Council told to get card spend sorted

P-cards, or purchase cards, are similar to credit cards - the difference being payments are totalled and made in full on the 20th day of each month to avoid incurring interest.

Watchdog says significant number of transactions yet to be authorised or coded.

Auditor-General Lyn Provost has told the Auckland Council to urgently address purchase card payments after finding they were being made without appropriate documentation.

Ms Provost said her office raised some concerns around the management of P-card expenditure last year and noted instances again this year where supporting documentation had not been scanned into the system.

P-cards, or purchase cards, are similar to credit cards - the difference being payments are totalled and made in full on the 20th day of each month to avoid incurring interest.

The council has about 460 P-cards in use. In the 2011-12 financial year, staff ran up $1.7 million on the cards.

Ms Provost said a review of the P-card reconciliation for February this year found a "significant number of transactions that have been paid were yet to be authorised or coded".

"We noted that previously there were controls in place around managing outstanding approvals, but this appears to have deteriorated this year," she said.

Ms Provost put the P-card issue in the "urgent" basket - defined as a significant deficiency in internal control, a breach of significant legislation, or risk of reputational harm.

Last night, council chief executive Doug McKay said he accepted the findings of the Auditor-General and the need to do a better job of implementing controls.

He said some council staff had been less than diligent where P-card payments should not be approved until receipts were attached and managerial approval was given.

Mr McKay said officers had received an early draft of the Auditor-General's concerns and had already addressed some of the issues.

The management team would be told today to be absolutely diligent around the recording, approving and paperwork for the use of P-cards, he said.

Mr McKay was not aware of any P-card abuse by staff.

Ms Provost noted that the council's risk and assurance department had done work on P-cards for the audit and risk committee - and council officers were following up on the findings in the report.

She urged the council to quickly address the concerns raised in the report "as this exposes council to the risk of inappropriate expenditure being incurred without approval".

A breakdown of P-card expenditure provided to the Herald last year showed that many executives from the Auckland Council and seven council bodies do not have or did not use a card, including Mr McKay, Watercare chief executive Mark Ford and Waterfront Auckland chief executive John Dalzell.

Mayor Len Brown does not have a P-card after the intense scrutiny he came under over his card expenditure as mayor of Manukau during the 2009 Super City election campaign.

Credit card concerns

* Auditor-General wants urgent action on council P-card procedures.

* Concerns about payments without appropriate documentation.

* February audit finds significant number of problems.

* Chief executive Doug McKay tells managers to be diligent around P-cards.