Wednesday, January 23, 2013
Guv'ment Audit: City spent more than $125,000 on gift cards, recommends future procedural changes
Posted by David Schick @reportschick on Wed, Jan 23, 2013 at 12:20 PM
The gift cards were initially used mostly as a way to boost employee morale, but Duriya Farooqui, the city's chief operating officer, halted the rewards program in order to look into whether "improper and irregular" card distribution had taken place. As part of the audit, four city departments returned more than 730 unused gift cards worth close to $34,000.
The audit's findings also show that the majority of the gift cards were either prepaid credit cards or for department stores, and ranged from $25 to $100. The Department of Watershed Management purchased approximately three quarters of the city's gift cards. Another 15 percent were tied to the airport, while the Department of Finance accounted for another 7.5 percent of the total amount spent on the program.
- City Auditor's Office/Oracle Financials
In addition, the city report also found "no evidence to substantiate allegations of individual misconduct." It did mention, however, that inadequate records prevented auditors from determining whether there was misuse by some employees. About $4,000 worth of gift cards ultimately remain unaccounted for, albeit with a "lack [of] detail to verify accuracy."
City auditor Leslie Ward warned in the city's 11-page report that "gift cards are subject to the same risks as cash and are considered by auditors and other risk professionals to pose extremely high risk for loss."
Ward also recommended that specific policies and procedures become established if the gift card program were to continue. At minimum, she says, a custodian should be tasked with doling out cards, developing guidelines, and maintaining records.
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