LOWVILLE – Lewis County is planning to tighten its policies and procedures for the use of purchasing cards after a state auditor’s audit found that several purchases made with the cards were either not properly authorized or that receipts for the purchases were missing.
The audit, released Wednesday, reviewed 366 credit card payments totaling $229,365 and found that all purchases were made for permissible county purposes.
However, the Audit Office noted that many of the purchases were made without the proper authorizations under the county’s purchasing card policy, lacked required documentation, or did not obtain the required three verbal or written quotes prior to purchase. Any of these purchases could represent a waste of county and taxpayer funds.
A purchasing card is similar to a credit card and can be used to make electronic payments for a variety of goods and services. The balance must be paid in full each month. Lewis County began using the cards in March 2022 and has 29 cards assigned to employees who work in 24 county departments.
The auditor’s audit found that while the county’s purchasing card policy requires prior approval, no receipts were uploaded to the financial system for 238 online purchases totaling $189,852 showing that department heads had given their approval prior to the purchase.
Other key findings of the audit include that while the county’s procurement policy requires oral or written bids, there was no evidence of oral or written bids for 52 invoices totaling $142,684.
Among other things, it also found that card users often did not submit forms that would subject purchases to the county’s tax exemption, and that some hotel expenses were paid at the rate normally charged rather than the often lower General Services Administration rates that would have been available if the county employee had known to ask. The county could have potentially saved about $4,800 in travel costs and sales tax, the audit said.
In addition, auditors found that the county’s purchasing card provider automatically electronically deducts the monthly payments due from the county’s general bank account. They said these automatic payments occur without direct authorization from the county treasurer to initiate these payments.
According to the auditors, there are no legal provisions allowing third parties to access county funds directly. Instead, all electronic payments must be initiated by the treasurer. If the vendor automatically withdraws funds, the county’s general fund balance of about $10 million could be at risk of fraud “if the county’s banking information falls into the wrong hands,” the audit said.
In a letter to the Audit Office in response to the audit, Assembly Chairman Lawrence Dolhof stated that the county agreed with the office’s suggestions and “has already taken steps to review our policies and address the recommendations made.”
“The Lewis County Board of Legislators shares the (Comptroller’s Office’s) commitment to ensuring that every tax dollar is spent appropriately and appropriately documented,” Dolhof wrote. “Lewis County has a long track record of meticulous internal controls and we are committed to refining our policies to better achieve those goals.”
