Toronto civic employees have more than 1,000 City Hall-issued MasterCard credit cards to make small purchases more efficiently.
But policies and procedures designed to safeguard the taxpayer against abuse aren't being followed, says the city's fiscal watchdog.
Jeffrey Griffiths, the city's auditor general, is reporting his findings -- and making 20 recommendations for the four-year-old program -- to the audit committee tomorrow. Since the program was introduced in 2005, city-issued credit card purchases have grown from $2 million annually to $8.5 million a year.
In 2008, there were a total of 29,500 credit card purchases. The cards are limited to a single purchase limit of $3,000, and monthly purchases of $10,000. Card holders are also prohibited from taking cash advances or from buying fuel.
It's estimated if the were used for just half of the small orders acquired through Divisional Purchase Orders, the city could save $100,000 a year from increased efficiency.
But in his audit, Griffiths found that supporting documentation was missing from 2% to 3% of purchases, which means the city, Griffiths wrote, "cannot validate the legitimacy or accuracy of these transactions."
Also, Griffiths found "questionable" purchases made for business meetings.
Also, as an experiment, Griffiths' office submitted a credit card purchase with a fake name and it was approved. Some employees who no longer worked for the city still had active credit cards, but Griffiths pointed out no purchases have been made with them.