The city of Sacramento’s investigation into $2 million in employee credit card charges came to a close as City Auditor Jorge Oseguera presented his findings and recommendations, including reducing the number of employees who can use credit cards, stricter authorization policies and updated credit card use training.

The scandal that rocked City Hall this summer was addressed without so much as a whimper, as the discussion finished in just under 13 minutes with little public comment. 

“The city’s policy under the credit card purchase program explicitly states that they are to be used for business purposes only,” Oseguera said. 

With department credit card purchase totals reaching upward of $1.4 million, Oseguera’s investigation took only a snapshot of the city’s 2011-12 fiscal year. A sample of 27 statements from 316 transactions found that the most common misuse came from three sources:

• While transactions reviewed did not reveal extensive personal purchases, some transactions violated policy. 
• Some purchases were approved without proper documentation.
• Purchase card statements were not always approved by the authorized signers. 

Oseguera noted that the regulations governing credit card use by city employees could get confusing, as the “rules come from various sources,” and that increased training for city employees could help address the issue.

Sacramento resident Mack Worthy attended the meeting, and was not impressed by the auditor’s recommendation. 

“If you’re going to teach a professional how to use a charge card, you’ve got a problem,” he said.

The initial investigation began this summer, when credit transactions made by Lisa Serna-Mayorga, a Sacramento City Council operations manager and daughter of former Mayor Joe Serna Jr., showed detailed receipts for gasoline, lunches and even a trip to Disneyland.

A citywide audit was then ordered after Serna-Mayorga was found to have charged roughly $25,000 on her employee credit card. Additional expenses for pizza, flowers, office supplies and coffee were prominent purchases among many of the Sacramento City Council members and their employees. Serna-Mayorga has since resigned and has sought legal representation.

According to the report, cardholders charged the most on grocery stores and hotels. Other purchases included flight and travel expenses and upgrades, payment of fines and fees for traffic violations, alcohol and ammunition.

Oseguera and his team suggested 14 solutions to these financial inconsistencies, including a proposal to seek a monthly purchase approval by the city manager as a way to save on costs.

“I don’t want to speak for the city manager (John F. Shirey),” said City Councilman Kevin McCarty, “but I know that you and your committee have worked hard to flush out some of the details.”

The complete findings of the city auditor’s investigation can be found here:  

The city of Sacramento's audit of credit cards use by city employees