Marietta-based accounting firm Bambo Sonaike CPA performed the audit and determined the city effectively had no accounting or oversight process for its P-cards.
Between January 2017 and November 2020, nearly 1,000 transactions were made using city P-cards. Sonaike’s firm was unable to determine a clear purpose for about $126,000 of those purchases. The city had almost no receipts for any purchases made during the latter half of 2019, the audit found.
This is a timeline of Stonecrest p-card purchases that didn't include a receipt.
Credit: Bambo Sonaike CPA, LLC
Credit: Bambo Sonaike CPA, LLC
“(This) sounds like a no-brainer to me, but I feel that some of these things need to really be emphasized,” Sonaike said during a council meeting last week. “For every single item that is being purchased, there ought to be documentation for them.”
Since so many transactions weren’t properly documented, the full scope of misuse remains unclear. Sonaike didn’t find any explicit examples where personal expenses were paid for using a P-card.
Here is a list of the largest record keeping errors within Stonecrest's purchasing card transactions.
Bambo Sonaike CPA, LLC
Every purchase was supposed to be authorized by the city manager, but the audit found that only 4% of purchases received proper approval. The city also provided no training on P-card use, and no periodic reviews of transactions took place.
City Manager Janice Allen Jackson said during the meeting that Jacobs has agreed to pay for any P-card use by its employees that lack documentation.
“Jacobs has agreed to reimburse the city by means of reducing the amount of their upcoming invoice to reflect any unverifiable charges that were incurred by their employees,” Jackson said. Mayor Pro Tem George Turner added that city leaders will discuss the offer from Jacobs before taking any further action.
A Jacobs spokesman provided a statement confirming the agreement: “Jacobs is cooperating with the City of Stonecrest and has reached an agreement in principle with the city to reimburse the City of Stonecrest for the portion of expenses attributable to Jacobs’ former employees.”
The city provided a list of the 10 people who had P-card access. Lary and former City Manager Michael Harris were the only people authorized to have P-cards. The others are all former city employees who were contracted through Jacobs, including some who were implicated and fired amid the CARES Act investigation.
City Finance Director Gia Scruggs said staff is working to draft a P-card training manual to help “prevent this situation from occurring again.” Only one P-card isn’t in her team’s possession — Lary has it, the city confirmed.
Scruggs also said the city is working to adopt the dozens of oversight and accounting recommendations made by Sonaike. Those include restricting P-card use for food and entertainment purposes, mandating monthly or quarterly reviews or transaction and shoring up documentation and reconciliation processes. Sonaike also said the city should emphasize the consequences for P-card abuse, which includes termination or criminal prosecution.
City Attorney Winston Denmark, who conducted the CARES Act investigation, said the City Council can explore some remedial actions, such as involving law enforcement. Sonaike added that a good next step for the city to shore up its troubled finances is to approve an external audit of bank statements.
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