House Bill 312, which aims to prevent fraud and misuse of political subdivision credit cards, went into effect on December 2, 2018.  As a result, political subdivisions with an active credit card account have until February 2, 2019 to adopt a credit card policy in compliance with the law.

House Bill 312 regulates the way in which political subdivisions use credit cards, in an attempt to stem financial losses from the misuse of said cards.  House Bill 312 bans the use of debit cards by political subdivisions, except for law enforcement purposes and certain grant receipt purposes.  If a political subdivision’s fiscal officer does not retain general possession and control of the credit cards and checks, a compliance officer must be appointed.  The fiscal officer cannot also serve as the compliance officer.  Additionally, the compliance officer may not use the credit card account and cannot authorize other officers or employees to do so.  The political subdivision’s name must appear on each presentation instrument (credit cards and checks) related to the account.  House Bill 312 also requires the compliance officer to quarterly review the credit card accounts with the legislative authority and prepare an annual report detailing all rewards received on the account.  Officers and employees who fail to present an itemized receipt are liable to the political subdivision for reimbursement of all funds expended.  Finally, House Bill 312 reiterates that officers and employees who use the credit card account beyond the amount authorized commit misuse of a credit card account.

House Bill 312 also requires all political subdivisions with an active credit card account to adopt a credit card policy by February 2, 2019.  The credit card policy must include the following:

  • The officers or positions authorized to use the credit card account;
  • The types of expenses for which the credit card account may be used;
  • The procedure for acquisition, use and management of a credit card account, as well as the presentation instruments for use of the account, such as credit cards and checks;
  • The procedure for submitting itemized receipts to the fiscal officer or designee;
  • The procedure for credit card issuance, reissuance, cancellation and the process for reporting lost or stolen cards;
  • The credit card account’s maximum credit limit or limits;
  • The actions or omissions by an officer or employee that qualify as misuse of a credit card account;

Political subdivisions must make sure they have a credit card policy in place by February 2, 2019.  However, even political subdivisions with an existing credit card policy should review their policy in order to ensure it complies with the above requirements.

Fishel Downey Albrecht & Riepenhoff LLP advises public employers on compliance with newly passed legislation.  For questions regarding compliance with House Bill 312 or adopting a credit card policy, please contact David Riepenhoff (driepenhoff@fisheldowney.com) or Daniel Sabol (dsabol@fisheldowney.com) by email or phone at (614) 221-1216.