09-17-2002 Special Called Regular Meeting

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u • Audit Committee Meeting Minutes -September 17, 2002 -Page 4 accumulation situation. Most of the support for those cards does not reside in Accounts Payable, however, support resides in the office of the cardholder, such as approval of their statements, initial check request and support in the office. Account Payable's reliance is primarily on the signature, not addressing if all support is attached. Under existing circumstances we would not expect Account Payable to perform verification or determine if adequate support exists. Read the last 2 paragraphs regarding this. Our recommendations clearly establish authority to consider a broad council ordinance, but with a detailed administrative policy, existing manuals and policies. These would need to be revised to be consistent, clearly define what expenditures that are not covered by car allowances, clearly identify and document per diem rate, and card payment and documentation should be more closely aligned with your current purchasing procedure. All statements should begin at Accounts Payable. Develop processing form with timely accumulation. Somebody other than the cardholder or assistant should approve all payments prior to going to Accounts Payable, plus we recommend an executive level employee be delegated to quarterly review all credit card accounts. The detailed transactions of credit card use, are points to keep in mind as you look at summary of these transactions. Note credit cards used by the Mayor, the City Manager and the Assistant City Manager were used to book flights/hotels for other employees and Council. There were two cardholders listed which are former employees, whom do not have benefit of receipts in their office or historical calendars, as do existing employees. Page 6 gets to the heart of the matter. Documentation was poorly handled. The auditor understands why internal or external questions arose about specific credit card transactions. This was poor business practice. Council should study these transactions to draw conclusions as to whether credit cards were or are being appropriately used. We listed some questions that Council should address, and use as a partial basis for any action that might be taken regarding employees or policies. Tab 2 is the summary of dollars by the cardholder. Total transactions and total net dollars expended in credit cards during this period totaled $143,170.24. The net dollars are due to some reimbursements. All the transactions are shown in gross. There are some employees who had both Visa and American Express; keep in mind the Visa card was not implemented by the City until February of 1991. Remember to note the cards were not always used by the cardholder themselves, but for other employees/Council travel. Page 9 is a limited analysis of transactions you will see in detail in Tabs 3-10. Mr. Tiller explained the breakdown of the transaction columns. A percentage column was given by cardholder. The next to last category is food and beverage; a large number is food and beverage for the entire audit period (breakdowns of support and without support). Tab 3 breakdowns each individual with their total. Page 8 is an explanation of headings on these particular schedules. The middle column "original support" is our review; the next column to the right is "type of expenditure", "U" is unclear what it was for; and the right hand column is "subsequent documentation" after gathering all the additional requested support, calendars, receipts, memo of explanation, which came in a number of different forms. We considered that information to be credible and supportable of that transaction and considered that to be documented. When "0" appears, there was no documentation for the expenditure. This is how they compiled the analysis. The way to utilize this document is to spend time reviewing those schedules and looking at the