The audit was initiated as part of the OIG 2018 Annual Audit Plan. In the plan, the office surveyed multiple municipalities across Palm Beach County and looked over credit card spending reports that were submitted.
The OIG selected Jupiter for an investigative audit because it reported $6,000,000 in purchasing card expenditures for the 2017 fiscal year.
“We're making sure our dollars are accounted for," said John Carey, Inspector General. “It’s a matter of how a town decides to do business. Most of the towns did not do business in that way.”
Carey and his team identified $83,741 in questioned costs, $109.01 in identified costs, and $29,145 in avoidable costs.
“Food purchases, Miami Dolphins tickets, a number of these types of purchases which may have been very legitimate, but the citizens need to know -- is there proper accountability?” said Carey.
The OIG found that three former employees’ credit cards were used to complete purchases after their last day of employment by other Town employees. Additionally, credit card purchases lacked proper approvals and adequate documentation, which resulted in those questioned costs.
The town also paid sales tax in error, with a total of $109.01.
The questioned costs also included dozens of purchases on items like computers and iPads that did not have pre-approval or proper documentation.
“For example, there was over $4,000 of gift cards that were purchased,” Carey said. "Not sufficient documentation and internal controls. Where did these cards go? Who was receiving these cards?"
The report states the avoidable costs stem from the town's failure to procure a more competitive rate for credit card rebates (i.e. cash back) that would have optimized the town’s rebate return on its purchases and cash transactions. The OIG found the town could save $29,145 in future avoidable costs over the next three years if participates in a higher yield rebate program.
The town also had the highest average expenditure per purchasing card of all municipalities surveyed, at $127,000.
According to the audit report summary, "We found weaknesses in the purchase review and approval process, the utilization of the rebate program, the card cancellation process, and the process for managing temporary changes to cardholders’ credit card spending limits. Generally, the overall credit card program lacked adequate written guidance."
Jupiter town officials declined to speak on camera but they did issue the following statement to WPTV:
The Town of Jupiter appreciates the efforts of the Office of the Inspector General in evaluating its credit card purchasing policies and procedures. While the OIG may have a different view of how to implement certain processes, the Town’s procedures are in accordance with the Town’s Purchasing Policies, generally accepted government accounting practices, and State Law. In addition, at the Town’s request, its independent auditor reviewed these audit findings and confirmed that the Town’s internal controls were sufficient. The Town understands the role of the OIG in evaluating the practices of local governments to ensure fiscal responsibility and eliminate waste, and appreciates the guidance they provide.
However, Carey said that type of independent audit that was conducted is just surface level.
"We get down in the weeds, they don’t look at the controls," he said. “We look at internal controls -- down and dirty -- where those tax payer dollars are actually being spent.”
The OIG also said they based their investigation on existing town policies and state law.
“These were violations in the very town’s policy itself, which the council resolution approved," said Carey.
And although the town disagrees with the findings, Carey said Jupiter officials are implementing some of 14 recommendations set forth by the OIG.
“And that’s the bottom line, is making government better," he said. "Even though we had some disagreements, the citizens are better served because we were there and because they are making action changes based on our recommendations."
OIG added that this type of audit should have been finished within six months but this audit took a year to complete. Carey said it took seven months for the town to provide the documentation OIG requested.