An ounce of prevention is worth a pound of cure; or, maybe even more. But, with all the resources at their disposal, the City of Windsor should be implementing as many safeguards into the system as they can.
Apparently, this isn’t the case at all, as has been discovered.
Here is a great example of why a review audit is not as thorough as an audit conducted by an Auditor General. This is also proof how an Auditor General can save Windsor millions of dollars.
In a recent review audit by PriceWaterhouseCoopers into expense cards used by managers at the City of Windsor, major holes were found which demonstrate how our tax dollars are at risk.
Prior to 2013, Windsor issued purchasing cards to City departments which were to be used on valid city business, and not for personal expenses. In a summary report, documenting the period between January 1, 2014, and August 31, 2015, a total of over $5.4 million was racked up on the cards (P-Cards).
In the 12-month period between July 2014 and June 2015, the amount was broken down to over $3.2 million spent.
While some departments in the City are not responsible for the lion’s share of the expenses, those departments were not issued as many cards as the other departments. To be fair, a review of the table below will provide you with a look at how each department spent using their P-Cards.
The top spenders were Facilities, Parks, Public Works, Fire, Information Technology, Police, and Transit.
Although many of the transactions are assumed to be for official city business, the problem is the PwC report indicates that a documented rational, or reason, for the purchases is provided for just 25% of the sample, selected for review.
As statistics hold consistent, that would mean 75% of purchases have not been justified.
What’s ironic is that, during the same period, management claims to have instituted controls with regards to policies and procedures for the use of P-Cards. It is purported that the Purchasing Department was to conduct bi-monthly reviews of all purchases and flag unusual activity.
Unfortunately, once again the policies and procedures in place were not good enough to get the job done to avoid another Library Scandal.
Given the estimated $3.2 million spent over the 12-month period, this could mean that approximately $2.4 million was not recorded with any rationale, and only $800,000 properly documented, among the 237 P-Cards. With a cardholder spending, on average, over $1,100 per month on the P-Cards, there is a possibility of wild abuse without the proper controls and policies.
Having experienced how thorough a forensic audit can be on my political campaign, I can appreciate the difference between what a spot review and a comprehensive analysis can teach and reveal. This report is sounding the same alarm bells that went off during former councilor Al Magnieh’s debacle at the Library.
Do we, as taxpayers, need to be burned twice? Does everything have to be reactive rather than preventative? Look at what was revealed after a simple review.
An Auditor General would solve these problems all day long.