning to public employees. But an annual audit of the city of San Jose’s procurement cards (P-cards) has unearthed a litany of violations—alcohol purchases, personal car rentals and way too much money spent on food.

One department hosting a group of 28 delegates charged the city $2,800 to dine at a fancy downtown restaurant—$700 of that on wine. An employee used his P-card to rent a brand-new BMW for personal use after his car got totaled. Another bought 10 non-city employees $255-a-head VIP tickets to an awards ceremony. Staffers in one department charged $45,000 at a business owned by their supervisor, who signed off on the purchases—a clear conflict of interest. And another supervisor OK’d the purchase of several tablets without asking permission from IT.

“Due to the decentralized nature of the p-card review process, it is important that all p-card parties are fully involved in the oversight of p-card transactions,” City Auditor Sharon Erickson writes in her report. “Holding a p-card is a privilege, not a right, and that privilege is contingent upon responsible compliance with city policy.”

The cards are meant for low-cost equipment, office supplies, tools and travel. City policy adamantly prohibits any personal use. That employee who got taxpayers to foot the bill for his luxury car rental got his card revoked. The audit doesn’t say whether he had to repay the city.

Going back a year from April 1, 939 card-holders made 41,000 purchases amounting to $12.8 million—a million bucks more than the year before.

The Environmental Services Department spent the most: $2.4 million from 4,638 transactions by 73 card-holders. Parks, Recreation and Neighborhood Services came in second with $2.3 million from 9,877 purchases by 201 card-holders. Third was Public Works, with $1.9 million from 5,862 purchases by 114 employees. The San Jose Police Department spent $1.3 million on 4,515 purchases by 167 employees.

On the bottom of the list we have the Independent Police Auditor, whose office spent $7,832 on 34 transactions.

The highest-spending City Council office was Councilman Pete Constant’s District 1, whose five card-holders billed the city $36,729. Councilman Xavier Campos’ office spent the least—$9,513 on 62 purchases—but listed a single card-holder.

In more than 80 instances, employees tried to circumvent the P-card’s single-purchase limit of $2,500 by billing multiple times, the audit found. In other cases, peers signed off on P-card statements instead of supervisors, which may have prevented them from speaking up about something that appeared to flout city policy.

There’s a widespread practice of turning in restaurant receipts that aren’t itemized, which makes it impossible to see how much each item cost and whether the card-holder bought alcohol (against city rules, of course). San Jose Inside caught ex-county supervisor Shirakawa employing this exact strategy. That report led to the reform of nearly every single county expenditure policy, according to County Executive Jeff Smith.

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Food purchases in general were way too common, according to the audit. City policy restricts meals for training and special events and expects the food to be cheap—things like bagels and muffins for staff training. But Erickson found that city employees spent $345,000 on food in the past year, often on meals at hoity-toity restaurants during regular work hours without anyone offering a reason why that meeting couldn’t have been held on-site without racking up a pricy lunch bill.

Meanwhile, there were several cases where P-cards of former employees were never deactivated and some card-holders had no qualms about sharing their card information with co-workers.

Erickson recommends that the city tighten up oversight and switch to an electronic accounting system to keep better track of individual purchases.

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Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

21 Comments

  1. Pete Constant’s office spent the most of any councilmember. His hypocrisy just keeps getting deeper and deeper. Johnny “Lance Armstrong” is a close second though with his political junkets to Ireland and Copenhagen.

    • My mistake, it was actually another staunch fiscal reformer (tongue in cheek), Madison Nguyen, who racked up the most on her City of San Jose credit card. Another hypocrite.

        • Nguyen sponsors a prom dress giveaway for the City, so i’m betting most of the expenses go towards that (it’s a pretty big event where teens get cleaned, used prom dresses and there are other giveaways), but I think she also gets businesses to help to offset the costs.

          • Hi ANN:
            Is that related to City business expenses? And the whole $45K?
            But thanks for your knowledge of this important information. Any explanation will help. TN

          • Yes to prom dress expenses, which is notable but also not the largest event D7 puts on. Almost exactly half of the amount spent by District 7 is on the Mid-Autumn Festival, which is 100% funded by sponsorships by local businesses.

  2. WOW! ALL that money should have been used to pay for more Officers and Fire Fighters!

  3. Jenn W

    “One department hosting a group of 28 delegates charged the city $2,800 to dine at a fancy downtown restaurant—$700 of that on wine. An employee used his P-card to rent a brand-new BMW for personal use after his car got totaled. Another bought 10 non-city employees $255-a-head VIP tickets to an awards ceremony. Staffers in one department charged $45,000 at a business owned by their supervisor, who signed off on the purchases—a clear conflict of interest. And another supervisor OK’d the purchase of several tablets without asking permission from IT.”

    It would be nice if you could identify the “Departments” referenced in your article. This would make “Request for Public Record Information” much easier.

    Our City Auditor should have insisted that the guilty parties face immediate termination from city service. Especially, “Staffers in one department charged $45,000 at a business owned by their supervisor, who signed off on the purchases—a clear conflict of interest.”

    Keep showing (in your own way)-“NO Love” for wayward government employees!

    David S. Wall

    • David you have to understand how metro’s journalism style works. You kiss up to the highest person on the totem pole, pick on those that don’t have the resources to fight back, and don’t piss off your informants.

      That being said, Jen has to walk a fine line here to get said info.

    • David,

      We have requested more specific information on departments and individuals noted in the audit. The city has given the initial impression it does not intend to provide these names, but we will continue to press.

      JK

      • Thanks JK-

        The resources of City Desk have already begun “chiming in” on this issue. The Auditor’s report will be the basis for more “city department” inquiries as well as input from the vast network of city employees who are more than eager to “rat-out” the swine that besmirches their city service.

        City officials may try to impede the identities of the city employees involved but, if it is not germane to the “work-product or to the “deliberative process” we will have to compare notes as the process reveals itself.

        I know S.J. Inside isn’t going to let this story rest. “Good-Job” to all at S.J. Inside!

        David S. Wall

  4. What an insult to every grunt city employee who took a pay cut or were laid off. $2,800 on a fancy dinner with $700 worth of wine? I know lots of cops that lost their homes and/or went through bankruptcy that would love to hear more about that.

  5. If I stole $45000 at work I would be fired. Fire them all. Get trust worthy people in there with a conscience and ethics.

    • If you read the actual audit report, the dates of the receipts audited were mostly when Figone was CMO.

    • The audit covers a time period before Ed Shikada was City Manager. Don’t blame him for this one.

      • Really Anne. He was assistant City Manager at the time. Even worse. He need to go.

  6. It’s unfair to base it on total expenditures. A couple of the departments that spend most are those that require the most outreach to the citizens and or stakeholders. Not an excuse, but there are costs incurred for public outreach, consultants, printing services, training etc. It’s terrible how the media throws out general comments and then the public thinks themselves into a frenzy. Not all expenditures are for meals. Those with bad judgement need to be addressed accordingly.

    It appears that the council districts are on on minimal budgets.
    At least they (council offices) feel what’s it’s like to want, like constituents want for their neighborhoods. And of course the department high ups, council and mayors need to secure their monetary and political future while taking away from others. Robbing Peter to pay Paul.

    Something is broken though.
    Frenzies don’t benefit us.

    Remember it’s poll related time.

  7. Using the City’s P-card to rent a vehicle strictly for ones personal use is such an egregious violation that it is unfathomable that anyone would think its allowable. Additionally, no approving official would sign off on this. This seems like a Department head or elected official.

    And the $45k spent by staffers at a business owned by their supervisor definitely needs more exposure. What a disgraceful lack of judgment in using the City’s P-card. This is an insult to all other responsible City employees who are extremely conscientious about the purchases they make.

  8. you should look a lot deeper into spending @SCVWD hearing aids, lunches, unused contracts, equipment, the 4th board room, all gotten in the same way from tax payers and guilty CEO’s, IT managers etc. who lie to the board….. want proof ask them for prs or i can supply you with tons of info.