City Of Kansas City: City Auditor's Office Makes Recommendations To Strengthen Purchasing Card Program Oversight

Press release from the City of Kansas City:

01/06/2022 9:30 AM

NEWS RELEASE CONTACT: Douglas Jones, City Auditor, (816) 513-3300 The City Auditor’s Office released an audit focused on determining whether purchasing cards are used as intended and identifying program improvements needed to reduce the risk of card misuse. Between December 28, 2019, and January 27, 2021, city employees used purchasing cards for 7,808 purchases from over 3,000 vendors totaling about $3.3 million. The Finance Department has implemented controls to help prevent purchasing card misuse and many transactions followed these rules. However, auditors concluded city staff using or approving purchasing card expenditures did not always apply these controls as designed. This resulted in some staff and departments not using purchasing cards as intended and a number of rule violations such as: a potential ethics violation;

payments split to avoid card transaction limits;

lack of transaction receipts and required written approvals; and

not obtaining three bids or proposals for purchases over $5,000 and repeatedly purchasing near the transaction limit to avoid procurement rules. The audit also found the Finance Department’s transaction compliance reviews could be strengthened by focusing on departments with higher spending or transactions with the potential for policy violations, fraud, or abuse. Additionally, the city’s use of purchasing cards on 3rd party payment platforms (PayPal, Square, etc.) and e-commerce marketplaces (Amazon, Etsy, etc.) presents new risks to the city that should be addressed. We made recommendations to the directors of finance and general services focused on improving the guidance and training provided to cardholders and staff approving purchases. We also made a number of recommendations to the director of finance intended to strengthen program controls and oversight and mitigate risks. View the Full Report or Highlights online on our Recent Reports page. The audit is scheduled to be presented at the Council Business Session at 2 p.m. on Thursday, January 6, 2022. Did you know you can submit audit ideas to the city auditor?

This press release was produced by the City of Kansas City. The views expressed here are the author’s own.