State agencies, employees late in paying off credit card debt

About 40 state employees and officials in nine different agencies - including one elected state legislator - are significantly late in paying off state-backed Diner's Club credit cards.

Nearly 3,000 of the cards are issued to state workers, administrators and legislators, who can charge reimbursable travel costs and other official expenses.

More than $2.1 million was charged to state Diner's Club cards last year, when they were issued free to the state. But because of the delinquent payments the cards will now cost the state $30,000 a year.

A report from Diner's Club shows nine state departments with accounts more than 120 days delinquent at the end of February.

The delinquent charges total $19,700 unpaid for more than 120 days and another $11,000 in charges at least 90 days old. Altogether, about $55,000 was owed on charges over 60 days old at the end of February.

The most prominent item on the list is $1,055 in unpaid charges by one member of the Nevada Legislature. The delinquent card belongs to an Assembly member or senator representing a Southern Nevada district.

But it wasn't possible to determine who as 24 of the 63 legislators have cards. State officials refused to release any of the names of the employees and officials on the delinquent list.

Deputy Attorney General Jim Spencer said because the cards are issued to individuals not the state, privacy laws prohibit the state from disclosing who is delinquent.

The agency with the biggest total on the delinquent list is Human Resources. It also has the most employees and hundreds of the cards. Human Resources showed $6,304 in charges over 120 days old owed by nine employees and another $2,521 for the same amount of time on one individual card in the Medicaid Division.

The department had another $2,122 in charges owed by 11 Human Resources cardholders that were at least 90 days old. With Medicaid added in, Human Resources accounts for $18,500 of the $55,000 total charges over 60 days old.

Three people in the Department of Motor Vehicles owed $4,890 for more than 120 days at the end of February, according to the report. The Department of Administration listed $3,072 in old charges on two individual cards.

Those agencies are all big users of the cards, but size and volume of travel expense each month doesn't necessarily mean more problems.

The biggest single user of the cards, at least during February, was Gaming Control, with more than $83,000 in charges on 42 cards. Its agents travel extensively worldwide to investigate current and potential gaming licensees and companies.

But Gaming Control showed no outstanding balances older than 30 days on any of its agency cards. Museums, Libraries and Arts, likewise, showed nothing due over 30 days, as did the Department of Prisons, NDOT, the Supreme Court and all the constitutional offices except the Attorney General's Office. The AG's office has nothing outstanding in the 120-day category.

Aside from individual cards, the Diner's Club system provides one card number for each agency to use to reserve airline flights with travel agents. Those charges are billed directly to the agency.

Some agencies were having trouble paying that account on time. Another $23,000 in charges older than 60 days appears in those records, including $2,172 owed for at least 120 days on the Department of Business and Industry travel account.

Treasurer Brian Krolicki, who created the system two years ago, said it replaced a cumbersome and inefficient cash advance desk.

He admitted one of the problems has been in getting employees reimbursed quickly so they can pay off the card after a trip. They are supposed to do the paperwork within five days,and the agency is supposed to process it in another five days.

He said that would let the controller and treasurer provide reimbursements in less than a month.

Anticipating some delay at the agency level, he said the contract with Diner's Club levies no interest on charges for 60 days.

"But some state employees are truly not getting what they need from their agencies," said Krolicki, adding that a few have not received payment for 120 days or longer.

"They should be in a timely manner reimbursed," he said. "It's unfortunate that some agencies still have a delayed ability to reimburse."

Even so, he said it's better than the system which handled travel before the credit card system was implemented.

A "travel desk" gave advances to employees before trips from a $180,000 revolving fund. But when agencies failed to pay it back from their budgets, the travel desk often ran out of cash. It was often shut down two days a week because no cash was in the fund.

The credit card system, Krolicki pointed out, never runs out of cash.

Bob Gagnier, head of the State of Nevada Employees Association, said he objects to the entire credit card system because it puts the financial burden on the employee and his personal credit. When reimbursement is late, he said, the employee either has to pay off the card with his or her own funds or possibly suffer damaged credit.

"It's the employee who gets the dun letter, not the state of Nevada," he said.

Gagnier said the cards should be issued in the state's name and paid off each month by the state.

Krolicki said a benefit to the state from the card system is that Diner's Club - not the state - is responsible if some charges must be written off as bad debts.

He was also able to eliminate one full-time employee who had handled the cash advances for traveling workers and officials.

Part of the savings, he admitted, is now being lost because the delinquent payments total $55,000. Because of those bad debts, Diner's Club will no longer give state agencies the cards free. At $10 apiece, it will cost the state nearly $30,000 every year for those credit cards.

A new Diner's Club contract is on the Board of Examiners agenda for approval Wednesday.