Audit Finds Weak Controls in City Gift Card Spending, $98,000 Reviewed
City auditor reviewed $98,000 in gift card spending from Jan 26–Aug 25, 2025; 38% lacked recipient info and many recognition cards exceeded the $25 limit.
The City Auditor’s Office found significant gaps in the city’s gift card spending after reviewing $98,000 in purchases made between Jan. 26 and Aug. 25, 2025 as part of its Employee Expenses Continuous Auditing Project. The audit found 38 per cent of gift card transactions did not identify a recipient, and more than half of cards used for employee recognition exceeded the city’s $25 guideline by an average of four times. The findings put city gift card spending under scrutiny and prompted calls for stronger record-keeping and enforcement.
Audit traced $98,000 in gift card purchases from Jan. 26 to Aug. 25, 2025
The audit sampled gift card transactions recorded across departments during the eight-month review window. Totalling $98,000, the purchases were analyzed for documentation, purpose, and compliance with the city’s existing recognition policy. The Auditor’s Office used the Employee Expenses Continuous Auditing Project to identify patterns and compliance failures.
The review focused on whether purchases included recipient names, approval records, and adherence to the $25 recognition cap. Auditors flagged transactions lacking clear supporting details and tracked how frequently the guidelines were exceeded. This scope was intended to test the strength of routine controls around discretionary employee recognition spending.
38 per cent of transactions omitted recipient information
A key finding was that more than one-third of the gift card transactions did not identify who received the card. Without recipient names or sufficient justification, the city cannot confirm the cards were used for legitimate recognition or municipal business. The absence of this basic documentation undermines the audit trail that is fundamental to public accountability.
Missing recipient information also complicates any subsequent investigation into improper use or duplication of gifts. Auditors noted that poor documentation increases the risk that cards could be distributed informally or without managerial approval. The report emphasizes that routine record-keeping failures make preventive controls ineffective.
Recognition cards frequently breached the $25 guideline by an average of four times
More than half of gift cards labelled as employee recognition exceeded the city’s stated $25 limit, and the audit calculated the average overage at roughly four times that amount. That suggests typical recognition awards often approached or exceeded $100. These departures from policy were widespread enough to be statistically significant across the sample period.
The trend of higher-value awards raises questions about how the $25 cap is communicated and enforced within departments. It also suggests a mismatch between written policy and actual practice that the Auditor’s Office flagged as needing remedy. The disparity between policy and practice formed a central concern in the audit’s assessment of fiscal stewardship.
Internal control and policy gaps were identified by the Auditor’s Office
Auditors pointed to weaknesses in authorization, tracking, and centralized oversight as contributors to the irregularities. The report noted that current procedures did not consistently require pre-approval, recipient documentation, or a central registry of issued gift cards. These gaps limit the city’s ability to reconcile spending against policy and identify anomalies in real time.
The audit described a fragmented administrative approach in which departments maintained inconsistent records and approval workflows. Where there is no standard electronic log or mandatory fields for recipient names, auditors found it difficult to validate transactions. The Auditor’s Office concluded that strengthening controls would reduce opportunities for misuse and improve transparency.
Potential fiscal and reputational risks for the city
The audit’s findings carry both budgetary and reputational implications for municipal management and public trust. Even though the overall amount—$98,000—represents a small fraction of total city expenditures, weak controls signal vulnerability to waste and misuse of public funds. Citizens and council members typically expect clear documentation and consistent enforcement for discretionary spending.
Reputational risk rises when internal policies appear to be ignored or inconsistently applied, especially in areas tied to employee recognition and morale. The Auditor’s Office noted that visible violations of modest caps can erode confidence in governance and make future discretionary spending more politically sensitive. Strengthening procedures could mitigate those risks and reassure stakeholders.
Auditor urged clearer rules, better tracking and consistent enforcement
The report called for clearer procedural guidance, mandatory documentation for recipient names, and mechanisms to enforce the $25 recognition limit. It recommended that departments adopt a centralized tracking system or mandatory fields in expense reporting to ensure every gift card is logged and tied to an approver. The Auditor’s Office also suggested periodic monitoring to catch non-compliance earlier.
Implementing those changes would allow the city to reconcile gift card inventories, prevent duplicate or unauthorized distributions, and provide an auditable trail for each award. The audit emphasized training for staff responsible for recognition programs and regular follow-up reviews under the continuous auditing framework. Officials were urged to report progress to council or the relevant oversight body.
The Auditor’s Office review of city gift card spending highlights how modest discretionary programs can expose broader control weaknesses when record-keeping and enforcement fall short. The findings set the stage for policy adjustments and closer oversight to ensure compliance, fiscal prudence, and public accountability.
