Denver city auditors flagged 14 times that City Council members or their staff members violated the rules by using city-issued credit cards to donate money to local organizations between 2021 and 2023.
The improper spending, cited in a recent audit, included one donation that was spread over three transactions in a single day. The Denver Auditor’s Office said that suggested the cardholder, who wasn’t identified, was trying to get around a $2,000-per-transaction spending limit for city purchase cards.
Those findings were highlighted in Auditor Tim O’Brien’s long-planned report focused on City Council operations. His office released the 46-page report, including a council response letter, last week.
The audit was set to commence in 2021, but O’Brien sparred with then-council President Stacie Gilmore over the parameters of that work.
“I’m glad we were finally able to conduct this audit,” O’Brien said in a news release. “The council’s complete agreement with our recommendations shows the common sense and productive nature of the results.”
The auditor’s office made 14 recommendations to the council that were focused largely on the tracking and use of city-owned computer equipment and both training and tracking for financial transactions. Those include understanding the differences between donations, sponsorships and grants, which have varying rules.
The city’s purchase cards are intended to be used to pay for business expenses. The auditor’s report says city rules don’t allow the cards to be used to make donations, though sponsorship fees are allowed. The council’s own rules do allow council offices to make donations if they meet certain criteria, but they would have to be paid out in another way.
The council has been bolstering its central office operations since January 2022, said Robert Austin, a spokesman for that office. The changes include hiring the office’s first human resources director and a fiscal administrator.
“These new positions have been actively engaged in building infrastructure through the development of policies and procedures,” Austin said in a statement last week. “As a result, many of the identified issues (in the audit report) were already under our review and actively being addressed during the audit period.”
O’Brien’s team also zeroed in on an inventory of city-owned technology and equipment. The analysis found that the council’s inventory report failed to account for 43 items, including Dell, Microsoft and Apple products.
“We also found some council members may have purchased devices like Microsoft Surface Pros and Apple iPads without letting Technology Services know,” O’Brien’s office said in its news release. “If inventory is not accurately tracked and managed, assets could be lost, or devices could create cybersecurity risks due to missing security patches.”
One of the audit report’s recommendations was that the council’s central office review all purchase card transactions to find patterns of misuse, including looking for evidence of intentional split transactions, computer equipment purchases and improper donations.
That process is already in place under the watch of the office’s fiscal administrator and the city’s finance department, current council President Jamie Torres wrote in her response letter.
“The Fiscal Administrator will continue to review purchases to ensure they comply with regulations …” Torres wrote.
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