Hybla Valley Elementary School Procurement Card Audit

Nhmoy

Description

Hybla Valley Elementary School Procurement (Credit) Card Audit May 2008 “promoting an efficient & effective school division” Executive Summary Our review of Hybla Valley Elementary School’s 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 the Regulation 5350.2, Finance Office Procurement (credit) Card Management for Appropriate Funds (effective 06-16-03). Areas where controls could be strengthened are: • Procurement (credit) card transactions should be documented on a procurement card log • Purchase orders should be completed, submitted and approved for all purchases; and receipts should be on file to support all card transaction. When receipts cannot be obtained, an explanation should be documented. • An Employee Disclosure Form should be on file for all card users • Bank reconciliations/negative reports should be completed monthly and the program manager should sign and date each reconciliation to evidence a timely review process Prior to the completion of the audit, there was turnover in the position responsible for managing the school’s procurement cards. All issues noted in the audit have been addressed and corrected by the new administrative assistant. Therefore, no further follow up of audit issues will be ...

Informations

• Publié par: Arze
• Nombre de lectures: 32
• Langue: English

Extrait

Hybla Valley Elementary School

Procurement (Credit) Card Audit

May 2008

“promoting an efficient & effective school division”

Hybla Valley Elementary School

Procurement (Credit) Card Audit

1

Executive Summary

Our review of Hybla Valley Elementary School’s 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 the Regulation 5350.2,

Finance Office Procurement (credit) Card Management for Appropriate Funds (effective 06-

16-03).

Areas where controls could be strengthened are:

•

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

log

•

Purchase orders should be completed, submitted and approved for all purchases; and

receipts should be on file to support all card transaction.

When receipts cannot be

obtained, an explanation should be documented.

•

An Employee Disclosure Form should be on file for all card users

•

Bank reconciliations/negative reports should be completed monthly and the program

manager should sign and date each reconciliation to evidence a timely review process

Prior to the completion of the audit, there was turnover in the position responsible for

managing the school’s procurement cards.

All issues noted in the audit have been

addressed and corrected by the new administrative assistant.

Therefore, no further follow

up of audit issues will be required.

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:

Hybla Valley Elementary School

Procurement (Credit) Card Audit

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•

Procurement cards were being used in accordance with regulation 5350.2

•

Adequate control procedures have been implemented and were being followed

•

Monthly reconciliations were being performed and submitted in accordance with

regulations

For the period under review, Hybla Valley Elementary School managed 4 credit cards that

were used for 84 appropriated fund expenditures.

A total of 50 randomly selected

transactions were reviewed during the audit.

The sample represented 49.7% 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 card log not being maintained

A procurement (credit) card log was not being maintained.

A purchase order (PO) log

was implemented in August 2007.

Of the 50 transactions reviewed 43 were not logged.

Additionally, 9 of the 43 occurred after the implementation of the PO log and 2 of these

9 were not logged.

Regulation 5350.2 IV indicates the program manager shall maintain

a procurement card log that records each procurement card purchase.

Recommendation:

Hybla Valley

Elementary School should record all transactions,

both debit and credit, on a procurement (credit) card log, as they occur, to accurately

reflect all procurement card transactions and provide up-to-date information on funds

expended.

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 the transaction posted.

If, however, the PO log is modified to

Hybla Valley Elementary School

Procurement (Credit) Card Audit

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include the required procurement (credit) card log information, then it may used as an

alternative, and will thus serve as a monitoring tool for both PO and credit card

purchases.

Management Response:

Credit card log was implemented in February 2008.

Note:

The Office of Internal Audit has verified the implementation of the credit card

log.

Further follow up is not required for this item.

2. Lack of supporting documentation

Purchase orders were not on file for 41 of the 50 transactions reviewed.

In addition,

receipts were not on file for 2 of the 41.

Regulation 5350.2 indicates that original

charge tickets, receipts, invoices, and other supporting documentation should be

maintained on file at the school or office.

Recommendation:

Hybla Valley Elementary School should have a purchase order on

file for each transaction and maintain receipts, invoices, and online documentation to

support all purchases.

If original documentation is not available, a written explanation

should be on file.

Management Response:

A purchase order log is currently being used for all

purchases.

Note:

The Office of Internal Audit has verified the implementation of the purchase

order log.

Further follow up is not required for this item.

3. Employee Acknowledgement Disclosure forms not on file for card users

Employee Acknowledgement Disclosure forms were not on file for card users.

In

accordance with Regulation 5350.2, each employee must read and sign the

procurement card employee acknowledgement disclosure form before using the

procurement card for the first time.

Recommendation:

All card users should read and sign the employee

acknowledgement form and forms should be maintained on file at the school.

Management Response:

All card users have read and signed the

acknowledgement forms.

Note

:

The Office of Internal Audit has verified the completion of the

acknowledgement forms.

Further follow up is not required for this item.

4. Bank Reconciliation

Bank reconciliations were not being properly completed.

A total of 15 reconciliations or

negative reports should have been on file for the 3 month period being reviewed;

however, only 3 reconciliations could be provided.

Of the 3 reconciliations provided, 2

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Procurement (Credit) Card Audit

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were not dated, therefore, there was no evidence to support a timely process.

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.

Recommendation:

Hybla Valley Elementary School should perform reconciliations

and/or negative reports in accordance with Regulation 5350.2.

In addition, the program

manager should sign and date each reconciliation to evidence a timely review process.

Management Response:

Bank reconciliations and/or negative reports are being

completed in accordance with Regulation 5350.2.

Note:

The Office of Internal Audit verified the implementation of this process.

Further follow up is not required for this item.