Many political subdivisions in Ohio have credit card use policies to ensure that credit card accounts are only used for authorized purchases and to establish procedures for the issuance, management, use, and cancellation of credit card accounts. These policies will need to be reviewed and updated to comply with a new Ohio law (House Bill 312) that became effective this month and which is aimed at fighting credit card abuse in Ohio’s local governments. The main provisions of the bill are outlined below:
- By February 2, 2019, the legislative authority of political subdivisions that hold credit card accounts must adopt a written policy for the use of credit card accounts.
- The credit card use policy must include provisions addressing the following:
- The officers or positions authorized to use a credit card account.
- The types of expenses for which a credit card account may be used.
- The procedures for the acquisition, use, and management of a credit card account and presentation instruments related to the account including cards and checks.
- The procedures for submitting itemized receipts to the fiscal officer or the fiscal officer’s designee.
- The procedure for credit card issuance, reissuance, cancellation, and the process for reporting lost or stolen credit cards.
- The political subdivision’s credit card account’s maximum credit limit or limits.
- The actions or omissions that qualify as misuse of a credit card account.
- The name of the political subdivision must appear on each presentation instrument related to the account, including cards and checks.
- If the fiscal officer does not retain general possession and control of the credit card account, then the legislative authority must appoint a compliance officer. The fiscal officer or compliance officer and the legislative authority must, on a quarterly basis, review the number of cards and accounts issued, the number of active cards and accounts issued, and the cards’ and accounts’ expiration dates and credit limits.
- The fiscal officer must annually report to the legislative authority all rewards received based on the use of the credit card.
- An officer or employee “is liable in person” and upon any bond the officer or employee has given to the political subdivision to reimburse the treasury for any amount for which he/she fails to provide itemized receipts as required by the credit card use policy.
- Use of a credit card for expenses not authorized by the legislative authority constitutes misuse of a credit card account, and knowingly making unauthorized purchases is illegal.
- The new law expressly prohibits the “possession or use of a debit card account” except for law enforcement purposes; however, this prohibition does not apply to debit card accounts related to the receipt of grant moneys.
- These requirements apply to the following governmental entities: the legislative authority of a political subdivision; a board of township trustees; a board of park commissioners of a township park district; a legislative authority of a municipal corporation; supervisors of a soil and water conservation district; a board of park commissioners; a board of directors of a county agricultural society or an independent agricultural society; a board of education of any school district; the governing authority of a community school; the government body of a STEM school; the board of trustees of a college-preparatory boarding school; a board of library trustees; a board of trustees of a regional water and sewer district.
- In addition to the foregoing, the law permits the state auditor to publish the financial reports filed by local governments so that they are readily available to the public.
While many political subdivisions already have credit card use policies, it is important to review your policy to make sure it complies with the requirements of the new law. Also, talk to your fiscal officer, finance director or treasurer to develop a plan for adopting a credit card use policy and implementing the review and reporting requirements as described above.
Aimee W. Lane is a partner in the Public Law practice group of Walter | Haverfield providing general and special counsel services to municipalities. She is currently the law director of the Village of Moreland Hills and the zoning solicitor of the Village of Put-in-Bay. For more information about this article, please contact Aimee at 216-928-2985, firstname.lastname@example.org.