Houston employees used city-issued credit cards to buy more than $41 million worth of goods in the past two years, but failed to document what was purchased in more than half of those transactions.
In tens of thousands of cases, employees failed to include any description of what they purchased. In others, employees simply used “product” or even “generic product” to describe what they bought.
A Houston Landing analysis of city credit card purchases in fiscal 2024 and so far in fiscal 2025 found employees did not include descriptions on $28 million worth of transactions.
The lack of a description does not necessarily mean the employee did not submit a purchase receipt, but government finance experts and the city’s Chief Procurement Officer Jedediah Greenfield said receipts do not guarantee clarity because receipts can be vague or ambiguous. In those cases, likely only the employee and their immediate supervisor know what was purchased.
In February, an efficiency study into the city’s operations identified a lack of documentation from Houston’s city credit card holders and oversight from their departments. The Houston Landing obtained the data the report authors considered, as well as data from fiscal year 2025, which ends June 30.
Its findings reveal the extent of the record-keeping lapses among the roughly 1,100 employees with city-authorized credit cards, known as purchase cards or “p-cards.”
Among the Landing’s findings from fiscal 2024:
- Records of almost a third of the roughly 111,600 card transactions that year did not include a description of items purchased. Those transactions totaled $10.3 million.
- There were 1,027 city employees who had at least one transaction in which they did not include an item description. Of those, 499 employees spent at least $5,000 on items without including a purchase description; another 82 employees did not include descriptions in any of their transactions.
The Landing found even less documentation in the current fiscal year:
- Of the roughly 48,700 p-card transactions, only 88 had available item descriptions.
- Purchases without descriptions totaled $18 million.
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The lack of transparency – and a high number of transactions made through PayPal, which does not provide detailed receipts – prompted city officials to roll out a slew of changes to its internal purchase card policies.
“(We are) being more thoughtful in saying these are the absolute requirements that you need to do, being very black and white,” Greenfield said of the updated policy. “…So that we can come back if we need to and hold somebody accountable.”
The city replaced its top p-card administrator late last year in favor of a small team to oversee all department spending and began changing its p-card policies to be more explicit about requirements for documenting purchases, Greenfield said.
Cities use credit cards in lieu of checks or going through accounts payable for a number of reasons, said Mike Mucha, deputy executive director at the Government Finance Officers Association, a Chicago-based group that represents public finance officials in the United States and Canada.
The cards can be convenient when departments need to make quick, small purchases, and they provide faster payment to the vendors themselves, which routinely is a problem for city governments, he said. Fewer than half of Houston’s 2024 transactions that listed a total amount were for less than $100.
Local governments around the country have reexamined their p-card policies in recent years: separate audits from the Pittsburgh city controller and Richmond Public Schools showed employees misused cards and mislabeled purchases, possibly to obscure rule violations. An audit into Harris County’s purchasing card program this year found that reconciliations were not timely and the process of sales-tax removal was not efficient, among other findings. President Donald Trump’s Department of Government Efficiency cancelled more than 200,000 federal p-cards.
The Houston efficiency study, conducted by accounting firm Ernst and Young, prompted the city to bring all of its purchasing officers under the Strategic Procurement Division of the Finance Department, instead of having individuals working in each of the city’s departments.
Greenfield said he expects the necessary change in behavior to take time, and called employee education on the new policies one of the biggest hurdles.
“As we see the number of things that we want to address, we’re sort of putting them in order of the highest risk to the lowest risk, and we’re tackling each at a time,” Greenfield said. “How do you eat an elephant? A bite at a time.”
Thousands of purchases
When a Houston employee uses a p-card, city rules require them to document the purchase in an online tracking system. For example, if a member of the Fleet Management Department buys a tool at Home Depot with a p-card, that employee would upload the receipt and a short description of the transaction into the tracking system.
“If I had a receipt that says I bought item number 1234, that’s different than if, say, I keyed in that I bought ‘boots,’ so it just provides the two different levels of documentation,” Mucha said.
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Under the city’s revised rules, each p-card transaction must be reviewed by a supervisor and a Procurement Division staffer dedicated specifically to p-card oversight. The documentation then is sent to a citywide purchasing card administrator for final review.
Houston Landing obtained a full list of the transactions made by city credit cards in fiscal years 2024 and 2025 that are supposed to detail the date of each purchase, merchant, cardholder name and department, and the amount spent. The receipts for each transaction were not included in the database.
In some cases, records showed a “unit price” for an item without including the total cost of the purchase.
The Landing’s review found nearly 45,000 transactions in fiscal 2024 that did not list the total cost of the purchase.
The Fleet Management Department spent the most without including item descriptions, followed by the Parks and Recreation and Aviation Services departments.
Even when employees filled in the spaces for descriptions, the information did not always provide clarity. For example, a Houston Police Department employee spent $110 at a conference center, but only listed the purchase as “product.”
Purchase descriptions should be able to stand alone and tell any supervisor exactly what was bought and why, said Dan Ramey, a private auditor and adjunct professor at University of Houston.
Keeping track of every receipt is difficult but necessary because government spending has to be transparent, Ramey said.
Greenfield attributed the lack of documentation and failure to observe policy in part to the high volume of purchases by city employees. Fleet Management, for example, made more than 20,000 credit card purchases in fiscal 2024, records show.
Greenfield said the education process will require employees to understand the importance of slowing down to follow proper procedures.
“Yes, it’s important to do the work that you need to getting vehicles taken care of, but you’ve got to do this piece, right?” he said. ”…It’s folks knowing that not only are we asking for this, but we’re going to come back and look for it, and if it turns out that there are issues with that, we would rescind or take back a p-card if it’s not being used properly.”
Currently, employee violations of the city’s p-card policy can result in suspensions of 30 days to six months, with more egregious violations potentially leading to termination.
Ramey said he doubted employees read the full policy manual, which makes annual training sessions even more important. He said management needs to revoke the cards of people who repeatedly failed to justify their purchases or such abuse would continue.
“And it says in there (the handbook), if you don’t follow the rules, you’ll lose your card. I guarantee that doesn’t happen,” Ramey said.
Card limits
Per city policy, p-cards generally are to be used on purchases costing less than $3,000. However, the cards can be used for higher amounts when approved by a supervisor to pay for services or supplies negotiated in a contract City Council previously approved. For example, a single card-holder with the fire department spent almost $196,000 in 2024 for firefighter gear, which was allowed because of an existing contract with the vendor.
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Breaking down high-dollar contracts into individual p-card transactions can provide transparency for the public in a way other forms of payment do not, Mucha said, if they are used correctly.
In the 2024 fiscal year, there were 131 transactions that exceeded $3,000.
High-dollar p-card transactions can reap benefits for the city because – just like with personal credit cards – issuers may offer cash rebates on some purchases. For example, Houston received more than $389,000 in rebates from processor JP Morgan in 2018.
Such rebates, however, do not give employees clearance for “split bids,” Greenfield said.
In its report, Ernst and Young cited several instances in which city employees used p-cards for multiple transactions with the same vendor in a single day, suggesting they may have been trying to work around the $3,000 purchasing limit.
Greenfield said the department always has tried to pay close attention to potential bid-splitting, but the EY study identified how many employees had more than one p-card, making the practice harder to catch.
Greenfield said the city will revise its rules to bar employees from having more than one card.
Improving oversight
The procurement division in December barred p-card holders from using PayPal to make payments because the processing system does not provide detailed receipts.
In fiscal year 2024, the city had 261 PayPal transactions totaling more than $231,000; 253 of those did not include an item description. From January through March of this year, there were 30 payments totaling $15,000 made through PayPal, in violation of the new policy.
Many businesses use PayPal as their internal payment system without employees’ knowledge, Mucha said, making documentation even more important.
Still, Mucha advised against adding so many levels of oversight that effectively could negate any rebates and savings from using the p-cards.
“You don’t want to be in a situation where you’re costing $10, $15, $20 worth of overhead on every $50 transaction,” he said.
An intensive audit would make sense, he said, as the city rolls out its new policies, but oversight can change once employees are in compliance with policy.
“Once the program is going, I think the whole point is that you empower your employees to make those smaller, routine purchases,” Mucha said.
Ramey suggested keeping both “preventative” and “detective” controls – individuals to monitor transactions and technology to routinely scrape and flag suspicious purchases. Government entities normally do not keep the latest tools because of the cost of the systems, he said.
“Do they have more money? Yes. So, where should the money go: to serving you and I, fixing our streets? Or buying a new credit card system?” Ramey said, continuing that voters care more about potholes than a card tracking system.
Investments in training, the audit division and accountability measures can help, Ramey said.
“Good news is, we’ve got credit cards,” Ramey said. “The bad news is, we’ve got credit cards.”
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