Flashback: DISD Procurement Card Spending Almost $20 Million

[We've had several requests for the original story we posted in May, 2005, regarding Procurement Card Spending. Here it is.]

They're everywhere you want them to be, when it comes to Mastercard and Visa in the Dallas Independent School District.  Credit card spending alone, according to records obtained by Dallas.Org, totaled $19,921,229.76 for the 13 month period ending December, 2004.

Procurement cards are ordinary credit cards issued by DISD to its employees allowing purchases to be made outside the normal purchasing channels.  Procurement cards work the same way as any other credit card, allowing employees to charge goods and services.

DISD, rather the taxpayer, gets the bill.

Between 12/6/2003 and 1/5/2005 (a 13 month period), records indicate that:

• there were a total of 71,503 individual charges made by 1,143 people
• the largest total bill was $297,030.45 belonging to Halice Furtado in Dropout Prevention
• the largest single charge was to Prentice-Hall for $45,313.57 by Martin Riojas in Adult Basic Education
• the largest number of individual transactions was 635 made by Ronald Blakemore in Maintenance Services
• the average annual bill for all 1,143 employees using procurement cards was $17,429.51
• $21,335.50 was spent buying movie tickets in movie theatres
• $6,735.06 was spent on movie rentals at Blockbuster
• $388,512.05 was spent in restaurants and eateries (less fast food)
• another $146,702.78 was spent on fast food
• still another $185,264.58 was spent on outside caterers
• and another $811,741.94 was spent at grocery stores and supermarkets
• the amount spent on food does not include food served daily by the district in its cafeterias
• $132,445.26 was spent on postage stamps
• $74,595.64 was spent on or on behalf of members of the DISD Board of Trustees

These figures do not include purchases made through the District's standard purchase process (i.e. "purchase orders").  They are solely Mastercard and Visa purchases made on DISD credit cards.

One interesting note: though records indicate $288.54 was spent in liquor stores, the coding turned out to be incorrect.  The records do not separate how much was spent on liquor, beer or wine.  To find this information, one would likely need to comb through paper receipts--all 71,503 of them.

Though $20 million in credit card spending seems excessive, is it?

The largest charge for instance, $45,313.57 paid to Prentice-Hall, in all likelihood went toward books for adult continuing education.  But this creates a question: why charge it?  Why not document such a large purchase and issue a purchase order?

Then there's 11,985 individual charges to Office Depot totaling $2,917,180.19 likely for office supplies.  Average charge: $243.40. 

Would taxpayers be better served by planning, pooling and buying office supplies in bulk from a non-retailer?

Merchants pay bank fees of between 1.5% to 3% (in some cases more) on all credit card transactions.  Vendors recover this cost through increases in the price of their products.

Could vendors better provide DISD with cost savings through reductions in procurement card expenditures?

There is no doubt that procurement cards make spending easier.  But is almost $20 million dollars in easier spending really easier on the taxpayer?  Does it provide the best documentation taxpayers deserve to know that their money is being well spent?

Could a few tighter controls on spending ease the burden on Dallas' property owners who, themselves, already spend close to 60% of their property taxes paying the bill?

[Developing]