As the city of Port Coquitlam grapples with the aftermath of employee theft — revealed yesterday in an exclusive Tri-City News story — a number of Lower Mainland municipalities say they believe their purchasing safeguards are tight enough to avoid a similar problem.
They say their checks and balances are sufficient and most haven’t experienced employee fraud to such an extent as in Port Coquitlam.
In that case, an employee was found to have stolen about $175,000 in taxpayers’ money over a three-year period — the individual has since repaid the funds — by purchasing tools and small equipment using a city-issued credit card and through city-approved vendors who charged the items to the municipality’s accounts payable system. The items were then sold through a “third-party broker,” according to PoCo’s chief administrative officer.
Asked about its purchasing policies and restrictions, the city of Coquitlam’s general manager for finance and technology, Michelle Hunt, said about a quarter of its staff have corporate-purchase cards.
The majority of those cards’ limits are $2,500 per transaction — or $4,000 a month — with exceptions for staff who have to make emergency or specialty purchases (such as in the fire or police departments), for bulk buying and for booking group travel, conferences or courses.
“However, these purchases do require prior approval,” Hunt said, adding all transactions by city staff require a supervisor or manager to sign off.
Hunt said a review by the cardholder’s boss is done on a monthly basis and the finance department scrutinizes each purchase made each month; staff are contacted directly if expenses are unclear, she said.
As well, the city has a whistleblower policy to protect co-workers who may notice problems with card use.
In Port Moody, about half of the municipal employees have city credit cards that allow staff to make a single purchase up to $5,000, said spokesperson Rosemary Lodge.
Still, every transaction has to be approved by a manager — “no exceptions,” she said, adding, “Employees are required to abide by strict guidelines related to card use. Any misuse can result in the loss of card.”
No cash advances are permitted and any changes to the limits must be approved by a department head or the finance department, Lodge said. As in Coquitlam, there are monthly reconciliations and all receipts have to be submitted. Periodic audits of transactions are also conducted by the city’s finance staff.
The city of Surrey has a much lower number of city-issued credit cards for its 4,199 staff. There, only 481 employees have purchasing abilities, with the maximum monthly amount at $10,000. Its internal auditors also conduct occasional reviews and managers have to sign off on monthly statements, said Oliver Lum, the city’s communications manager.
Darin Leite, director of corporate services for the city of Langley, said about a third of his organization holds city cards, with limits ranging from $500 to $25,000.
In his municipality, monthly statements are reviewed by a supervisor and the finance department, and “detailed receipts must be provided for each purchase,” he told The Tri-City News, noting cards are also restricted by amount and vendor types.
The city of Vancouver also keeps a close eye on its employee spending, with only 781 credit cards issued for its payroll of more than 10,500 workers.
Most of the credit cards have a monthly limit of $7,000 — and a transaction limit of $2,000 — and anything above requires a green light from a finance head, said Jag Sandhu of corporate communications. As well, each expense must be approved by a manager.
“Purchase card transactions and approvals are recorded online,” he told The Tri-City News. “Managers are accountable for approving transactions monthly; review and monitoring is performed centrally by finance, and internal audit departments review the program periodically.”
Still, over the last 20 years, through audits, three issues have been discovered that have resulted in city staff terminations, Sandhu said.
Last month, the city of Port Coquitlam hired a consultant to conduct a forensic review of its systems and procedures for employee purchases; its report is due next week. After its recommendations are presented, city council is expected to discuss whether police should be involved. That employee, who has not been named, resigned last week.
