City audit reveals major flaws in fuel card program

During a recent government meeting, city officials discussed significant findings from an audit of the fuel credit card program, revealing critical issues that could impact operational efficiency and costs. The audit highlighted four main concerns:

1. **Expanded Scope and Costs**: The fuel credit card program has grown beyond its initial approval, leading to potentially higher expenses as retail fuel prices rise. Some purchases made with the cards appear unnecessary, given the city's existing bulk fuel program.

2. **Card Mismanagement**: Approximately one-third of the city's 149 fuel cards were found to be missing during the audit, with some cards not assigned to specific vehicles. This mismanagement raises questions about accountability and tracking.

3. **Technical Limitations**: The audit revealed that technical restrictions on the cards, such as limits on fuel types and maximum gallons, were not effectively enforced. This was attributed to both the capabilities of the card system and a lack of centralized vehicle information.

4. **Lack of Accountability**: There was a noted absence of user authorization documentation, training, and supervisory review of transactions, contributing to a general lack of accountability among users of the fuel program.

In response to these findings, the city has developed a fuel card manual aimed at addressing these issues, although its implementation is pending the selection of a new fuel card vendor. Currently, seven of the nine recommendations from the initial audit have been implemented, with 11 in progress and three not yet addressed. A follow-up review is planned within the next 18 to 36 months to assess the status of these recommendations.

Council members expressed concerns about compliance levels compared to other departments, noting that the follow-up review occurred sooner than usual due to the risks identified in the original audit. Discussions also touched on the rationale behind the fuel credit card program's expansion, which was initially intended for emergency vehicles that may need to refuel outside their districts.

The meeting concluded with a commitment to further investigate the tax implications of fuel purchases made through the program, as questions arose regarding whether the city is paying taxes on retail fuel purchases. City staff will provide additional information on this matter.