To improve its internal controls, better control costs, and prevent abuse from occurring, the city should require the finance department to review credit card expenditures for appropriateness.
The Purchasing Manual, as updated February 4, 2014, contains a section on credit card procedures and responsibilities and outlines the responsibilities of the Finance Director to review and compare credit card statements against their corresponding receipts to ensure accuracy, accountability, and appropriateness of purchases. The City Administrator is required to perform such review for the Finance Directors credit card purchases. (See page 20 of Purchasing Manual.)
On June 25, 2013, the Finance Department issued the City of Vernon Purchasing Manual to all City departments, as adopted by the City Administrator pursuant to the City's Competitive Bidding and Purchasing Ordinance (Ordinance No. 1200). The Purchasing Manual was prepared by the Finance Department, with significant input from the City Attorney's Office and all City departments. The Purchasing Manual sets forth all of the requirements of the Purchasing Ordinance as they apply in a practical manner to the day to day operation of the purchasing system, including ten pages detailing the City's credit card policies and procedures.
Although the city's purchasing manual includes specific procedures for credit card purchases, it does not include a requirement for the finance department to review credti card expenditures for appropriateness.
The city indicates that the finance director now reviews all credit card purchases for appropriateness and obtains explanations from the purchaser or responsible department heads for questionable purchases before payments. The city expects to adopt a purchasing manual by the end of June 2013, which will include the implementation of controls required for proper separation of duties and uses of credit cards and memorialize the finance department review of credit card expenditures.
The city did not address this recommendation in its August 2012 response. (See 2013-406, p. 194)
Agency responses received after June 2013 are posted verbatim.