Department Gift Card Purchases - January 2013
Department Gift Card Purchases
Released January 2013
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We undertook this audit at the request of the chief operating officer following allegations of improper and irregular handling of gift cards. The chief operating officer suspended purchase of gift cards in early October 2012 and directed departments to turn unused cards in to the Department of Human Resources. Four departments turned in 737 cards valued at $33,875.
- City departments spent approximately $125,000 on gift cards valued at about $128,000 between January 2008 and September 2012
- Department records of card distribution and use, especially before fiscal year 2012, are inadequate to account for the disposition of individual gift cards.
- No evidence to substantiate allegations of individual misconduct, however, it is not possible for us to determine whether cards were misused, nor is it possible to determine how many employees received cards as compensation or the amounts received
- Federal and state guidelines identify gift cards as cash equivalents that should be computed as part of an employee’s taxable compensation when provided as employee recognition.
- The Department of Watershed Management exceeded the $20,000 annual small purchasing threshold from a single vendor in fiscal year 2009
- The chief financial officer acknowledged that he commingled cards purchased by the Department of Watershed Management and Department of Finance funds