Friday, May 29, 2015

[Solano County] City credit cards increase efficiency, grand jury reports


The use of credit cards by city employees has increased efficiency, the Solano County grand jury has concluded, and policies are in place to ensure employees are held accountable for purchases they make with the cards in cities across the county.
The 2014-2015 Solano County grand jury looked into the current policies regarding the purchasing cards, which are used by all seven cities in the county, and published its report on the matter this week.
In previous grand jury reports, some cities had “poorly written, or non-existent card usage policies,” according to this year’s report. The lack of policy “could cause a misuse of cards resulting in a loss of city funds.”
The cards are used to purchase goods and services needed to conduct city business. This increases efficiency by reducing the time taken to secure parts and services, reducing return trips to job sites from headquarters or corporate yards, eliminating processing purchase orders and simplifying the process of procuring travel arrangements, according to the report.
Before credit cards were used, the process of obtaining goods or services was “expensive and time consuming,” the grand jury found.
The jury interviewed city managers and financial managers, and reviewed each city’s purchasing card policies procedures, one month’s of card statements from each city and previous grand jury reports concerning credit card usage.
Each city holds agreements with various financial institutions for card services. Each card has a unique number and is issued to individuals by name to track their purchases.
Depending on the city, as few as five cards or as many as 200 cards may have been issued.
Each card has a set limitation which cannot be exceeded without authorization by a supervisor. Daily and monthly spending limits, enforced by the financial institutions, are placed on each card.
The grand jury found “only one known instance of an employee exceeding the policy rules.”
In that instance, the card holder purchased a $30 seat upgrade because of the “immediacy of necessary action and expediency.” He immediately wrote a personal check for $30 and attached it with a note to the receipt when he returned to the office. This was an acceptable action in his city, the grand jury reported.
The cards are only to be used for city business and employees may not use them to purchase alcoholic beverages, medicines or firearms.
The use of the cards for gasoline in city-owned vehicles varied by city. Some cities have corporate yards with gasoline pumps while others have agreements with local service stations.
To account for all purchases, cities require a receipt to match each item on the statement, which is then reviewed by a supervisor. A city manager’s card is reviewed by a person who does not directly report to the city manager.
The grand jury recommended continuing the use of credit cards for purchases and travel expenses.
There are transaction fees incurred by the cities who use credit cards, but paying the bill on time results in a cash rebate, offsetting that transaction fee. The grand jury recommended that cities use financial institutions which offer these cash rebates and pay all bills on time to qualify for these rebates. Some cities do receive a cash rebate, which is returned to the city’s general fund, but two cities did not participate in the rebate program at the time of the grand jury’s investigation.
The grand jury also recommended that all seven cities continue their current methods for the prevention of improper or fraudulent use of the cards, and determine if “other measures may be available that may enhance card security.”
“The use of reward cards is a sound business practice for controlling accountability and using rebates for offsetting administrative fees when card issuer invoices are paid on time,” the report concluded.
The grand jury required responses to all its findings from all seven city managers in the county.
May 26, 2015
The Reporter
By Jessica Rogness

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