Kent Gardens Elementary School Procurement Card Audit

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Description

Kent Gardens Elementary School Procurement (Credit) Card Audit July 2008 “promoting an efficient & effective school division” Executive Summary Our review of Kent Gardens Elementary School 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: • Alternate procurement methods should be used or a limit increase requested when a purchase exceeds card limitations • Supplemental student materials should be properly approved • Procurement (credit) card transactions should be documented on a procurement card log with all required information • Purchase orders should be sequentially numbered 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 ...

Informations

• Publié par: Olle
• Nombre de lectures: 21
• Langue: English

Extrait

Kent Gardens Elementary School

Procurement (Credit) Card Audit

July 2008

“promoting an efficient & effective school division”

Kent Gardens Elementary School

Procurement (Credit) Card Audit

1

Executive Summary

Our review of Kent Gardens Elementary School 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:

•

Alternate procurement methods should be used or a limit increase requested when a

purchase exceeds card limitations

•

Supplemental student materials should be properly approved

•

Procurement (credit) card transactions should be documented on a procurement card

log with all required information

•

Purchase orders should be sequentially numbered

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, Accounts Payable 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 April 1, 2007 through March 31, 2008 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

Kent Gardens Elementary School

Procurement (Credit) Card Audit

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•

Monthly reconciliations are being performed and submitted in accordance with

regulations

For the period under review, Kent Gardens Elementary School managed 7 credit cards that

were used for 113 appropriated fund expenditures.

A total of 90 transactions were

reviewed during the period.

The sample included 87 randomly selected and 3 judgmentally

selected transactions which represented 83% 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.

Supplemental materials not properly approved

Kent Gardens Elementary School is a French immersion school and thus needed

supplemental classroom materials in French.

While the core texts had been approved,

the supplemental materials had not.

The Sprint materials (instructional and activity

pages used for reinforcement and enrichment) and the Mon Glossaire Mathematique

materials (a resource book equivalent to a math dictionary) had not been previously

approved for classroom use.

In accordance with regulation 3005.5, Instruction

Materials and Equipment–Program and Supplemental Instructional Print Materials

Identification, Evaluation, and Approval of these materials should have been reviewed

by a committee and subsequently approved by the principal prior to purchase.

Recommendation:

Kent Gardens Elementary should utilize appropriate procurement

methods in accordance with FCPS regulations to include the proper approval of

supplemental student materials.

Kent Gardens Elementary School

Procurement (Credit) Card Audit

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Management Response:

Kent Gardens took immediate action on supplemental

materials as we were in the ordering process for next year.

Committees were

formed and materials evaluated and sent to the Assistant Superintendent for

Instructional Services and the Foreign Language Department.

We received

notification back that the books had been approved.

Note:

The Office of Internal Audit has verified the subsequent approval of

supplemental materials.

Further follow up is not required for this item.

2. Transactions were split to avoid preset card limits

Two transactions were split into equal payments to fall below the preset single

transaction limits for the procurement cards being used.

On May 29, 2007, a purchase

totaling $1,104.50 was split into two equal payments of $552.25 and a second purchase

totaling $1,440.10 was split into two payments of $720.05 on August 24, 2007.

Procurement cards shall be used in accordance with established regulation.

Single

purchase limits are established when a FCPS procurement card account is created

using the form located in Regulation 5350.2, Appendix A.

Recommendation:

Kent Gardens Elementary School

should use proper purchasing

methods in accordance with FCPS regulations.

When card limits are insufficient to

allow for proper procurement of goods /services, a limit increase should be considered.

Management Response:

Our procurement card limit was not sufficient; purchases

were split into classes for ordering purposes.

To comply with appropriate

procurement methods an increase in our foreign language procurement card limits

were requested and granted.

Note:

The Office of Internal Audit has verified that card limits have been modified

and the appropriate process was followed.

No further follow-up is needed for this

issue

3. Procurement card log not consistently maintained

A procurement card log was not being consistently maintained.

Of the 90 transactions

reviewed, 24 were not properly logged.

In addition, for those transactions that were

listed on the log, dates and/or card user information was not consistently provided.

Recommendation:

Kent Gardens Elementary School should record all transactions;

both debit and credit, on the credit card log, as they occur, to accurately reflect card

transactions.

In accordance with Regulation 5350.2, the log should indicate the date

card was issued, vendor, item(s) purchased, amount, card user, signature of user, date

card returned and the date posted.

Kent Gardens Elementary School

Procurement (Credit) Card Audit

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Management Response:

An additional column has been added to the procurement

card log for items purchased and the posted column will be utilized on the log as well

as continuing our process of posting the FMR transaction date on the purchase

order.

The new log will be implemented beginning with all fiscal year 2009

transactions.

4. Purchase orders not properly numbered

While purchase orders were being utilized for all transactions, they were not properly

numbered.

In addition, multiple vendors were listed an individual purchase order.

In

accordance with Guidelines for Purchase Orders issued by Financial Services purchase

orders are to be sequentially numbered.

Recommendation:

Kent Gardens Elementary School should sequentially number

all purchase orders, regardless of the type, and an individual purchase order should

be prepared for each vendor.

Management Response:

The purchase order log has been updated to include a

column for credit card charges. All future procurement card purchases will have

purchase numbers assigned.

This process will be implemented beginning with all

fiscal year 2009 transactions.