State audit shows universities improperly using state credit cards on booze, gifts

SEATTLE — A state audit concludes that Washington’s state universities are improperly using state-issued credit cards on alcohol, gifts, and even club memberships.  Leadership at the University of Washington takes issue with the findings and blames a difference of opinion on state accounting rules.

The audit focused on purchases in fiscal year 2012.  It found more than $225,000 in purchases prohibited by state policies.  The University of Washington accounted for the majority of that with $197,265 in what the auditor deemed unallowable purchases.

Click here to read a PDF of the full audit.

The audit looked at 3.5 percent of UW’s $119,351,579 purchases with state credit cards.  In that small sample it found $118,146 for alcohol and $72,532 for gifts like flowers or gift cards.

The audit focused on whether those purchases are allowed by state law when using state-issued credit cards.

“First of all, it's important to know that no taxpayer dollars or student tuition dollars are used to pay for these things,” said Randy Hodgins, VP of UW External Affairs.  “It's important to note that's a perfectly appropriate use of what we call donor discretionary funds for that purpose.”

The university leadership maintains that they did nothing wrong in using state credit cards for those purchases, citing a disagreement on how state accounting rules are interpreted.

KIRO 7 presented that argument to the Washington State Auditor’s Office.  Spokesman Thomas Shapley rejected that argument and said state policies clearly prohibit purchase of alcohol and gifts using state credit cards.

Hodgins says UW leadership is now working to have that language changed.

“We're working with the governor's budget office which writes and maintains the state accounting rules as well as the Department of Enterprise Services,” said Hodgins.  “We're working with them right now, they're very open to making the changes that will satisfy both the auditor and allow us to use this kind of payment.”

The State Auditor’s Office has no power to make changes.  It’s now up to state lawmakers, university leadership, and ultimately the voters.

Shapley says overall there were no major red flags concerning state universities’ use of state credit cards.

KIRO