An audit of Jupiter town employees’ credit card activities found $83,741 in “questioned costs,” according to the Palm Beach County Office of Inspector General. However, the town maintains it was victim to the office’s high demands and was therefore unable to avoid a negative audit.
The town spent more than $6.4 million on credit cards in the last fiscal year and had the highest average spending per card ($127,660) in all the municipalities that the office audited, according to the audit.
The “questioned costs” included 11 purchases totalling $33,723 that did not have pre-approval, 54 purchases amounting to $32,051 that didn’t have any approval and 11 purchases equaling $17,309 that did not have adequate documentation.
Auditors said the town has been working to create a Cardholder’s Agreement and Request Credit Card form, but noted that there were weak points that needed improvement.
The town’s purchasing policy says a cardholder can’t make a purchase over $2,500 from a single vendor without approval, and documentation of the purchase must be signed by the department director or finance department liaison.
The town said the findings that purchases had no prior approval was “categorically false,” according to a letter sent to Inspector General John Carey and director of audit Megan Gaillard Tuesday from the town’s financial director Michael Villella. He said the office’s requests for documentation were “very burdensome” and did not consider electronic documentation.
The audit also said the town erroneously paid $109.01 in sales tax and that it could have saved $29,145 over the next three years by choosing a credit card that had a rebate option like cash back.
The IG found “there was an excessive delay in the Town providing access to records,” and that despite requests from mid-March through mid-August, the office did not receive any documents, until after the audit was finalized.
“The Town has a firm grasp on what is required of our internal control systems, and we maintain control of the resources provided to us by our citizens,” Villella wrote.
Villella said the town had provided the IG’s office with the requested documents following an Aug. 9 meeting, but they were not reflected in the audit.
“Upon review of the current draft report, none of these cleared issues have been removed from the audit report, leaving Town of Jupiter staff completely confused and unable to understand how the Town could possibly avoid anything but a negative result from this audit,” he said.
The IG gave the town 14 recommendations, including finding a better credit card rebate program and creating a process to routinely monitor purchases for compliance.
“While Town management has not accepted the findings … we are encouraged they are implementing a number of the recommendations,” Gaillard said.
A statement emailed to The Palm Beach Post on behalf of Jupiter Town Manager Matt Benoit Wednesday said while the IG “may have a different view of how to implement certain processes,” the town’s practices comply with state law and an independent auditor found that the town’s internal controls were “sufficient.”
“The Town understands the role of the (Office of Inspector General) in evaluating the practices of local governments to ensure fiscal responsibility and eliminate waste, and appreciates the guidance they provide,” he said.