MSU police investigate $19K credit card theft

By Cash Kruth (Last updated: 08/28/09 6:31pm) MSU police are investigating an employee in the College of Education who may have embezzled about $19,000 while using a department credit card.

In July, the MSU police department was notified that a 25-year-old female employee in the college embezzled about $19,000, MSU police Sgt. Florene McGlothian-Taylor said.

Police reported the employee made unauthorized personal charges on an MSU purchasing card from October 2005 to June 2006. The discrepancies were noticed on monthly purchasing card statements, McGlothian-Taylor said.

The name of the College of Education employee is not being released because she has not been arrested, and police still are investigating the matter, McGlothian-Taylor said.

Purchasing cards, or p-cards, are credit cards given to faculty and staff to make small purchases, such as office supplies or books.

"If someone has charged personal items on a p-card, it depends on the magnitude," said Tom Luccock, director of MSU Internal Audit. "If one or two personal items might be caught by a reviewer … they will just pay it back."

In June, Patricia Ann McGraw, an office supervisor in the Department of Theatre, was charged with embezzling more than $114,000 during a nearly six-year period.

An internal audit was performed in the department, and after suspicious transactions made by McGraw were discovered, a report was filed in December, McGlothian-Taylor said.

McGraw left the department in February and turned herself into police June 20.

While MSU officials cannot speak to the specifics of certain cases, there are guidelines for how the university handles fiscal misconduct, Luccock said.

"We established this independent hotline and issued flyers around the university to provide a 1-800 number for folks to anonymously report financial fraud," he said.

The calls are handled by an independent agency based in Atlanta, and the system was established in November 2005. The reports are given to a university committee chaired by Luccock, where decisions are made on how the university will handle the case.

Limits and monthly statements are ways the university controls spending on p-cards.

"Departments let us know what their monthly spending needs are, and they have a standard limit determined by those needs," said Denise O'Brien, a representative from MSU Purchasing.

Cards are given a single purchase limit of $2,500. So for every charge, the user could not exceed that $2,500 limit. A limit is determined by a department's budget.

Monthly limits would vary by card, O'Brien said.

There are approximately 3,000 cards used by full-time faculty and staff, and a person would need the approval of a department to obtain one. P-cards are not given to undergraduate or graduate students. Faculty and staff who receive a card go through training to learn how to use them responsibly.

"It is not used for personal means, and the purpose is so (the user) can get the small dollar items they need quickly, which costs the university less," O'Brien said. "We have an oversight process where the department has to review transactions for every cardholder and sign off on it."

The p-card reviews are performed every month and cannot be used for travel, unlike University of Michigan's p-card system, O'Brien said.

However, when it is apparent that an employee is stealing money from an area of the university, both police and Internal Audit Department are contacted.

"Human resources, legal and internal audit will be involved in pursuing activities that appear to require disciplinary action," Luccock said. "As a general rule, we would not expect departments to conduct investigations themselves."

McGraw is scheduled for a pretrial conference at 2 p.m. Aug. 21 in Lansing's 30th Judicial Circuit Court.

"Whenever you have large universities as cash intensive as ours, and large numbers of p-cards, you have to keep in mind the relative size of the program," Luccock said. "All we can say is that we do what we can to educate folks and follow the process of vigorously pursuing appropriate penalties for misuse of funds."

Ashley A. Smith can be reached at smithas7@msu.edu.

Originally Published: 07/23/07 12:00am