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Archive for Sunday, January 25, 2009

City credit card use stands up to audit

Lawrence city employees are racking up the purchases on city-issued credit cards, but a new audit finds that the system is sound for overseeing such purchases.

January 25, 2009

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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.

Comments

00766044 5 years, 6 months ago

Maybe they should look at how often they're buying food, have you seen those guys?

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wyattearp2 5 years, 6 months ago

I personally think that it's time for the city commissioners to forfeit their salary since the city manager states that the city is a city in crisis. The commissioners should want to sacrifice their pay to help this city financially, if not boot them to the curb...There are alot of other citizens standing in line to fill the vacancy for no pay....I would only hope that that our city employees would use the card and make purchases outside of Lawrence. Take the money else where not here....The Downtown Merchant Assn and the other businesses have never done anything for the citizens of Lawrence. When was the last time you seen an store ad, 35 % off for Lawrence Citizens, and not 50% off if you have a KU Student ID.

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Chris Ogle 5 years, 6 months ago

Why am I not surprised that our fine city would issue credit cards to employees? I can't wait for the bond issue to cover credit card expenses.

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just_another_bozo_on_this_bus 5 years, 6 months ago

"I personally think that it's time for the city commissioners to forfeit their salary "City commissioners are hardly paid as it is. A better idea would be to pay them a real salary to do what is, or should be, a full-time job. Pay them at least $35,000 a year, with proper staff support, so that we aren't continually stuck with Chambocrats doing nothing but ingratiating themselves to movers and shakers who will show their appreciation (at our expense) somewhere along the line.

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Chris Ogle 5 years, 6 months ago

Bozo- we finally agree. Lets see here..... Corliss salary could fund $20,000 per commissioner, and he would still be overpaid.

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cowboy 5 years, 6 months ago

Note that the auditor did not examine purchases . the cost effectiveness of those purchases.

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SMe 5 years, 6 months ago

“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.”Okay, so let's look at this. The headline is "City Credit Card Use Stands Up To Audit."But what the auditor said is the overseeing of the credit card use is designed well (but he also said there's some notable problems.) He then goes on to say we "probably....is working well in practice." So use of the cards hasn't been audited.Now I want to know what are the limitations on where items are purchased? Are we sure we're getting the best item for the least amount of money? (That's usually why there's a Purchasing Department) What are the policies on local versus Missouri versus Internet purchases? No, no, no, no. I think there's a quagmire here and nothing's actually been audited.

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nobody1793 5 years, 6 months ago

I think there should be a competitive bidding process for every city purchase.Crew needs a new drill bit? Solicit proposals from a minimum of five vendors, at least two from Lawrence, and subject them to a thorough review. 60-90 days later, you'll have that drill bit... and at the lowest possible cost.

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OonlyBonly 5 years, 6 months ago

No nobody you sarcasm is moot. Purchasing bids, and awards contracts, blanket purchase orders, to more than one supplier - preferably local - and crew goes there with a blanket purchase order number to get drill bit. Of course someone with material control background would ask, "why did crew need a drill bit they didn't have?" did they break it, lose it, never have it? Then work to resolve that problem.There are "blanket purchase orders" all over town - or there were once and all they had to do was go in get what they needed give the correct PO number, show appropriate ID and sign. Much more control over purchases with no more hassle.Think more, type less.

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pelliott 5 years, 6 months ago

Sanitation often divides up a purchase to avoid the $1000 approval level, often resulting in more expense. Yoo's is a chiseler.

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