09-17-2002 Special Called Regular Meeting

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~. n Audit Committee Meeting Minutes -September 17, 2002 -Page 8 find with card use, the size of executive staff will dictate card use, how your accounts payable function, etc. For dollar level, you will be hard pressed to find. Discussing the category with no support, further dividing that into types of expenditures, there needs to be more information. Mr. Meismer asked if there were any outside or unsolicited contacts to the auditors. Mr. Tiller could not think of anyone that was not employed by the City. It was the auditor's opinion that the documentation looked reasonable in terms of presentation. For the most part, they were looking at xerox copies of original receipts, both in Purchasing and in subsequent data. You can imagine the quality of that, but no reason to think they were not legitimate. The responses returned by everybody looked very plausible. The current Purchasing Policy Manual has a sentence on the first page (paraphrasing; This manual attempts to address all purchases of the City regardless of its source). You can construe that to be credit cards, that is why we would like to see the issuance reside in Purchasing, their manual to dovetail and to be clear of credit card usage. Mr. Warren voiced concern about the status we are still in. Mr. Tiller assured him they now have all the transactions of what documentation existed, and a policy to compare. Mr. Mosteit also questioned the status. What the auditors are telling us is, as we look at this information, it is reasonable to assume that these are proper transactions for the City. The level of support could go either way. Determine whether or not, in your opinion, the nature of the transaction, the level of the transactions, were within reasonable expectation for the City of La Porte for that job function. For example, the Director of Parks and Recreation, what expenditures would you expect for him, would you expect to see 20 meals a month, 5 meals a month, guidance on how to use the card and how much. To be honest with you, there is no direction in your documents from the point of interview, to use as a good example that states the cardholder cannot procure that particular purchase. The Purchasing Manual does not give any guidance. These transactions do not seem to be beyond the bounds of expectations. Unfortunately, the job will fall back on Council due to the lack of guidance, and the lack of guidelines being documented. You have more information than at the beginning of the audit. You now know more about your process than you knew several weeks ago. I can tell you now, that with these transactions, we did not see anything fraudulent. We did not see any type of purchase that we felt was clearly an asset, such as, a trip to Hawaii where no meeting was being held. You can make an argument that some of these purchases in the miscellaneous column; if you believe that the purchasing document covers all purchases, you could say there was a violation of the purchasing document. However, one of the memos I read from your Purchasing Manager, basically said this document does not cover this. There's a wide array of misunderstanding amongst all of your people about what governs and what does not govern. Go back to page 2, those are the governing documents. Provide a separate document from a binding perspective that houses those documents. Mr. Tiller explained the report regarding documentation arriving at a later date and notation in the far column. Also, a trip file has a lot of the documents and this needs to be referenced in the accounts payable documentation. These are logistics that need to be worked out. If you look at the engagement letter, that what is not absent in other settings; generally there is some level of