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University of Nebraska staff wasted thousands of dollars buying things with pre-approved credit cards, Nebraska State Auditor Mike Foley said Thursday. Foley and his staff found several expensive purchases, including a 32” digital picture frame from Amazon.com for $750; a $628 fountain pen from Borsheims; a $219 golf club that can no longer be located and an unopened $250 Nintendo Wii gaming system that has never been used since it was bought months ago. Employees also flew first class. Policies and guidelines in effect on all campuses prohibit the purchase of first-class airline tickets, but nevertheless, the auditors found more than $283,000 in first-class airline tickets during the period under review, including 20 first class tickets costing more than $5,000 each. Five cost more than $10,000 each, and one – a round trip first class ticket to China – cost more than $15,000. The auditors reviewed thousands of transactions that were made during an 18-month period ending Dec. 31, 2008. They found gift cards were frequently purchased, despite rules forbidding it. On the UNMC campus, auditors found nearly $55,000 in gift card purchases associated with a “Thank U Reward” program, under which University employees accumulate “medallions” redeemable for gift cards for each time a fellow employee recognizes them for excellent service or special projects. The auditors also found many instances of employees using the cards to acquire cash. In some of these instances, there was little or no documentation as to how the cash was subsequently used, Foley said. Most of the cards have a limitation on the dollar amount of any given purchase, but University employees divided very large purchases into several smaller purchases to side step the limit -- a technique known as pyramiding. Auditors documented pyramiding on 120 transactions totaling more than $330,000. In a number of instances, auditors found active cards were assigned to former employees who no longer work for the University. On the UNO campus, one ex-employee’s card was not cancelled, and current employees ran up more than $20,000 in expenses over four months on that card. The auditor’s report itemizes dozens of examples of purchases with no supporting documentation whatsoever as to why they were made, Foley said. The VISA-issued credit cards – referred to as procurement cards, purchasing cards or, more commonly, p-cards – are used by University employees to make nearly 145,000 transactions a year, totaling well over $40 million. After hearing the audit report, four Regents and key administrators including University President J.B. Milliken pledged an immediate review of the “purchase card” program and prompt reforms to provide greater scrutiny of transactions to ensure that they are safeguarding public funds, Foley said.
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