Lodi Audit Reveals $9,000 in Potential Credit Card Fraud

A forensic accounting audit has revealed that employees of the City of Lodi generated nearly $9,000 in potentially fraudulent credit card transactions over a five-year period, according to reporting from the Lodi News-Sentinel.

The Lodi City Council is scheduled to receive a detailed forensic accounting audit report on April 15, 2026. The report, prepared by Hoslett Forensics, examines procurement card charges, the utility deposit account, and purchases made through an Amazon account.

Audit Findings and Expenditure Breakdown

The city’s accounts payable division conducted testing of CAL-Card transactions over five years, identifying potential policy violations totaling approximately $8,625.

The identified violations are categorized as follows:

• 50% of the transactions were for unapproved meals or meals that exceeded daily limits.
• 25% of the transactions were for personal or unapproved purchases.
• 25% of the transactions were for unapproved travel, flights, or seat upgrades.

City staff noted that the municipality processes approximately $2.25 million annually through CAL-Card transactions. According to staff, a significant portion of the identified fraudulent charges has already been reimbursed.

Hoslett Forensics performed additional testing on the accounts and did not find any further unauthorized or personal charges beyond those already identified by the accounts payable division.

Policy Changes and Internal Controls

In response to spending concerns, the city council adopted procedural changes in August to limit the use of CAL-Cards for travel-related expenses. These changes reduce staff reliance on credit cards for minor costs, including gasoline, food, and other small expenses.

Under the updated policy, the city now provides travel advances to employees to cover these minor purchases. However, credit card transactions remain mandatory for larger expenses, such as hotel rooms, airfare, and conference admissions.

This latest report from Hoslett Forensics follows an initial audit presentation conducted by Moss Adams LLP nine months prior to the current findings.