A little more than one out of every three Lawrence city employees has a city-issued Visa card, and spending on the cards accounted for more than $1.5 million in purchases in 2008.
But a new city audit found that the city’s system for overseeing such purchases is sound.
“I took an overall view of whether the process to oversee these purchases is designed well, and it is,” said City Auditor Michael Eglinski. “The next step probably should be whether it is working well in practice.”
Eglinski said he is recommending to city commissioners that an audit be conducted later this year that will review individual purchases with the cards.
City Manager David Corliss said he’ll encourage commissioners to move forward with such a review.
“We’re pleased with the results of this audit, but it is vital that the citizens know that we are spending the money they give us appropriately and wisely,” Corliss said.
The city issues Visa cards to employees to make purchases that must be less than $1,000. City policies require the purchases to be reviewed after the fact by a department manager and the city’s finance department. Any purchase greater than $1,000 can’t be made with a card, but rather must receive prior approval either from the city manager or from the City Commission.
Eglinski’s audit did find a few areas where the city could improve oversight of the credit card system:
• A better process for ensuring that city credit cards are immediately canceled after a cardholder quits the city. Eglinski found 15 instances in 2007 and 2008 where a city employee left employment of the city but still had an active city credit card. On average, the cards remained active for six days after the employee quit, but in some instances they were active up to 20 days. None of the 15 former employees, however, attempted to use the active city credit card.
• Better city guidelines on when it is appropriate to purchase products or services via the Internet.
• Formalizing the practice of the mayor reviewing credit card purchases made by the city manager.
• Taking steps to ensure that all credit card purchases made by department heads are reviewed by the city manager’s office. Eglinski said his review found the city manager’s office generally was reviewing credit card purchases by department heads, but not in all cases.
City Commissioner Mike Amyx had asked for the city audit and said he was generally pleased with the findings. But Amyx said he also wants Eglinski to do a follow-up reviewing the specific types of purchases made with credit cards, and whether city employees are doing a good job of making the purchases locally.
Amyx also said he may want the discussion to get more explanation on how it is determined which city employees receive a credit card. In total, 294 city employees have a credit card.
“I thought that number was a little high,” Amyx said. “But I do think there are a lot of checks and balances that are in place.”
Corliss said he also was open to reviewing that issue, but said the cards do serve an important purpose.
“Not everybody who has a card uses it regularly,” Corliss said. “But for some employees it is an important part of their job to be able to buy parts or supplies quickly to keep key operations going.”
The report found that the Utilities Department, Public Works, and Parks and Recreation were the largest users of the Visa cards.
Eglinski’s report did find that use of the credit cards generally saved the city money versus issuing a purchase order for each item.
“The really big difference for the city is that you only have to issue one check per month for the credit card system instead of hundreds of checks per month,” Eglinski said.