A February 2019 audit report regarding the use of Corporate (Council) Credit cards has stated that under Tory stewardship:
'Testing has shown that cardholders do not routinely collect and sign for the credit cards, and cards are collected by individuals who have no authority to have access to them, increasing the potential for misuse’.
In addition:
'The cards are not kept by the cardholder in compliance with both the NatWest T&C’s and Medway’s own guidance, and while kept in secure locations; are accessible to officers who have no authority to use them.'
What confidence should the public have in the use of Council credit cards when individuals with no authority to access them are doing so, especially as this is the second report to indicate problems with the process of managing council finances in regards to corporate credit cards since 2014-15 under your watch, indicating systemic weakness?
Minutes:
“A February 2019 audit report regarding the use of Corporate (Council) Credit cards has stated that under Tory stewardship:
'Testing has shown that cardholders do not routinely collect and sign for the credit cards, and cards are collected by individuals who have no authority to have access to them, increasing the potential for misuse’.
In addition:
'The cards are not kept by the cardholder in compliance with both the NatWest T&C’s and Medway’s own guidance, and while kept in secure locations; are accessible to officers who have no authority to use them.'
What confidence should the public have in the use of Council credit cards when individuals with no authority to access them are doing so, especially as this is the second report to indicate problems with the process of managing council finances in regards to corporate credit cards since 2014-15 under your watch, indicating systemic weakness?”
Councillor Jarrett thanked Councillor Osborne for his question. He stated that he believed this question referred to an internal audit review completed in February which would be reported to the Audit Committee in June of this year.
He stated that he wanted to assure Councillor Osborne and the public that they could have full confidence in the Council’s use of corporate credit cards; the Council took the results of the work of internal audit very seriously and was already making good progress implementing their recommendations.
However, to provide context to Members, of the Council’s 2,000 strong workforce, only 29 members of staff had corporate credit cards at present, with a combined total spend during 2017/18 and 2018/19 of £325,000, representing just 0.06% of the council’s gross expenditure of around £500million.
He stated that the audit did not find any evidence that the Council’s corporate credit cards were being misused by staff making purchases that were not legitimate council expenditure. Rather, the report referred to instances where a Personal or Executive Assistant was holding and using the corporate credit card of the member of the corporate management team they supported, as per legitimate instructions from that manager. The audit identified no instances of inappropriate use arising from the current practice, despite the risk. One practical outcome might be simply that credit cards would be issued to those Personal/Executive assistants for that purpose.
The 2014/15 review recommended that the Council reviewed who the cards were issued to. He had been assured this was done at the time. However, staffing changes in the five year period had resulted in a need to do this again and this review was already underway.
The report also noted that the majority of items purchased using the credit cards related to travel and equipment, for which the Council had other preferred methods of payment. However, the report also noted that there could be financial advantages and discounts available to justify the use of cards to make purchases online, and that the credit card guidance issued to staff could simply be changed.
He concluded by stating that officers were working to review this guidance now. He hoped the Audit Committee, when it considered this report forward later in the year, would find that satisfactory.