10-01-2002 Special Called Regular Meeting

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e e Audit Committee Meeting Minutes - October 1, 2002 - Page 4 Mr. Tiller accepted comments and questions as follows: Councilmember Howard Ebow noted the clarity of the final draft confirming the City's necessity to get a handle on credit card use and issuance of credit cards. Many of the problems seem to stem from having two separate entities, instead of the credit cards being incorporated and clarified into the proper way we purchase. Mr. Tiller's concern, as an auditor, what practice is governing? It is management's responsibility to make sure employees understand the established rules that govern. He hopes the City will take their recommendations; and send to management for their review and comments. Mr. Tiller stressed the importance of not creating an overkill situation. Councilmember James Warren asked why the questionable items were not tested, such as, someone purchasing a personal prescription with their City credit card. Mr. Tiller did contact "Best Buy" on a questionable purchase the City. The auditors attempted to define what was purchased, with "Best Buy" being very cooperative. The problem is the transactions were not always recent. With "Walgreen's", the auditors had no receipts; they only had the date and the amount. It is very difficult to get copies of detailed receipts from credit card companies. The best approach may be to return to the place of purchase. Mr. Warren appreciates Mr. Tiller's report, stating it shows the City has some problems. He feels the Purchasing Manual should cover credit card purchases. Mr. Tiller agrees with Mr. Warren; however, he feels the practice was to ignore the manual. Management did not, in Mr. Tiller's opinion, explain to cardholders that this was the document to govern. The document needs to be clarified. Councilmember Peter Griffiths noted on page II how the auditor broke out that 53% of everyone provided information in the form of memos, calendar references and miscellaneous receipts. This should not be the standard practice of purchasing. Councilmember Bruce Meismer stated this was a loose term of proven documentation, actually it is showing the supporting document is not what somebody substantiated, what the actual expenditure was, all they did was provide their account of what the expenditure was. When these expenses were reviewed, the individual was taken at their word. It was not the auditor's job to find out if this was factual; as long as documentation was presented to substantiate the statement. Basically, it is impossible to know. Mr. Tiller agreed; noting the City needs to use this report as a tool for a higher standard document. He did not notice any questionable or unreasonable explanations. Mr. Warren states the document does not prove or disprove anything. He feels the Council should study the transactions. Mr. Tiller agreed that Council needs to decide how far they want to go in reviewing the report. Mr. Meismer questioned other City cards which were not audited. Mr. Tiller feels these cards were used more under the Purchasing function.