Audit says City of Saskatoon faces risks over purchasing and payroll

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A new auditor’s report says irregular processes around procurement and payroll could be putting the city at financial risk.

This is the first time the independent office of the city auditor has undertaken what’s dubbed a “continuous assurance report” to asses key business controls detect errors or deficiencies.

Auditor Sohail Saleem found issues with time sheets and purchase orders that were created after invoices were received, but says he saw no evidence of fraud or inaccurate payments.

“Based on the criteria used to assess controls, we did not find any evidence of occurrence of fraud or material inaccurate payments,” Saleem wrote.

“However, we noted there is a need to improve processes and controls around employee timesheet submission and approval, employees’ vacation balances, procurement process, segregation of incompatible duties, management of [purchase] cards and departed contractors’ and employees access to the system.”

Saleem says a large number of timesheets for hourly employees are not submitted or approved, and high vacation balances could result in significant financial liability.

“Payroll should strengthen processes to ensure timesheets are timely submitted and approved,” the report says, along with suggesting better monitoring of vacation balances.

Under procurement and payments, the audit found some purchase orders were created after the receipt of vendor invoices. Saleem says this could result in city buyers not following the competitive bid process and purchasing protocols.

The report says corporate supply chain managers should strengthen processes to ensure that purchasing protocols are followed.

Saleem also noted a lack of segregation between purchasing and receiving functions, which he says presents a risk of fraud.

The audit notes the processes for deactivating purchasing cards are not effective and recommends strengthening controls over their management.

The report is on the agenda for the next Finance Committee meeting at city hall on Wednesday.