Audit of City Credit Cards Protects Taxpayers
By Mission Viejo Councilwoman Cathy Schlicht
At the October 21, 2013, Mission Viejo City Council meeting, I made a motion that “the city council order an immediate external audit of the CAL-Card program to evaluate the adequacy of the control environment as it relates to purchases to determine that expenditures are being made in accordance with approved policies and procedures.” For those unfamiliar with CAL-Cards, they are credit cards issued to City employees to pay for work-related expenses.
In a 12-month period, these credit card purchases have increased by 31%, from $194,530 in Fiscal Year 2011-2012 to $254,950 in Fiscal Year 2012-2013.
The number of credit cards issued also grew from 9 cards in 4 departments in February 2009 to today’s total of 30 cards in 8 departments. The total of CAL-Card expenditures for the last three fiscal years is $601,282.
Audits should be routine, yet this program has never been audited since its February 2009 inception. Routine audits tend to increase the user’s commitment to monitoring their expenditures. The halo effect is similar to when you are driving, see a police cruiser and look at your speedometer to make sure you are driving the speed limit.
Staff will be reviewing and updating the CAL-Card Handbook next year. The results from this audit will provide knowledge and advice on how to fix any flaws that may be found in the program.
The public needs assurance that there is proper authority and oversight of the credit cards; that the uses for the credit card purchases have been for a clear public purpose and that purchased items have been properly allocated and coded in the budget.
As an example of the potential for abuse, a recent CAL-Card Audit at the Orange County Fire Authority revealed there were no policies in place to verify that purchased items were actually received, and that some vendors issued “gift cards” to the credit card users for returned items instead of crediting the account. Situations like these could potentially result in card users (employees) receiving gift cards at taxpayer expense.
Although we must not make any assumptions, with the many spending controls and restrictions in place, I am hoping for a clean audit. I will keep you posted on the results.
Cathy Schlicht is a Councilmember in Mission Viejo. She can be reached via email at: firstname.lastname@example.org.