Fort Lauderdale Audit Uncovers Questionable P-Card Spending and Control Weaknesses

Audit Reveals P-Card Misuse and Control Failures in Fort Lauderdale

A recent internal audit in Fort Lauderdale has brought to light a series of concerning issues regarding the use of city-issued credit cards, known as P-cards. The audit, conducted by City Auditor Pat Reilly, scrutinized transactions between October 2023 and December 2024, uncovering numerous instances of questionable and prohibited spending. These included significant purchases like $10,250 for Florida Panthers hockey tickets and catering, $3,100 in gifts for airport lessees to attend a Las Vegas conference, and $1,800 for leather luggage as gifts for an advisory board. Furthermore, a substantial $20,000 in fraudulent charges went unreported for months after a P-card was compromised, only coming to light through the audit's findings.

Systemic Weaknesses in Internal Controls Identified

Beyond individual instances of misuse, the audit pointed to systemic failures in the city's internal control environment. The report explicitly stated that the Finance Department was not fully compliant with state laws and regulations concerning internal controls for P-card transactions, administration, recordkeeping, and supervisory approvals. This lack of compliance, according to Reilly, creates a "persistent vulnerability to fraud, waste, and operational efficiency." The findings indicate that improvements recommended in a prior 2019 audit of the P-card program were not adequately implemented or maintained, leading to a recurrence of similar issues.

Management Response and Path Forward

While no disciplinary actions have been reported yet, City Manager Rickelle Williams acknowledged the audit's findings and stated that measures are being implemented to strengthen internal controls and enhance spending oversight. These include improved inventory tracking, stronger monitoring programs, additional training, investments in new technology, and a study of internal controls. However, a notable disagreement arose between the City Auditor and the Finance Department regarding the interpretation of "fraud," with the Finance Director asserting that no city employee committed fraud, only third-party actors. This highlights a potential gap in understanding and defining fraudulent activity within the city's financial oversight. The audit underscores the critical need for continuous monitoring and timely re-audits of P-card programs to safeguard public resources and maintain financial integrity.

Key Audit Findings:

• Finance was not fully compliant with laws and regulations related to property internal controls for P-card transactions.
• Finance was not fully compliant with laws and regulations relating to P-card administration internal controls.
• Finance was not fully compliant with laws and regulations relating to P-card recordkeeping and supervisory approval internal controls.
• Prohibited and questionable P-card purchases occurred, representing non-compliance with the P-card Policy and Standards Manual.