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Board of Ed Cuts Up Credit Cards

Germantown Pulse, Germantown News, BOE

The Montgomery County Board of Education cut-up their county issued credit cards at Monday’s Board of Education meeting, by approving sweeping changes to the process and guidelines which govern the way Board members are reimbursed for expenses incurred while serving as Board members.

Among the changes, which are effective immediately, Board members will no longer use district-funded credit cards and will instead; receive a per diem allowance when attending professional conferences. The Board will also employ a new process for determining which public events, conferences, and meetings that Board members can attend at the district’s expense.

Board of Education President, Phil Kauffman said, “I am pleased that the Board has approved these changes and has affirmed their commitment to being good stewards of taxpayer dollars.”

The Board had come under fire in June when a News4 Washington investigation reported that Board members where spending thousands of dollars on meals and fancy hotel rooms while attending education conferences in Washington D.C, and passing those expense on to taxpayers. Prior to Monday’s policy changes there had not been a limitation on what could be submitted as work expenses. The Board’s actions on Monday are an effort to eliminate such expenditures.

The Board formed an Ad Hoc Committee to look into the processes and guidelines governing Board member expenses. As part of the review, the committee hired The Venable law firm to review expense reports from the past two years and make recommendations for changes based on the findings.

After it’s review, the Ad Hoc Committee, which included Kauffman, Board vice president Patricia O’Neill, and the chairman of the Board’s fiscal management committee Michael Durso, sent recommendations to the Board for consideration.”

“Based on the Ad Hoc Committee’s work and the review of outside counsel, it was clear that our expense processes and procedures were weak and were not always followed,” Kauffman said via a Board press release. “I believe these changes were needed and will help build public trust in how the Board conducts business and spends valuable taxpayer resources.”

While the committee was conducting its review, all members of the Board agreed to stop using the Montgomery County Public School-issued credit cards. The committee found that the irregular expenditures were the often the result of inconsistences and ambiguities in the old guidelines.

Prior to Monday’s changes, the Board's use of MCPS-issued cards and other reimbursable expenditures has been guided by the 2009-2013 Purchasing Card User's Guide and the November 2008 edition of the Board's Operations Handbook.

According a report written by Venable attorney Karl Racine, “The guidance set forth in these documents is comparable to the procedures utilized by other boards of education in Maryland and elsewhere, but outside counsel's review reveals that these documents, along with practices developed over the years, led to certain inconsistencies and ambiguity. Confusion regarding the appropriate rules of the road substantially contributed to variances in the manner in which Board members sought reimbursement for official MCPS business. The guide and handbook, and the practices developed over the years, too often left the judgment of what was or was not reasonable to individual Board members and Board of Education staff.”

The report continues, “In the absence of shared norms and expectations, Board members tools different approaches in exercising their own judgment in determining whether an expense was related to their official duties. The subjective nature of such judgments, combined with the variances in the manner that Board members perform their work, contributed to the issues at hand.”

The report also found a lack of training regarding “best practices and over-reliance upon anecdotal norms” when it came to what was and was not acceptable for reimbursement. In addition, the range of consequences for failure to follow procedures and guidelines was not clearly communicated to Board members and BOE staff,” the Venable Report said.

The report found that in many cases full documentation to support the expenses was lacking. “For instance, there are a number of charges for meals where the attendees and/or the purpose of the meals were not sufficiently identified. In a number of instances, itemized receipts were not submitted.”

While these instances may seem to touch on impropriety, the report goes on to state that in most cases the expenses were indeed appropriate under the old guidelines. “Subsequent follow-up with individual Board members and BOE staff,” the Venable Report said, “confirmed that in the overwhelming majority of cases Board members' expenses appear to have been permissible under existing guidelines and reasonably related to official Board duties.”

However, the review “did not uncover evidence of intentional action taken to improperly use the credit cards for personal expenses.”

As a result of these instances and the potential for the appearance of financial impropriety the Board had taken the step to discontinue the use of MCPS-issued credit cards. However, the review “did not uncover evidence of intentional action taken to improperly use the credit cards for personal expenses,” said Kauffman.

All of my Board colleagues are honorable, dedicated and well-intentioned public servants,” Kauffman said Monday. “The well-being and success of all MCPS students is our top priority and each of us works tirelessly—in our own way—to make sure our schools have what they need to serve our students.”

Beyond the removal of credit cards, Board members will not receive a daily allowance for nonlocal travel. These per diems will be in accordance with funding caps used by the federal government.

Board members must all have all out-of-the-county preapproved, including attendance at out-of-county hearings, work group meetings, professional development opportunities and conferences. Board members will not be reimbursed for lodging at hotels located within 50 miles of the Carver Educational Services Center in Rockville, unless there are extenuating circumstances. Also, any out-of-county travel must be preapproved in order for a member to receive a reimbursement.

The Board developed a list of preapproved conferences, events and meetings that its members would be authorized to attend or travel to in 2014-2015. The Board also established a process for considering requests that the county pay for attendance at an event, meeting or conference not on the preapproved list.

Board addressed the meal reimbursement issue by setting a clear guideline for meals. Board members will no longer be reimbursed if they purchase a meal for someone else, such as a constituent, political leader or MCPS staff member. Board members can be reimbursed for their own meals if they are directly related to Board business, and at a rate consistent with caps set by the federal government.

The policy adopted at Monday’s meeting also sets forth that while Board members will continue to be provided with equipment and supplies to maintain a home office while serving on the board, but the Board will no longer grant reimbursements for home office Internet service.

Finally, the Board approved a “more robust process” for expense approvals. Also, the Board’s Fiscal Management Committee will review summary reports on the status of expenditures by Board members and the Board office. The full Board will receive the reports in their regular Board packets as an item of information and the reports will be available for public inspection. An annual external audit of Board expenses will also be conducted.


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