The City of Nanaimo has made changes and is continuing to make changes around purchase card policies.
Earlier this year, the City of Nanaimo issued a press release indicating it had “completed a review” of its business expense policies, pertaining to the use of city-issued purchase cards, after an internal audit was conducted by KPMG.
The release stated that there has been no defalcation or fraud related to purchase card expense, but that the current policy was old and needed to be updated. It also went on to explain that a number of changes had been made, including a reduction in the number of purchase cards issued, and the adoption of a formal reimbursement system for incidental expenses.
The audit has not been released by the city, but was leaked online last week by Robert Fuller, the brother of Coun. Gord Fuller. Nanaimo Mayor Bill McKay told the News Bulletin that the KPMG report was specifically for the city’s legal counsel, but that he had seen it.
Laura Mercer, the city’s deputy chief financial officer, said while the city is still enforcing its current purchase card policy, some changes have been made since the KMPG report. She said the chief financial officer and the chief administrative officer can no longer sign off on each other’s expenses, which was previously the case.
“There have been changes in the fact that if we had a CAO and a CFO, they wouldn’t be signing off on each other,” Mercer said, adding that council must now approve the chief administrative officer’s expenses.
Victor Mema, former chief financial officer, also used a city purchase card to book 11 separate flights for personal use between July 2016 and September 2017. Those expenses were approved by Tracy Samra, chief administrative officer.
Mercer said she could not comment on specific details pertaining to purchase card use by individual employees, including senior management, mayor and councillors. She said couldn’t comment on the KPMG report but added that the “world has seen it.”
The city’s current policy around purchase card use prohibits employees from making any alcohol-related as well as personal expenses according to Mercer, who said while the policy prohibits personal expenses, they do happen.
“Occasionally when you sign up for a conference and if you are going to take your spouse, there is an extra charge for the dinner … and you can pay extra to have a ticket for your spouse,” she said, adding that often times there is no way to separate the expenses, but that employees typically reimburse the city.
There are also cases where the use of a purchase card is an accident. Mercer said in those instances, the vast majority of people immediately repay the city.
“The purchasing card looks a lot like other credit cards, so occasionally somebody uses it in error and in that case, we would say pay it back,” she said. “Usually people come in and say I used it in error, I am sorry, here is my cheque.”
In the event where repeated personal spending is occurring or usual expenses are made, Mercer said the finance department will flag the invoices, notify the individual and, if necessary, his or her superior.
“The normal course of action is to go back to the person and say this isn’t in accordance with the policy, please pay it back and these are the reasons why,” she said. “If it is something that is a bigger deal, normally we would go to the director of finance or the chief financial officer.”
Mercer explained that the policy requires receipts to be submitted with any purchases, however, there are instances where employees don’t provide receipts, simply because they forgot to get one. She said the finance department will request that individuals attempt to get a receipt for the purchase, but if the employees cannot find the receipt, they are required to describe the purchase. Most employees do submit receipts, she added.
Megan Waggoner, the records supervisor with the city, told the News Bulletin in an e-mail earlier this month that there were 175 active city-issued purchase cards and that there were 187 active city-issued purchase cards in 2017.
McKay said while one person has treated a city purchase card “differently,” that sort of use of purchase cards by staff isn’t the norm.
“To think that there is rampant use of the city credit cards is not the case,” he said.