Council card spending: $6.8 million over three years

Card spending has increased significantly for the City of Ballarat.
Card spending has increased significantly for the City of Ballarat.

MONEY spent by City of Ballarat staff using purchase cards has more than tripled in the past three years.

An investigation into council spending by The Courier has uncovered nearly 40,000 transactions made by staff during the same period.

Between the 2010 and 2013 financial years a total of $6.8 million was spent, with the bill coming to $3.7 million in the most recent year.

Council puts the increase down to a new council policy, encouraging purchase card use by staff rather than making payments with direct debit or cheques.

However council could not say whether the increase in purchase card use had been matched by a significant reduction in the use of other payments.

And while the amount spent on purchase cards has leapt by 94 per cent, it was only matched by an increase in purchases of 13 per cent. 

City of Ballarat CEO Anthony Schink defended the spending hike, saying that it was in line with an increase in the council budget.

"Every purchase that an officer makes to their card should be related to the work that their doing," he said. 

"This system gives us the ability to audit that on a regular basis."

They show thousands of purchases made on everyday council items such as paint, fuel and concrete, as well as more expensive things like plane tickets, hospitality and iPads.

There are almost 200 City of Ballarat purchase cards from the National Australia Bank, which are used by staff who have the proper authorisation and comply with procurement policy.

Unlike credit cards, they do not rely on a line of credit or get charged interest however each card does come with a bank fee. 

City of Ballarat CFO Glenn Kallio said the move to purchase cards was cheaper, made fraud detection easier and was better for local businesses because they got paid quicker.

"It is the most efficient (system) for this council. Any other method is not as good."

He said the new system was more efficient than the old method, meaning a reduced the number of staff required in the finance department that looks after procurement. 

"I would ultimately love to buy everything on the purchase card. As much as I can I want to go down that track," he said. 

When talking about the ability to detect fraud, Mr Kalio said all purchases had to be backed up by documentation including receipts and management to ensure proper auditing.

The system has already led to one staff member losing their job for buying personal goods on their purchase card and revealed information that led to a manager being fired.

"If you do something wrong you might get away with it for a month or two but eventually you will be caught," said Mr Kallio

Mr Kallio said the the number of purchases on the cards would likely be higher this year and again the year after as council sought to use them more often.

"It is the most efficient (system) for this council. Any other method is not as good."


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