An internal audit of cellphones provided to Chattanooga employees found the city does not have proper controls in place to manage costs and to ensure the phones are used properly.
From May 2010 to April 2011, the city spent thousands of dollars on phones assigned to former employees and nonemployees, phones that were not used and phones designated as "extra" or "spare," the audit revealed.
During that time, the city also paid nearly $27,000 in voice, data and text overage charges, the audit said.
As of April 2011, the city was providing 587 cellphones to employees. The city paid $329,693 in cellphone expenses in fiscal year 2011, according to the audit.
City Councilwoman Deborah Scott -- who is chairwoman of the Personnel, Performance and Audit Review Committee -- said she expects the cellphone issues will be handled in a timely manner and will not require additional action by the City Council.
"I think this problem is going to self-correct," Scott said before Tuesday night's council meeting.
The city already is trying to remedy the problems identified during the audit.
The report noted that administrators were notified about phones assigned to former employers and many of those were deactivated.
The report also made a number of recommendations on how to fix the cellphone problems, including department heads periodically reviewing their cell-phone rosters, revising the city's cellphone policy and working out new billing arrangements with vendors.
It also encouraged city administration to consider implementing a stipend program in which employees would receive taxable payments to cover their cellphone use for business rather than receiving phones from the city.