This article was printed in the Sunday, February 16, 2014 edition of the Knoxville News Sentinel.
An employee has a company-issued credit card. It’s a plus, a perk, a privilege. However, as the saying goes, as with a sword, a company-issued credit card has two edges – and one can inflict deep wounds on the user.
One edge is that it can be a helpful tool for a business person, easing travel and transactions. It’s also a sign of trust. The other edge can cut a person off from honor, respect – even their job. The three great incentives to misuse are rationalization, uncertainty (which can lead to rationalization) and dishonesty.
Government or private sector, each has potential for abuse. Large entities may be more susceptible because employees and managers may expect that their activities won’t be noticed because of the sheer size of the organization.
From the Associated Press, June 25, 2013:
“Poor oversight by the Internal Revenue Service allowed workers to use agency credit cards to buy wine for an expensive luncheon, dorky swag for managers’ meetings and, for one employee, romance novels and diet pills, an agency watchdog said Tuesday. “Two IRS credit cards were used to buy online pornography, though the employees said the cards were stolen. One of the workers reported five agency credit cards lost or stolen.”
A story from 2010 on Wilmington, N.C.’s WWAY-TV’s website detailed a typical example of credit card misuse. It said the head of a non-profit organization, which received thousands of dollars from local government, had used his organization’s credit card
“to buy groceries at Wal-Mart, then cigars from a tobacco shop, plus more charges. 2 months later he reimbursed the non-profit.”
We’ve identified the problem. Here are several suggested solutions.
This is, of course, not an exhaustive list. Talk to your accountants or attorneys about the controls you need to control your corporate credit cards. It’ll help you avoid rationalization, uncertainty and dishonesty.