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I APPENDIX III - MANAGEMENT LETTERS DEVELOPED AND ISSUED IN CONNECTION WITH LOCAL GOVERNMENT AUDITS I I II. STATUS OF PRIOR YEAR FINDINGS AND RECOMMENDATIONS I 04-1 Credit Card Purchases I Condition We randomly selected twenty-eight (28) credit card statements for testing and noted the following exceptions: I (a) Three (3) credit card purchases exceeding the maximum limit of $1,000 per individual transaction. (b) Four (4) transactions with no supporting documents attached to substantiate the nature of purchase made. (c) Multiple invoices issued by the same vendor on the same date for purchases of materials and supplies; aggregate amount of these invoices exceeded $1,000. I I Recommendation I We recommend that the City comply with the purchasing procedures as stated in the Code of Ordinance Section 2-140 (b) requiring solicitation of at least three (3) quotations on purchases exceeding $1,000 and refrain from overriding the established internal control surrounding the procurement process and credit card transactions to mitigate possible usage of credit cards for any unauthorized purposes. I The City policy manual requires submission of weekly reports using the "credit card receipt form". The credit card receipt form must be used to log all credit card activities and has to be submitted to the Finance Department on a weekly basis for review and reconciliation with the billing statement received from the Credit Card Service Provider before any payment is to be made. Compliance with this reporting procedure should be observed to ensure that all payments made to credit card companies are valid and authorized by the management. I I I Current Year Status We still noted similar exceptions during the year. This comment will be repeated. I Manaqement Response I Management is in the process of revising the current credit card policy and procedures relating to the use of City credit cards. I I I 7 I