Information Technology Procurement Card Audit

Nhmoy

Description

Information Technology Procurement (Credit) Card Audit May 2008 “promoting an efficient & effective school division” Executive Summary Our review of Information Technology (IT) procurement (credit) cards revealed that internal controls appeared adequate. In general, expenditures appeared reasonable, properly approved, and supported by appropriate documentation. In addition, the procurement (credit) cards appeared to be in compliance with Regulation 5350.2 Finance Office Procurement (credit) Card Management for Appropriate Funds (effective 06-16-03). Areas where controls could be strengthened are: • Credit card forms should be consistently completed • Card duties should be properly segregated All issues have been addressed and corrected by area management prior to the release of this report. Background The purpose of the Fairfax County Public Schools’ (FCPS) procurement (credit) card program is to provide an efficient, reliable method of procurement to acquire needed goods and services in a timely and efficient manner. While the use of a procurement card can simplify and expedite procurement, its use requires strict adherence to internal control procedures and a commitment to accompanying accounting procedures. In most cases, card use reduces staff procurement efforts and shortens delivery time; however, it increases the need for financial tracking and control efforts. The Office of Finance, Accounting Section, is ...

Informations

• Publié par: Cheyr
• Nombre de lectures: 49
• Langue: English

Extrait

Information Technology

Procurement (Credit) Card Audit

May 2008

“promoting an efficient & effective school division”

Information Technology

Procurement (Credit) Card Audit

1

Executive Summary

Our review of Information Technology (IT) procurement (credit) cards revealed that internal

controls appeared adequate.

In general, expenditures appeared reasonable, properly

approved, and supported by appropriate documentation.

In addition, the procurement

(credit) cards appeared to be in compliance with Regulation 5350.2 Finance Office

Procurement (credit) Card Management for Appropriate Funds (effective 06-16-03).

Areas

where controls could be strengthened are:

•

Credit card forms should be consistently completed

•

Card duties should be properly segregated

All issues have been addressed and corrected by area management prior to the release of

this report.

Background

The purpose of the Fairfax County Public Schools’ (FCPS) procurement (credit) card

program is to provide an efficient, reliable method of procurement to acquire needed goods

and services in a timely and efficient manner.

While the use of a procurement card can

simplify and expedite procurement, its use requires strict adherence to internal control

procedures and a commitment to accompanying accounting procedures.

In most cases,

card use reduces staff procurement efforts and shortens delivery time; however, it

increases the need for financial tracking and control efforts.

The Office of Finance, Accounting Section, is responsible for administering the

procurement card program.

These responsibilities include approval of card application,

assisting departments with dispute resolution, monitoring monthly reconciliations, and

reviewing and remitting payment for the consolidated bill.

Procedures governing the use of

procurement cards are provided by the card service vendor in conjunction with FCPS

Regulation 5350.2.

Scope and Objectives

This audit was performed as part of the fiscal year 2008 Annual Audit Plan. The audit

covered the period from October 1, 2006 through September 30, 2007 and was conducted

in accordance with generally accepted governmental auditing standards. Our audit

objectives were to determine that:

•

Procurement cards were being used in accordance with regulation 5350.2

•

Adequate control procedures have been implemented and are being followed

•

Monthly reconciliations are being performed and submitted in accordance with

regulations

Information Technology

Procurement (Credit) Card Audit

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For the period under review, Information Technology managed 21 credit cards that were

used for 1,105 appropriated fund expenditures.

A total of 180 transactions were reviewed

during the period.

The sample included 150 randomly selected and 30 judgmentally

selected transactions which represented 18% of the total card expenditures.

Methodology

Audit methodology included a review and analysis of internal control procedures over card

expenditures and related documentation.

Our audit approach included an examination of

expenditures, records maintained in the department, monthly reconciliations, interviews

with appropriate employees, and a review of applicable regulations and procedures.

We

evaluated the processes for compliance with FCPS Regulation 5350.2

.

Information was

extracted from PathwayNet for sampling and verification to source documentation during

the audit; however, our audit did not include an independent review of system controls.

Our transaction testing did not rely on system controls; therefore, this was not a scope

limitation.

The FCPS Office of Internal Audit is free from organizational impairments to independence

in our reporting as defined by generally accepted government auditing standards.

We are

organizationally part of the Office of the Superintendent and report directly to the Audit

Committee.

Organizationally, we are outside the staff or line management function of the

units that we audit.

We report the results of our audits to the management of the

department under review, the appropriate leadership team member, the Superintendent,

and the Audit Committee, and reports are available to the public.

Findings, Recommendations, and Management Response

1. Procurement credit card form not properly completed

During the audit period, Information Technology used a department created credit card

form instead of a credit card log.

In addition to having all information related to the

transaction listed on the form, the form also had a space for approval.

Of the 180

transactions reviewed, 21 transactions had incomplete credit card forms.

Recommendation:

While the credit card form appeared to be an adequate control in

lieu of a credit card log, Information Technology should properly record all transaction

information, including evidence of approval, on the form for all transactions.

Management Response:

All locations are now using the form we created to document

credit card purchases.

They are logging them as well.

We are receiving copies of both

the form and log for out records on a weekly basis.

Note:

The Office of Internal Audit has verified the use of the log and credit card form.

Further follow up is not required for this item.

Information Technology

Procurement (Credit) Card Audit

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2.

Lack of separation of duties

There was a lack of separation of duties for one of the cards reviewed.

For this

card, one Individual was responsible for purchasing items, approving orders, and

reconciling the credit card statements. Generally accepted accounting principles

recommend the separation of duties in performing certain tasks such as the

collection of funds from the recording and reconciliation of the funds collected so that

no one person has control over all parts of a transaction..

Recommendation:

The task of reconciling the credit card statement should be

assigned to an individual for a detailed review separate from the individual

responsible for making or approving purchases made with the credit card.

Management Response:

We have implemented the practice that the individual

placing the order is not the person reconciling the credit card statement.

This was

true in our telephone accounts.

One individual will place the order and another will

reconcile.

Note:

The Office of Internal Audit have verified the separation of duties and no

further follow up is required for this item.