The city of Richmond has enacted 12 of 16 recommended fixes for its purchasing card system that were identified through an internal review that won an award last month from a government auditing organization.

For the purchasing card audit completed last year, the office of City Auditor Riad Ali recently received an “exemplary” Knighton Award from the national Association of Local Government Auditors, one of three such awards in the large audit shop category. The Richmond auditing team will receive the award at the ALGA conference next month in Cleveland.

The purchasing card audit found at least $5 million in “questionable expenses” that occurred in a weak oversight and approval process for small government expenditures. Those purchased included a $1,423 catered lunch with a chef and servers for a Department of Public Utilities training session, a $480 suit purchase for an employee to wear to court and at least $26,000 in overpayments to a contractor caused by a failure to check invoices.

Ali’s office recommended several policy changes to strengthen the purchasing card system. Mayor Danny Avula’s administration significantly downsized the program after the issues came to light, reducing the number of cards in circulation from 320 to 67. Avula’s team has been working to implement the auditor’s recommendations before relaunching a more robust purchasing card system.

City officials have praised the purchasing card report as an example of how the auditor’s office, which reports to the City Council, works to identify problems at City Hall and help administrators correct them.

In a news release last week, Council President Cynthia Newbille (7th District) said the auditor’s office is “critical to providing independent oversight and recommendations” to help strengthen city government.”

“This well-earned distinction recognizes and reflects the high-quality work it constantly delivers and its ongoing commitment to excellence in internal auditing,” Newbille said of the audit award. 

In the release, Ali said he’s proud of his auditing team and is “especially encouraged that the city has implemented many of our recommendations as it works to relaunch the program.”

The audit recommendations the city has already implemented include measures to:

• Tighten the process for how purchases are approved and monitored
• Strengthen requirements for supporting documentation and disciplinary measures against employees who don’t file it
• Create safeguards allowing unusual activity to be flagged earlier
• Better tie purchases to existing contracts so the city can track how much it’s spending with each vendor
• Rein in the use of harder-to-track third-party payment platforms like Venmo, PayPal and Square

The Avula administration has also touted its work to resolve audit recommendations as part of its work to improve City Hall’s performance.

“Our goal is continuous quality improvement and world-class service delivery,” Chief Administrative Officer Odie Donald II said last month. “These outcomes are evidence that we’re clearly on that path, reflected in the month-after-month progress made in closing these open audit recommendations.”

Avula has praised both the city procurement office for implementing the purchasing card fixes and the auditor’s office for flagging the weaknesses.

“We see the auditor as an important partner in our continuous work to look for it, find it, and fix it, and we are extremely grateful for the role his team plays in helping us modernize internal systems, strengthen oversight, and improve accountability,” the mayor said in a release.

Contact Reporter Graham Moomaw at gmoomaw@richmonder.org