10-08-2002 Special Called Regular Meeting

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Audit Committee Minutes -October 8, 2002 -Page 7 Mr. Joerns commented on the purchasing procedures, where the departments purchase items and submit the appropriate paper work to Purchasing, these are all documented. From the Finance perspective, Mrs. Alexander feels there needs to be a Program Administrator, being the Director of Finance. This person would be ultimately accountable, for the program. We would get the cards through the depository and Finance would negotiate the depository, and work with the people on a daily basis. She feels this will not work as well if we use this as a purchase/procurement card; it will work very well as a travel and entertainment card. Finance writes the Travel Policy, checks those policies, reviews travel reports and maintains them. The way our City is set up, Purchasing is not under Finance, making it more difficult to be responsible for that area, when Finance does not have authority in that area. Chairperson Chuck Engelken questioned why the Purchasing Department is not under the Finance Department's umbrella. Most entities have the Purchasing Department under Finance. Mr. Joerns commented that some of it is organizational history. The prior Director of Administrative Services came through Purchasing, as faz as cazeer advancement. Mr. Engelken commented that from a fmancial accountability standpoint, it should fall under the Chief Financial Officer (CFO) in most organizations, with the CFO falling under the Chief Administrative Officer. Assistant Director of Finance Michael Dolby suggested putting it all in one azena, with one person responsible, providing Finance with better internal control. If Purchasing were a part of Finance, the Program Administrator could very easily be the Purchasing Manager. It is very hard to make it that person when they are not part of the department. The procurement card would have to fall under Purchasing, they will check purchasing items, not travel and entertainment. Councilmember Bruce Meismer questioned if there will be an oversight group of some sort, an administrative overseeing arm from Purchasing, as Mr. Warren suggested. Mr. Warren questioned if the credit card is used for personal reasons, will the holder be responsible for reimbursement to the City. He is concerned, if we allow this, we leave ourselves open. Mrs. Alexander explained it clearly states the cazd is not to be used for personal reasons, only for business. If the cardholder is charged for something personal, e.g., an item bought at a hotel gift shop, etc., the employee is responsible to reimburse the City for this item. Mr. Joerns commented on the draft ordinance, they reviewed previously, with provisions for reimbursing personal items which are included on a central bill. Mrs. Alexander reaffirmed the Credit Card Policy will be very clear with the cardholders. If Finance feels they do not clearly understand the policy, a card will not be issued to them. The policy clearly states that if the card is abused, it will be returned to Finance. The policy covers everything, where there will not be any oversights. Mrs. Alexander reviewed the strict procedures within the policy. She does not see how anybody would misunderstand the explicit details of the policy. The Audit Committee will receive a report of all credit card charges each quarter during the Audit Committee meetings. Assistant Finance Director Michael Dolby will be the Finance Department's approving official due to his CPA, his being an executive level employee and due to his auditing experience. At the time he submits the report, he will share with you any questionable items. The Committee will receive the report, along with a verbal report from Mr. Dolby, and he will be able to answer questions.