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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