Audit of city fuel cards finds at least $44K in ‘questionable’ spending

An internal audit of the city of Richmond’s fuel purchasing cards found lax oversight of how employees were using them, identified at least $44,000 in “questionable transactions” and led to multiple people being referred to the inspector general’s office for a deeper look at whether wrongdoing occurred.

The report released Tuesday by the office of Auditor Riad Ali examined the fleet fuel program, through which thousands of purchasing cards are issued to employees to refuel city vehicles at pumps run by the city’s fuel vendor. A lack of effective controls on the cards and oversight of how they were used, the audit found, put the city “at a heightened risk for fraud, waste, and abuse.”

“The city lacks a structured approach to monitoring fuel card transactions, allowing irregularities and policy violations to go undetected,” the report said.

To use the fuel cards, employees have to enter a personal identification number that’s supposed to be exclusive to them in order to allow managers to spot anomalies and track how employees are using the cards. However, the audit found PINs were “routinely” shared among multiple employees in violation of city policy.

“These violations undermine the purpose of employee-assigned PINs and compromise accountability,” the report said.

Having PINs be untraceable to particular employees appeared to create challenges for city auditors as they were looking into why fuel cards were being used after work hours on transactions that seemed unrelated to city business. When auditors inquired about a supervisor fuel card being used for almost 300 transactions totaling $16,208 when the supervisor wasn’t clocked in to work, they were told that “inappropriate activity occurred using some of these employees’ PINs.”

Multiple city departments use the fuel card program, but it is overseen by the fleet division within the newly formed Department of General Services. The division used to be housed within the Department of Public Works prior to July 1, 2024.

The audit found that some basic oversight mechanisms — such as tracking vehicles’ odometers and miles per gallon data to spot irregularities — could easily be worked around.

To fill up a vehicle at a pump, employees are supposed to first enter an up-to-date odometer reading. If the odometer reading falls outside a realistic range from the prior reading, the transaction should be flagged as invalid. However, according to the report, there is an “override” that can get the system to accept implausible odometer readings.

For the two years covered under the audit scope, “64 employees used the same odometer reading at least five times when fueling the same vehicle.” One employee entered a reading of “1” for 266 transactions. Another entered “12345” in 130 transactions.

“Without accurate and routinely reviewed odometer entries, irregularities in vehicle usage will go

undetected,” the report said. “In the city’s case, this failure contributed to questionable transactions.”

The audit focused on fiscal years 2023 and 2024. For those two years, the city spent nearly $6.5 million through the fuel program.

Though the number of questionable transactions was a small portion of the total spending on fuel, the auditor’s office noted that because it found “a significant number of policy violations,” the $44,000 figure was based on a “conservative” methodology that didn’t count all possible violations toward the total.

City officials concurred with all nine of the auditor’s recommendations to strengthen policies and procedures for the fuel card program.

“The Fleet Division will revise and implement a formal fuel policy that addresses the weaknesses identified in the audit and aligns with best practices,” the administration wrote in its response to the audit.

Contact Reporter Graham Moomaw at gmoomaw@richmonder.org