Municipal Audit Committee Meeting on July 22, 2026

The Municipal Audit Committee met on July 22, 2026, from 12:31 PM to 1:59 PM to discuss the 2024 Purchasing Card (P-Card) Audit Report and receive an update on the municipality's financial audits. The meeting focused on persistent compliance issues, the trade-off between efficiency and compliance, and the need for improved accountability and policy updates.

Public Comments & Testimony

• Shine (Dominicia Williams), President/CEO of Shiloh Community Housing expressed concerns about the procurement and RFP process, citing a lack of transparency and questioning why Shiloh has never been selected for funding in 23 years. She highlighted an instance where a bid amount nearly doubled without re-bidding and asked how the Consolidated Plan projects are selected without a clear RFP process.
• Jamie Lopez criticized the anti-camping ban ordinance, noting that only 6.2% of those contacted accepted services (72 out of 1,157 contacts, with 123 arrests and 962 voluntary complies). He asked about missing drone reports required by AO 2018-5 and a missing report from AO 2025-74S2, and questioned the use of drones purchased by the police department.

Discussion Items

• 2024 P-Card Audit Overview (Alden Thurn, Internal Auditor): The audit covered 2024 P-card transactions totaling over $20 million across 40,000 transactions. Eight findings were identified: disallowed purchases, excessive luxury items, fire department contract issues, seat upgrades, monetary contributions, excessive gratuity (over 15% policy), failure to use supply contracts, and split transactions (51 instances totaling $130,000). Thurn noted that seven of the eight findings are recurring annually, with the fire department issue likely a one-off.
• Administration Response (Bill Falsey, Administration): Falsey acknowledged the findings and emphasized that the municipality had updated the Disallowed Purchases Policy in January 2026 to allow director-approved purchases for items like balloons, microwaves, and logo wear. He argued that perfect compliance is impossible without sacrificing efficiency and that the P-card system provides a $361,000 rebate from JP Morgan in 2025. He reviewed flagged transactions, noting that many were justified (e.g., SWAT rain gear, Adobe stock for APD recruitment, gaming computers for the real-time crime center). He also noted that the P-card policy itself is still being updated.
• Committee Questions and Concerns:
  • Member Kirker expressed frustration that the same findings appear year after year and questioned the effectiveness of repeated training. He asked whether any P-cards had been suspended as a result of the audit (none were) and urged stronger enforcement, including requiring employees to pay back improper purchases.
  • Member Brawley distinguished between whether a purchase was appropriate and whether it followed the correct method. She asked about differences between the first and second halves of 2024 (different administrations) and noted that training and staffing were lacking during the transition.
  • Member Handelin asked about the approval process, clawbacks, and whether the policy applies to the assembly. Discussion revealed that assembly staff hold P-cards and are subject to the same rules, though the assembly is a co-equal branch.
  • Member Scout requested more specificity in audit responses and asked about the timeline for policy updates. She noted that the Disallowed Purchases Policy was updated in January 2026, but the P-card policy is still pending. She also asked whether approval requests for purchases above the limit are tracked and if denials correlate with split transactions.
  • Chair Baldon Day highlighted specific split transactions: legitimate ones (dumpster lids, seeds) and concerning ones (APD drone purchases: $37,000 in 12 transactions over 10 days in December 2024). She questioned whether the $5,000 transaction limit and 15% gratuity limit should be updated for inflation and modern norms. She also asked about criteria for suspending P-cards (no objective criteria; rarely done).
• ACFR and Single Audit Update (Ms. Mariner, Auditor): The 2023 single audit is nearly complete (draft due tomorrow). The 2024 single audit will begin after that. The 2025 ACFR is in planning, with testing expected to start mid-August 2026. The solid waste agreed-upon procedures report was submitted. Ms. Mariner will present the 2024 ACFR in September.

Key Outcomes

• No formal votes were taken. The committee extended the meeting by 15 minutes (from 1:34 PM to 1:50 PM, then to 1:55 PM) to accommodate discussion.
• The committee acknowledged the need to revisit the P-card transaction limit ($5,000 maximum) and the gratuity policy (15% limit) to reflect current economic conditions.
• Chair Baldon Day flagged the APD drone purchases as a potential intentional circumvention of rules and stated she would follow up with administration.
• The committee emphasized the need for stronger accountability, including suspending P-cards for repeated violations and requiring reimbursement for improper personal purchases.
• The administration committed to finalizing the updated P-card policy and enhancing training and reporting tools, including exploring AI-based flagging systems.
• The next meeting will include a deep dive into the 2024 ACFR, scheduled for September 2026.