09-17-2002 Special Called Regular Meeting

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Audit Committee Meeting Minutes -September 17, 2002 -Page 7 Mr. Meismer requested the determined per diem rate. The established per diem rate was looked at on a limited basis as it interfaced with credit card charges. We saw that on some occasions, several months ago, the City Manager was using a per diem rate equal to the Council rate. We didn't find anything that established authority for that and we did not find anything that did not establish authority. The inconsistency of documentation for meals was, quite frankly, pretty uniform from all the cardholders. Some employees, probably due to their job function, had a need to use their card for other things; unfortunately that documentation was not all that well put together. Mr. Meismer inquired about the fact that there was no one governing the process, or taking responsibility for issuance of the credit cards. Were questions asked whether any cards had been requested or denied, or anything along those lines? The auditor is not clear on whom you would ask to be authorized for a city credit card. In reviewing all the documents, the Director of Finance and the Purchasing Manager stated it was not their responsibility. Quite frankly, there is a document where the City Manager was given a card when he was employed and nobody told him he was responsible for that area. An attendee questioned where that document came from. The auditor does not know. In the auditor's view, it's a common practice. Have there been any recent requests for cards, and who would sign for them or initiate the process? It is our understanding, when the need for Visa cards was determined, it came about due to problems with booking things through American Express. It looks as though they went forward to put documentation together to obtain those cards. They would like to see auditors in that particular area, for Council to clearly establish where this is going to lie. It really should be a duel function between the City Manager and Purchasing Department, making a joint recommendation to the Audit Committee for proper oversight for which card and/or who should receive a card. There is not a clear view on a policy for credit cards, it needs to be clarified. There were no problems with payments being made on the cards; however, they did not have the detailed statement; and this has been very time consuming to obtain (approximately two weeks). The statements were all in line with what they were seeing. The auditor's timeframe was limited, their engagement letter was signed the beginning of August. The holiday period interfered with the interview process, plus a friend's funeral, and scheduling the interview date/time. A question was asked about information on some purchases that Mr. Herrera did not have any information on, with the auditors giving him a lead on where he maybe able to get the information required. Plus, late today, we received a fax from a former employee. This substance has been incorporated into this report. Councilmember Young asked if there were any guidelines or criteria that major companies use regarding limits of spending compared with the salary. It varies widely across the board; the answers can be varied according to the entity. The Internal Revenue Service does have their own guidelines. We can certainly compare the process, procedures and standards for use and documentation, but even city-to-city, the difference for road maintenance, etc., is difficult to compare. City budgets are hard to compare with each other with the broad parameters, it's hard to compare yourself, and there's some level of benchmarks. Each physical location for the city dictates the need for their budget. The same kind of thing you will