An internal audit of the Niagara Region's employee purchasing card program has raised concerns about compliance.

There are more than 1,000 cardholders in the program, which was implemented in 1999 to help cut down on administrative costs.  Employees use the cards to purchase things like office supplies or gas without having to ask the Region to cut them a cheque. 

Last year, roughly $7.2 million was billed on the cards or roughly $6,900 per employee, according to an audit report dated December 2012.

However, the audit turned up a number of compliance issues.  Supervisors and managers weren't keeping track of receipts or other supporting documentation for the purchases made, necessary for HST rebates.  Some purchases exceeded the $5,000 limit specified in the purchasing card policy or purchases were split into multiple transactions to circumvent policies or single purchase limits.

As well, several errors were discovered, resulting in an overage of about $25,000 in the amount of recoverable HST claimed by the Region that had to be repaid. 

Finally, concerns were raised about employees no longer with the Region but still holding on to cards. An average of 7 weeks elapsed between employee termination and card cancellation.  In addition, it was discovered there's no procedure in place to deal with cards belonging to employees on extended leave.

The Region's Chief Administrative Officer, Mike Trojan, stresses all of the purchases were on the up-and-up and, despite the hefty cost, well within what is expected. 

"When we look at the average usage on an annual basis, on an employee by employee basis, I think it's in the realm of normal." 

However, in order to reduce non-compliance issue, emails are being sent to all cardholders reminding them of card policies and procedures.  As well, senior management and other departments are in the process of completing internal reviews.

"I think some compliance testing on a more local basis within departments has already started to take place and will probably take place in the future on a more regular basis."

A follow up audit is scheduled to take place soon.