Former director of Maine State Housing Authority (MSHA) Dale McCormick and one of her employees used their personal credit cards to make over $170,000 in purchases for MSHA, racking up cash rewards and airline miles for themselves, according to a report from the Office of Program and Governmental Accountability (OPEGA).
The OPEGA report uncovered the practice at MaineHousing, and since McCormick’s resignation in March, MSHA has put a stop to the questionable method of purchasing.
According to the report, in just five years McCormick was reimbursed $44,028 from MaineHousing, “most of which appear to have been charged on her personal credit card,” according to OPEGA, despite the availability of two company credit cards.
The OPEGA report also found that the MaineHousing IT director used a rewards-style Visa credit card for $127,000 in purchases, which could have resulted in as much as $1,270 or more in cash rewards or other points or gifts.
According to OPEGA, the excessive use of personal credit cards opened the door for “personal gain” by McCormick and the other employee, “in the form of cash back, points and other rewards.” A review of documentation at MaineHousing shows that at the time of the reimbursement for her purchases, McCormick used two different types of credit cards, first an American Express card that gave her Airline Miles as rewards, and later a Capital One Rewards MasterCard that advertises a cash back reward.
According to several credit card websites, these cards would typically expect to earn as much as one airline mile per dollar spent, or one percent cash back on each dollar spent.
Like McCormick, the IT Director at MaineHousing regularly used his personal credit card to rack up thousands of dollars in purchases that he was then reimbursed for through the agency. The IT Director was reimbursed a staggering total of $127,076 while working under McCormick, according to OPEGA. MaineHousing said it was common practice for the IT Director to make major computer purchases on his personal credit card and then seek reimbursement.
The IT Director’s reasoning for this, according to OPEGA, was because, “MaineHousing had given him the authority to purchase IT supplies from whatever Internet vendors offered best prices at the time, some of which would not accept purchase orders.” MaineHousing also said that many of the purchases exceeded the limit of the company credit card, but apparently not the limit of the IT Director’s personal card.
When asked for more details about the IT Director and his personal credit card, MaineHousing declined to provide information about him, asking that he be kept anonymous. “We respectfully ask that you do not publish the name of the Director of Information Services because he is not a public figure and we’d like to protect his privacy,” MaineHousing said in a statement.
MaineHousing said that the IT Director made the purchases with “MaineHousing’s management approval,” adding that they no longer permit the use of personal credit cards for such purchases.
Both McCormick and the IT Director likely would have seen additional gains in their credit scores as a result of the incurring, and subsequent payoff, of their personal cards through reimbursement.
The OPEGA report, finalized after the departure of former director McCormick, stated that this type of personal gain through use of personal credit cards was unacceptable. MaineHousing issued a response saying that MaineHousing has, “instituted a prohibition on employees’ use of personal credit cards for business expenses other than purchases associated with approved business travel.”
It is unclear if MaineHousing will seek reimbursement from McCormick or the IT Director for any rewards or cash received as a result of the frequent and excessive use of their personal credit cards.
If so, it wouldn’t be the first time the former director has had to pay back the Authority. The OPEGA report notes that McCormick was paid “duplicate” reimbursements on several occasions, and had to be contacted after her resignation to pay MaineHousing back for one of those duplicate reimbursement payments that hadn’t been noticed prior to the OPEGA report.