Non-Profit exec explains personal charges on corporate credit card

WILMINGTON, NC (WWAY) — Family groceries: $394

Stogies from the cigar shop: $20

A new policy to stop inappropriate credit card use by a local non-profit: priceless to a Wilmington City Council Member.

Councilwoman Laura Padgett called out some questionable credit card purchases by Downtonwn Wilmington, Inc. The organization receives tens of thousands of dollars each year in funding from the city and county. WDI executive director, John Hinnant, admits he used WDI’s credit card to buy groceries at Wal-Mart, then cigars from a tobacco shop, plus more charges. 2 months later he reimbursed the non-profit.

Hinnant explained to WWAY he went shopping the day after pay day back in April, and didn’t realize that the funds were not yet available in his checking account. “I was in a bind. I had groceries, we had family coming in town for the Easter holiday, we had a grocery cart full of groceries and a line 20 deep. I was in a bind and the only thing I could recall was that it had previously happened in the organization. And after a short conversation with my wife we figured it wasn’t a big deal, we’d use the company card and we’d reimburse the organization.”

Later that day, Hinnant bought cigars for the men in his family on the corporate card. Hinnant says his decision was regrettable, but at the time, there was no policy against using the company card for personal expenses.

There is now. Anyone at WDI caught using the corporate card for personal expenses in the future will be disciplined by the executive board, up to and including termination.

J. Wesley Casteen, a local CPA we consulted, said while it’s not ideal, there are some businesses where employees frequently use the corporate card for personal expenses, and then reimburse the company. He said the biggest problem that creates for a non-profit is not a legal one, but the appearance to the public. From an accounting perspective, it does add an extra step to the bookkeeping, and there’s also the risk of oversight, if the employee forgets to reimburse the company.