Langley High School Procurement Card Audit

Nhmoy

Informations

• Publié par: Erkyo
• Nombre de lectures: 25
• Langue: English

Extrait

Langley High School
Procurement (Credit) Card Audit

May 2008

“promoting an efficient & effective school division”
Executive Summary

Our review of Langley High School’s procurement (credit) cards revealed that the overall
control environment appeared adequate. In general, expenditures appeared reasonable,
properly approved, and supported by appropriate documentation. In addition, the
procurement (credit) cards appear to be in compliance with Regulation 5350.2 Finance
Office Procurement (credit) Card Management for Appropriated Funds (effective 06-16-03).
Areas where controls could be strengthened are:

• Supplemental student materials should be properly approved
• Reconciliations should be signed and dated
• Paid invoices should be cancelled by stamping or writing “paid” to prevent duplicate
payment
• Inactive cards should be closed to limit the risk of impropriety

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 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 November 1, 2006 through October 31, 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

For the period under review, Langley High School managed 3 credit cards that were used
for 51 appropriated fund expenditures. A total of 31 transactions were reviewed during the
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Procurement (Credit) Card Audit 1
audit. The sample included 25 randomly selected and 6 judgmentally selected transactions
which represented 60% 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

While supplemental classroom materials were obtained to ensure that students had the
most recent grammar rules available for use, the materials were not submitted for
review. Therefore, the supplemental materials were not approved through the foreign
languages office in accordance with Regulation 3005.5, Program and Supplemental
Instructional Print Materials Identification, Evaluation, and Approval, and Regulation
3007.1, Program and Supplemental Instructional Electronic Media Identification,
Evaluation, and Approval.

Recommendation: Langley High School should utilize appropriate procurement
methods in accordance with FCPS regulations to include the proper approval of student
materials.

Management Response: Everyone that signs off on purchase orders has been
advised that we must make sure that all materials are on the approved list. The
materials that are on this PO have been approved, after the fact, and are now on the
list of approved materials.

Note: The Office of Internal Audit has verified that all materials have subsequently
been approved. Further follow up is not required for this item.

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Procurement (Credit) Card Audit 2
2. Bank Reconciliations

While bank reconciliations were being completed, there was no evidence of timely
completion as 6 of the 9 reconciliations/negative reports were not dated. In addition, 1
of the 6 was not signed by the program manager. Regulation 5350.2 states that bank
statements should be reconciled monthly and the program manager should sign and
date the statement to evidence approval of all transactions. In addition, if no charges
were made against the procurement card for a billing period, a negative report shall be
completed in the same manner.

Recommendation: Langley High School should ensure that monthly
reconciliations/negative reports are signed and dated by the program manager in
accordance with Regulation 5350.2.

Note: Prior to the conclusion of the audit, Internal Audit noted the implementation of
signing and dating reconciliations. Therefore, a response was not requested and further
follow up is not deemed necessary.

Management Response: Response not required for this issue.

3. Duplicate Payment

A vendor invoice in the amount of $21,118.50 was paid on September 13, 2007 by
credit card; however, the invoice was not cancelled. The invoice was paid again on
October 4, 2007 by check. Langley High School became aware of the error when
the vendor issued a credit to the credit card.

Recommendation: Langley High School should cancel invoices upon payment by
stamping or writing “paid” on the invoice to prevent duplicate payments.

Management Response: This process has been put into place effective March
2008.

Note: The Office of Internal Audit noted implementation of this process. Further
follow up is not required for this item.

4. Inactive Procurement Card

The “Langley High School Business” card had no activity during the audit period,
November 1, 2006 to October 31, 2007. Subsequently, we have verified that there
has been no activity as of February 6, 2008.

Recommendation: We recommend that the Langley High School Business card be
closed as inactivity exceeding a year makes the need for the card questionable.

Note: The credit card was closed on February 14, 2008. Therefore, a response was
not requested and further follow up is not deemed necessary.

Management Response: Response not required for this issue.
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