purchasing card audit using computer-assisted udit … · 2019. 11. 20. · n page 6. ty executiv...

American Institute of Certified Public Accountants Award to Dr. Peter Hughes as 2010 Outstanding CPA of the Year for Local Government

GRC (Government, Risk & Compliance) Group 2010 Award to IAD as MVP in Risk Management

2009 Association of Certified Fraud Examiners’ Hubbard Award to Dr. Peter Hughes for the Most Outstanding Article of the Year – Ethics Pays

2008 Association of Local Government Auditors’ Bronze Website Award

2005 Institute of Internal Auditors’ Award to IAD for Recognition of Commitment to Professional Excellence, Quality, and Outreach

17,303

RISK BASED AUDITING GAO & IIA Peer Review Compliant – 2001, 2004, 2007, 2010

Inte

rnal

Aud

it D

epar

tmen

t PURCHASING CARD AUDIT

USING COMPUTER-ASSISTED AUDIT TECHNIQUES

(CAATS):

COUNTY EXECUTIVE OFFICE /COUNTY PROCUREMENT OFFICE

(Cited as a Best Practice by the Institute of Internal Auditors)

For the Year Ended:December 31, 2012

AUDIT NO: 1239REPORT DATE: NOVEMBER 26, 2013

Director: Dr. Peter Hughes, MBA, CPA, CIA

Senior Audit Manager: Michael Goodwin, CPA, CIA IT Audit Manager: Wilson Crider, CPA, CISA* Audit Manager: Carol Swe, CPA, CIA, CISA*

(*Certified Information System Auditor)

Purchasing Cards: We analyzed 260 open purchasing card accounts with 21,247 purchasing card transactions for the year ended December 31, 2012, amounting to about $7.5 million in the areas of card management, merchant management, transaction analysis, and segregation of duties. Our CAAT routines generated exceptions resulting in three (3) Control Findings that required further research by the County Procurement Office (CPO) and County departments to determine if they were valid exceptions that could indicate non-compliance with Purchasing Card policy. The County Procurement Office immediately researched each of the findings and provided satisfactory explanations that upon review by Internal Audit appeared to address the auditor’s concerns for each of the items noted in this report.

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e have a ss and suggesS). Our Firstof all our Foted on our sasing Card

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ng for discuss

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dit of PurchDecember 31Assessment

ort is attached

structured astions made t Follow-Up ollow-Up Audstandard rouCAAT audit

at audit recomnt and higherhe first Followd and implemendations we

requests thsion.

up Audit Rere implemene will need to

it Status Reports during ed by our Foort to the BO

t Departmenigate difficult

ect of our audCustomer Sal report.

are listed on

Audit No. 1

SUB

i ction reporting dir

Hughe

Trans

hasing Cards1, 2012. Wet approved byd for your info

nd rigorousby the AudiAudit will bedit reports is

uting distributt on transact

mmendationsr risk issues.w-Up Audit remented. At te find still nat such ope

eport Form. ted. When w

o obtain the c

eport to the the prior m

llow-Up AudOS.

nt is availabt audit recomdit report or urvey of Au

the OC Inte

1239 No

TO: Mi Ro

FROM: Dr Int

BJECT: Pu Co

Co Off

rectly to the Orang

es, CP

mittal Le

s Using Coe performed ty the Audit Oormation.

s Follow-Upt Oversight Cegin at six mos provided totion list. Astions occurr

s will typicall Our Seconeport, by whthe request oot implemen

en issues ap

Your agencwe perform ocompleted do

BOS where month and tits. Accordin

ble to partnemmendationsrecommendadit Services.

rnal Auditor

ovember 26

chael B. Giaob Richardso

County Pro

. Peter Hughternal Audit D

urchasing Caomputer-Assounty Executffice

ge County Board

A

etter

mputer-Assisthis audit in aOversight Co

p Audit proCommittee (Aonths from tho the BOS a

s a follow-upring during

y be implemnd Follow-Uphich time all of the AOC, nted or mitigppear on the

cy should comour first Folloocument to fa

I detail any he implemengly, the res

er with your . Please feeations. Addi. You will rec

r’s Report o

, 2013

ancola, Counon, County Pocurement O

hes, CPA, DDepartment

ard Audit Ussisted Audit Ttive Office/C

of Supervisors.

sted Audit Taccordance wommittee and

ocess in reAOC) and thhe official relas well as t to this repocalendar ye

ented within p Audit will baudit recommwe are to br

gated after te agenda at

mplete this tow-Up Audit acilitate our r

material andntation statuults of this a

staff so thael free to calltionally, we wceive the sur

n page 6.

nty ExecutivPurchasing OOffice

Director

ing Techniques

County Procu

Techniques with our FY d the Board

esponse to he Board of ease of the to all those ort, we will ear 2013.

six months begin at six mendations ring to their the second t their next

template as six months

review.

d significant us of audit audit will be

at they can me should will request rvey shortly

e Officer Officer

(CAATs): urement

Tab

PurcComCounAudi For tDece

Trans

OC In

O

R

B

S Deta

1. C

2. M

3. T

4. S

ATTA

ATTAReco

ATTA

ble of C

chasing Camputer-Ass

nty Executit No. 1239

the Year Eember 31,

smittal Lett

nternal Aud

OBJECTIVES

RESULTS

BACKGROU

SCOPE

iled Results

Card Manage

Merchant Ma

Transaction

Segregation

ACHMENT A

ACHMENT Bommendatio

ACHMENT C

Conten

ards Audit sisted Auditive Office/

9

Ended: 2012

ter

ditor's Repo

S

UND

s, Findings,

ement (Obje

anagement

Analysis (O

of Duties (

A: Report I

B: Descriptons

C: County

nts

Using it techniqu/County Pr

ort

, Recomme

ective #1)

(Objective

Objective #3

Objective #

tem Classif

tion of Purc

Procureme

ues (CAATSrocuremen

ndations an

#2)

3)

#4)

fications

chase Card

nt Office Ma

TS): nt Office

nd Managem

CAATs, Re

anagement

ment Respo

esults and

Response

onses

1

1

1

1

i

1

2

5

6

7

8

9

1

2

3

5

Au

WeopeacctranyeaDeam$7.aremamematrananddut We(3) for thewithdepregcarprorestrantranpotcomCo

PurchasCounty Audit N

OC

dit Highlight

e analyzed 26en purchase ccounts with 21nsactions for ar ended cember 31, 2

mounting to ab.5 million in theas of card anagement, erchant anagement, nsaction anald segregationties.

e identified thControl FindCPO to resea

e reported findh agencies anpartments garding purchrd policies andocedures, mestrictions, dupnsactions, annsactions tentially not inmpliance withunty policy.

sing Card Audit UExecutive Office/

No. 1239

C Intern

t

60 card 1,247 the

2012, bout he

ysis, n of

ree dings arch dings nd

asing d rchant

plicate d

n h

Using Computer-A/County Procurem

nal Au

Audit No. TO:

FROM:

SUBJECT

OBJECTIV

In accordaby the AudDepartmenaudit testsComputer-audit was ProfessionAuditors. and vendo 1. Card M

to iden Pu Pu Pu Mu Pu

pol

2. Merch Pu Pu

3. Transa Tra Tra Tra Du Du Tra

4. Segreg Se

Ap

Assisted Audit Tecment Office

ditor’s

1239

Michael BRob Rich Coun

Dr. PeterInternal A

T: PurchasiTechniquProcurem

VES

nce with ourdit Oversightnt conducteds of Purcha-Assisted Au

conducted nal Practice oOur objectiver payments i

Managementntify: rchasing Carrchasing Carrchasing Car

ultiple Purcharchasing Calicy amounts

ant Managerchasing Carrchasing Car

action Analyansactions exansactions exansactions spplicate Purchplicate trans

ansactions oc

gation of Dugregation ofproving Offic

chniques (CAATs)

s Repo

B. Giancola,hardson, County Procurem

r Hughes, CPAudit Depart

ng Card Audues (CAATs)ment Office

r FY 2012-20t Committee an audit of asing Card udit Techniquin conformaof Internal Aes were to an the followin

t: Reviewed

rds not matcrds assignedrds with no aasing Cards aards with sing

ement: Revierds without Mrd activity inv

ysis: Reviewxceeding sinxceeding creplit to circumhasing Card actions with ccurring on w

uties: Reviewf duties concials

):

ort

County Exeunty Purcha

ment Office

PA, Directortment

dit Using Co): County Ex

013 Audit Plaand Board

Purchasing Caccounts a

ues (known nce with the

Auditing presanalyze Purcng areas:

d Purchasing

hing employed to employeeactivity for onassigned to egle purchase

ewed PurchaMerchant restvolving restric

wed Purchasgle purchase

edit limits vent Purchastransactionsaccounts pa

weekends

wed Purchasnflicts betwe

N

ecutive Officsing Officer

r

omputer-Assxecutive Off

an and Risk Aof SupervisoCards. We pand transacby the acro

e Internationcribed by thhasing Card

Card accou

ee’s payroll nes not in “Acte year employees e limits or cr

asing Card actrictions cted Mercha

ing Card acte limits

sing Card lim yable

sing Card traen Purchas

ovember 26

cer

isted Audit fice/County

Assessment aors, the Interperformed a ction activityonym CAATnal Standarde Institute o data, emplo

nt and emplo

name tive” status

redit limits e

ccounts to id

nt categories

ivity to identi

mits

ansactions to ing Cardhold

Page 1

6, 2013

approved rnal Audit variety of

y utilizing Ts). This

s for the of Internal oyee data

oyee data

exceeding

dentify:

s

fy:

identify: ders and


OC

RESU

OW WcaexU (Sth

OWD WTexm

OWD WPexre

OWna


No. 1239

C Intern

ULTS

Objective #1 We reviewed

We identified ard managexceptions an

Upon researc

See the Detahis report for

Objective #2 We reviewed December 31

We identified he County Pxisting polic

management

Objective #3 We reviewed December 31

We identified Purchasing Cxceptions anesearch, man

Objective #4 We reviewed ame. No find


nal Au

– Card Manall 260 open

one (1) Conement. The nd examined h, managem

ailed Results,the County P

– Merchant 21,247 pur

, 2012, to ide

one (1) ConProcurement y and practhas satisfact

– Transactio21,247 pur

, 2012.

one (1) ConCard policy. nd examinednagement ha

– SegregatiPurchasing

dings were id


ditor’s

agement: n purchase c

ntrol FindingCounty Proexisting policent has satis

, Findings, RProcurement

Managemerchase cardentify transac

ntrol FindinOffice perfo

tices to detetory explanat

on Analysisrchase card

ntrol FindingThe County

d existing poas satisfactor

on of DutiesCard transa

dentified und

chniques (CAATs)

s Repo

card accoun

g regarding Pocurement Ocy and practisfactory expla

Recommendat Office’s resp

nt: d transactioctions with pr

g regarding rmed furtherermine if thtions for all e

s: d transactio

g regarding tProcuremen

olicy to detery explanatio

s: ctions havinger this area.

):

ort

nts as of Dec

Purchasing COffice perforices to deteranations for a

ations and Mponses)

ons totalingrohibited mer

merchant mr research onhese are vaexceptions we

ons totaling

transactions nt Office perfermine if thens for all exc

g the same

cember 31, 2

Card policies rmed furthermine if theseall exception

Management R

$7,496,782rchant catego

management n these excelid exceptione noted.

$7,496,782

potentially nrformed furthese are valiceptions we n

account nam

012.

and procedur research oe are valid exs we noted.

Responses s

2 for the yeaories.

of Purchasineptions and ens. Upon

2 for the yea

not in compliaer research d exceptionsnoted.

me and final

Page 2

ures over on these xceptions.

section of

ar ended

ng Cards. examined research,

ar ended

ance with on these s. Upon

approver


OC

The fdiscusectioAttac

FindiNo

1.a

1.b

1.c

1.d

1.e


No. 1239

C Intern

following tabssion in theon of this rehment B for

ing o.

FClas

(see Ata Contro

No.1

b

c

d

e


nal Au

ble summarie Detailed Report. See Aa detailed de

Sum

Finding ssification ttachment A

ol Finding


ditor’s

zes our findResults, FindAttachment escription of P

mmary of Fin

A)

FinPage

RUnmatchIAD identaccountscardholdematch thepayroll na(pgs. 7-8

Non-ActivIAD ident(13) accoemployeethan “Act

No Card Aidentifiedaccountsfor a year(pgs. 7-8

Multiple PCards – Iten (10) iwere issuopen Puraccounts

Account ESingle PuIAD identtravel carwhere sinlimit excelimit amo

chniques (CAATs)

s Repo

dings and redings, RecoA for a desPurchasing C

ndings and

nding and No. in AuditReport ed Accountstified five (5) where the er name did e employee ame. ).

ve Employeetified thirteenounts with thee’s status othive.” (pgs. 7-

Activity – IAD thirty-two (3 with no activr. ).

Purchasing AD identifiedndividuals thued multiple rchasing Card (pgs. 7-8).

Exceeding urchase Limittified one (1) rd account ngle purchaseeded the pount (pgs. 7-8

):

ort

ecommendatommendationscription of RCards CAATs

Recommen

t Reco

s –

not

CPO spoliciesprocedthe caremployin the PCard a

es – n e her -8).

CPO sand upcard ponecessissuanPurchaemploystatus “Activetime, sworkin

D 32) vity

CPO sand upand pronecessaccounactivityspecifietime.

d at

d

CPO sand upand pronecessissuancards tindivid

t –

e licy

8).

CPO sand upand pronecesssingle limits.

tions for thisns and ManReport Item s, results and

ndations

ommendatio

should updates and

dures to inclurdholder’s yee ID numbPurchasing

account data.

should researpdate purchaolicy as sary regardince of

asing Cards tyees with a other than

e” (i.e., part-summer, g retiree, etc

should researpdate policiesocedures as sary to deletents with no y over a ed period of

should researpdate policiesocedures as sary to addrece of multipleto one ual.

should researpdate policiesocedures as sary to addrepurchase

s audit. Senagement Re

Classificatiod recommend

on Mana

Resp

e

ude

ber

.

Cresearc

satisfexplai

exceptupdaPurcCard

rch se

ng

to

c.).

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rch s

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ess

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Page 3

ee further esponses

ons. See dations.

agement ponse

CPO ched and factorily ined the tions and

ated the chasing policy.

CPO ched and factorily ined the ions, and


CPO ched and




CPO ched and factorily ined the tion, and



OC

FindiNo

1.f

2.a

2.b,

3.a

3.b

3.c


No. 1239

C Intern

ing o.

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(see Atf

a ControNo. 2

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a ControNo.3

b

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nal Au


ol Finding

ol Finding


ditor’s

A)

FinPage

RAccount ECredit LimIAD identaccountscards) whlimit excelimit amo

AccountsMerchantIAD identaccountsName” windicatingrestriction

Activity wMerchantCodes /BMerchantidentifiedtransactiomatched merchantword (pgsTransactiSingle Pu– IAD ideinstance transactioexceededsingle pu(pgs. 9-1TransactiMonthly P– IAD idetwo (72) iwhere thetransactioaccount eaccount’s(pgs. 9-1Potential Transactiidentifiedinstancestransactiopotentiallcircumvelimits (pg

chniques (CAATs)

s Repo

nding and No. in AuditReport Exceeding mit - tified five (5) (mainly travhere the credeeded the pount (pgs. 7-8

s with No t Restrictionstified 154 where “Conas blank

g no merchanns. (pgs. 8-9)

with Blocked t Category

Blocked t Names – IA 43 ons that a prohibited t category kes.8-9). ions Exceediurchase Limitentified one (1where the on amount d the accounrchase limit 1). ions ExceediPurchase Limentified seveninstances e monthly on total for thexceeded thes credit limit 1). Splitting of

ions – IAD nine (9) s where the ons were y split to nt the card s. 9-11).

):

ort

t Reco

el dit licy

8)

CPO sreporteand upnecesstravel climits.

s –

trol

nt ).

CPO swith issmerchaare in ecards a

AD

ey

CPO sthe trathe appdepartdetermthe train compolicy.

ing ts 1)

t’s

CPO sthe tradetermthe sinlimit cooperatdesign

ing mits nty-

he e

CPO sthe accbank towhethelimit cooperatdesign

CPO sthe trathe appdepartdetermthe train compolicy.

ommendatio

should researed exceptionspdate policy asary to addrecard credit

should verify suing bank thant restrictioneffect when are issued.

should researnsactions witplicable ments to

mine whether nsactions wepliance with

should researnsaction to

mine whether gle purchase

ontrols are ing as ed.

should researcounts with to determine er the credit ontrols are ing as ed.


mine whether nsactions wepliance with

on Mana

Resp

rch s as ess

Cresearc

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po

hat ns

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ere

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e

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Page 4

agement ponse


ated the chasing Travel

olicy. CPO ched and that U.S.

k places rchant ctions on ssued ards. CPO ched and factorily ved the

eptions.

CPO ched and factorily ined the eption.

CPO ched and rmined were not tions due iming

sues.

CPO ched and factorily ined the

eptions.


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FindiNo

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No. 1239

C Intern

ing o.

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(see Atd

e

KGROUND nuous auditi

raditional audally test but ed to large rietary, best p

n there is artment level. ting exceptio

ending on theptions and urement Off

or clarifying e

use of limited for Calendae, it is impoptions. The ing of Purchation of possib

a follow-up sactions occ

s report, weify specific cunts so they


nal Au


ng using CAdits in that CA

a sample amounts of

practice and

additional re Internal Au

ons are forwe departmenfindings notfice (CPO) f

existing Purch

d resources ar Year 201ortant that ICPO indica

asing Cards.bly performinto this rep

curring durin

e are keepincardholders. can conduct


ditor’s

A)

FinPage

RPotential Transactiidentifiedtransactiopotentialltransactio

Weekend– IAD idetransactiotransactioeither SaSunday.

AATs is a chaAATs can quof transactioelectronic d

industry reco

search needudit attempts

warded to thent’s review, tted in this for further rehasing Card

in the CPO,2 instead ofnternal Audted it does n Instead, we

ng monthly, qport, we wilng calendar

ng the detail CPO has

their researc

chniques (CAATs)

s Repo

nding and No. in AuditReport Duplicate

ions – IAD 1,282 ons which may be duplicatons (pgs. 9-1

d Transactionentified 1,063ons with a on dates on turday or (pgs. 9-11)

ange to the uery 100% ofons from thedata searchiognized softw

ded to validto validate a

e appropriatethe exceptio

report, we esearch, whipolicies and

we are issuf performing

dit partner wnot currentlye are reportinquarterly or ll conduct ayear 2013.

s of our excs been provch on the exc

):

ort

t Reco

ay te 1).

CPO sthe trathe appdepartdetermthe traduplicaCPO swith IAthe numexceptdollar t

ns 3

CPO stransacapplicadepartdetermusing PCards purchaapprop

traditional auf a data univee populationing for specware product

date exceptiand resolvee departmenons may or

forwarded ich involvesprocedures.

uing an audit on-going m

with the CPOy have the reng the resultannual Purcanother Pu

ceptions to avided with thceptions.

ommendatio


mine whether nsactions areates. First, should work AD to reduce mber of tions (e.g., threshold). should researctions with thable ments to

mine whether Purchasing for weekend

ases is priate.

udit approacherse whereas. CAATs are

cified charact (ACL) to he

ions that is exceptions;

nt for validatimay not bethe excepticontacting d

report that donthly CAATO to help reesources to ts for the onehasing Card rchasing Ca

a general dihe specific d

on Mana

Resp

rch th

e

Cresearcdeterm

methodelim

certairecu

purchapurchathan $

this r

rch he

Cresearcdeterm

mosttrans

occurrethe wo

h. CAATs ds the traditione automated

cteristics. Wlp us in this p

only knowhowever, moion and/or ree a finding.ions to the departments/

details our exT routines. esearch andhelp supporte-year periodCAATs in th

ard CAAT a

iscussion andetails of ca

Page 5

agement ponse

CPO ched and mined a dology to

minate in valid, urring

ases, and ases less $1,000 in routine.

CPO ched and

mined that t of the actions ed during ork week.

differ from nal audits d queries

We use a process.

wn at the ost of the esolution. For the County

/agencies

xceptions As noted d resolve t monthly d with the he future. audit on

nd do not ardholder


OC

SCOPThis Dece 1. C

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2. MPcaca

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No. 1239

C Intern

PE report detailsmber 31, 20

Card ManageHuman Resou

Merchant MaPurchasing Categories. ategories:

Air phone, rganizations,overnment lolcoholic bevehecks, secunes, bail or b

ransaction ransactions eotentially spnd duplicate

Segregation uties conflict

nowledgmenppreciate the

e personnel d5475 or Mich

chments

bution Pursu

Members, BoaMembers, Aud

rank Kim, ChMark Denny, CMelva GipsonNina BadalamVictoria Ross,Paul Villanuev

oreperson, GSusan Novak,Macias Gini &


nal Au

s the CAAT 12. Our ana

ement: Weurces records

anagement: Cards without

The Purcha

direct mark, religious ooan paymenterages, wire rity brokers/

bond paymen

Analysis: exceeding silit to circumvtransactions

of Duties: ts between ca

nt e courtesy exduring our aael Goodwin

uant to Audit

ard of Supervdit Oversighthief FinanciaChief Operat, Manager, C

menti, Cal Ca, Director, Ceva, Senior MaGrand Jury , Clerk of the

& O’Connell L


ditor’s

work we pelysis included

e compared s.

We reviewet merchant reasing Card

keting insuraorganizationsts, automatedtransfer or m

/dealers, timnts, and capit

We revieingle purchavent Purchass to paid acco

We revieweardholders a

xtended to usudit. If we c

n, Senior Aud

Oversight Co

visors t Committeel Officer ting Officer County Procurd Administra

entral Accounanager, A-C/

e Board of SuLLP, County

chniques (CAATs)

s Repo

rformed on td a review of

all 260 ope

ed 21,247 Puestrictions apolicy iden

ance services, court costd referral ser

money orderseshares, betal/fixed asse

ewed 21,24ase limit, transing Card limounts payabl

ed purchasend final appr

s by the Coucan be of furdit Manager,

ommittee Pro

urement Officator, County nting Operati/Claims and

upervisors External Aud

):

ort

the Purchasif the followin

en Purchasin

urchasing Cand transactiotifies the fo

es, overpayts, alimony rvice, goods s, cash advantting, casinoets.”

7 purchasensactions exmits, duplicae invoices.

e card transarovers of Pur

unty Executivrther assistanat 834-6066.

ocedure No.

ce Procuremen

ions, AuditorDisbursing

ditor

ing Card datg data:

ng Card acc

ard transactioons involvingollowing as

ments, savior child supor services fnces, foreigno gaming ch

card transxceeding crete Purchasin

actions to idrchasing Card

ve Office andnce, please c.

1:

nt Office r-Controller

ta for the ye

counts with e

ons (100%) tg prohibited

prohibited

ings bonds,pport, tax pfrom blockedn currency orhips, off-track

sactions to edit limit, tranng Card tran

dentify segred transaction

d County Proccontact me d

Page 6

ear ended

employee

to identify merchant merchant

political payments, vendors,

r travelers k betting,

identify: nsactions

nsactions,

egation of ns.

curement directly at

DM


DetailedManage

1. C

W C

RCpo

C


No. 1239

d Resuement R

Card ManageWe reviewed

Control Findia. Unma

that dib. Non-A

statusc. No Cad. Multipe. Accou

limit ef. Accou

Count

RecommendaCPO researcholicies and p

a. Includb. Issuin

summc. Cardhd. Issuine. Estabf. Estab

County Exec

1a. Concura field wnew cadetermin

Thto

ThCa

1b. Concuprocedwill be followin

Sixan

FoSe

Ththa


lts, FinRespon

ement (ObjePurchasing C

ing No.1: tched Accouid not match

Active Emplos other than “Aard Activity: Tple P-Cards: Tunts Exceedixceeding Co

unts Exceedity policy.

ation No. 1: h and validat

procedures to

ing the cardhg Purchasing

mer, working rholder accoung multiple calishing Travelishing Trave

utive Office

r. Unmatchedwhere the Card. CPO rened:

hree (3) accoCPO’s notifi

he employmeardholders ar

ur. Non-Activures to stateissued P-Ca

ng was deter

x (6) P-cardnalysis and pour (4) Cardervices. hree (3) P-Caat participate


dings, nses

ctive #1) Card accoun

unts: Five (5the employe

oyees: ThirteActive.”

Thirty-two (32Ten (10) empng Single P

ounty policy. ing Credit L

te the aboveo address:

holder’s empg Cards to eretiree, etc.).nts with no trards (e.g. Purel Card singleel Card credit

/County Pro

d Accounts: Cardholder’s eesearched a

ounts were ccation of theent status wre current, ac

ve Employee only Countards. CPO rermined:

ds were closrior to CPO’sdholders we

ards belong es in the Cou

chniques (CAATs)

Recom

t and employ

) Purchasingee payroll nameen (13) acc

2) accounts hployees had urchase Lim

imit: Five (5

exceptions,

ployee ID numemployees w

ransactions orchasing Care purchase lit limits.

ocurement O

CPO will updemployee ID ll five (5) u

closed upon exceptions.

was verified fctive employ

ees: CPO wty employeesesearched th

sed prior to s notification ere verified

to OC Publicunty’s P-Card

):

mmenda

yee data ove

g Card accoume. counts were

had no activitmultiple ope

mit: One (1) a

5) accounts w

and update

mber in the Pith a status o

or activity overds and Travemits.

Office Manag

date the Reqnumber will

unmatched a

agency requ

for the remaees; therefor

will update s, elected ofhe thirteen (1

this audit uof the excepas active e

c Law Libraryd program.

ations a

er card mana

unts were as

e assigned t

ty on the carn Purchasingaccount with

with credit l

or establish

Purchasing Cother than “A

er a specifiedel Cards) to o

gement Res

quest for a Pbe mandato

accounts an

uest after IAD

aining two (2re they are e

Purchasingfficials and s13) non-activ

upon agencyptions. employees b

y (an indepe

and

gement and

ssigned to in

to employee

rds for a yearg Card accouh the single

imit in exces

Purchasing

Card account Active” (i.e., p

d period of timone individua

ponse:

P-Card form tory when reqd the follow

D’s analysis

2) Cardholdeligible Cardh

Card policselect speciave employees

y request af

by Human R

endent specia

Page 7

found:

ndividuals

es with a

r. unts. purchase

ss of the

Card

data. part-time,

me. al.

to include uesting a

wing was

and prior

ers. Both holders.

cies and al districts s and the

fter IAD’s

Resource

al district)

DM


DetailedManage

2. MW

C


No. 1239

d Resuement R

1c. Concurstate P-(32) card

Teaft

Twre

Ei Tw

criar

1d. Concurto addreindividuaproper p

1e. ConcurCard poaccountTravel Con their

1f. Concur.and procexceedi

Onwhlim

Thar

Merchant MaWe reviewed

Control Findia. Accou

“Contrcards.are es

b. Activit“Merc

c. ActivitName

d Activit“AllocaIAD re


lts, FinRespon

r. No Card A-Cards with nds with no ac

en (10) P-Cater IAD’s CAAwelve (12) Pmain open. ght (8) P-Ca

wo (2) cardsitical emergee documente

r. Multiple P-ess the issuaal. All ten (1procedures.

r. Accounts olicies and pt identified asCard. Currentravel needs

Accounts Ecedures to ang the P-Car

ne (1) card lihile the Travmit on this cahe remaininge set by each

anagement (Otransactions

ing No.2: unts with Norol Name” fi. This item rstablished whty with Blochant Categorty with Blocke” matched a ty with Bloation/Accounesearched th


dings, nses

Activity: CPOno activity foctivity and th

ards were clAT report.

P-Cards were

rds were closs have beenency situationed in CPO file

-Cards: CPOance of multip10) employee

Exceeding Sprocedures tos exceeding

ntly, Travel Cs.

Exceeding Crddress Traverd credit limit

imit was temvel Card prord has since

g four (4) carh agency bas

Objective #2to identify po

o Merchant eld was bla

requires resehen the cardscked Merchary Code Desed Merchantprohibited m

ocked Allocanting Code” mese transact

chniques (CAATs)

Recom

O will update r a year will e following w

osed prior to

e used to m

sed due to inn authorized ns. Supportines.

O will update ple cards (e.es who have

Single Purcho address Tthe P-Card

Card single p

redit Limit: Cel Card credit were valid a

porarily raisegram was trbeen lowere

rds are Travsed on their

2) otential activ

Restrictions:nk, indicatin

earch with thes are issued.

ant Categoryscription” matt Names: Tw

merchant key ation/Accounmatched a pions and det

):

mmenda

Purchasing be terminate

was determin

o this audit

make purchas

nactivity. to remain o

ng document

the Purchasg. Purchasin

e been issue

hase Limit: Travel Card s

single purchpurchase limi

CPO will updit limits. It waas follows:

ed to accommransitioned fed to the stanvel Cards. Ctravel needs

vity with prohi

: 154 Purchg that no me issuing ban

y Code: Sixttched a prohienty-seven (word.

nting Code:rohibited meermined they

ations a

Card policieed. CPO resed:

completion u

ses within th

open as theytation in supp

sing Card pong Cards anded multiple P

CPO will upsingle purchhase limit is vts are set by

date the Purcas determine

modate the Arom Diner’s ndard credit lCurrently, Tra.

ibited mercha

hasing Card merchant restnk to ensure

een (16) traibited mercha(27) transacti

Nine (9) erchant categy complied w

and

es and procesearched all

upon agency

he last year

y may be nport of these

licies and prd Travel Card-Cards have

pdate the Puase limits. valid as the y each agen

chasing Carded all five (5)

Agency’s travClub to P-Cimit.

avel Card cre

ant categorie

accounts wtrictions wermerchant re

ansactions want key wordions where “

transactiongory key worwith policy.)

Page 8

edures to thirty-two

y request

and thus

needed in requests

rocedures ds) to one e followed

urchasing The lone card is a cy based

d policies accounts

vel needs Card. The

edit limits

es.

where the re on the estrictions

where the d. Merchant

s where rd. (Note:

DM


DetailedManage

RCC

C

3. T

Wlima

C

RC


No. 1239

d Resuement R

RecommendaCPO should rCard policies

a. If mercb. If the a

County Exec

2a. ConcCard mercha highMCC on thepossibordereindivid

2b,c.ConcuresearDescr(16) trapprowherethat alall pur

ransaction AWe reviewed mits, transacnd duplicate

Control Findia. Transa

purchab. Transa

monthc. Split T

purchad. Duplic

and me. Duplic

researf. Weeke

RecommendaCPO should re

a,b. If credthe ba

c. If tranresear


lts, FinRespon

ation No. 2: research andand procedu

chant restrictabove transa

utive Office

ur. Accountsaccounts w

hant restrictioh risk Merchablocking con

e Managing Ability of humaed. This featudual cards ov

ur. Activity rched all sription” matchransactions wpriate busin

e “Merchant ll twenty-sevrchases were

Analysis (OPurchasing

ctions potenttransactions

ing No.3: actions Excease limit. actions Exce

hly transactioTransactionsase card limicate Transac

merchant namcate Paymenrch this transend Transac

ation No. 3: esearch the

dit limit contank that issuensactions werch this with


dings, nses

d validate th

ures to addre

tions are in eactions were

/County Pro

s with No Mehere the “C

ons are in effant Category trols are assAccount instean error occuure allows dever and beyo

with Blockesixteen (16)hed a prohibiwere valid aness use. CName” matcen (27) trans

e for appropr

bjective #3)Card activitytially split to s with accoun

eeding Single

eeding Monthons exceededs: Nine (9) ints. tions: 1,282

me). nts: One (1) psaction and dctions:1,063 t

above excep

rols are opees the Purchaere split to capplicable de

chniques (CAATs)

Recom

he above excss:

effect when cin complianc

ocurement O

erchant RestControl Namefect when caCode (MCC

signed to eveead of each urring by not epartments tnd those tha

ed Merchan) transactionited merchan

nd P-Card poPO also res

ched a prohibsactions werriate business

y to identify: circumvent

nts payable in

e Purchase L

hly Purchased the credit linstances tran

potential dup

potential dupdetermined it transactions

ptions, and u

rating as desasing Cards.ircumvent Pepartments/a

):

mmenda

ceptions, and

cards are issuce with Purch

Office Manag

trictions: CPe” field was rds are issue

C) blocking coery card, US Bindividual P-placing MCChe ability to s

at are set auto

nt Category ns where nt key word. olicy was not searched allbited merchae valid, and s use.

transactions purchase ca

nvoices.

Limit: One (1

e Limit: Sevemit. nsactions we

plicate transa

plicate transawas not a duwith transact

pdate policie

signed. CPO. urchasing Cagencies.

ations a

d update or

ued. hasing Card p

gement Res

O researcheblank. US

ed. US Bank ontrol to everBank has pla-Card. This fC blocking onset additionaomatically co

Code/Merchthe “Mercha It was deterviolated as al twenty-sevant key wordP-Card polic

exceeding sard limits, d

) transaction

enty-two (72)

ere potential

actions (same

action with acuplicate paymtion dates on

es and proced

O should res

ard policy li

and

establish Pu

policy.

ponse:

ed all 154 PuS Bank conf

automaticallry P-Card. Taced blockingfeature elimin cards whenal MCC restriountywide.

hant Namesant Categormined that aall purchasesven (27) trand. It was decy was not vi

single purchauplicate tran

n exceeded t

) instances w

ly split to ci

e date, dollar

ccounts payament). n Saturday or

dures to add

search this is

mits. CPO

Page 9

urchasing

urchasing firmed all ly applies

To ensure g controls nates the

n they are ictions on

s: CPO ry Code

all sixteen s were for nsactions etermined olated as

ase/credit nsactions,

the single

where the

rcumvent

r amount,

able (IAD

r Sunday.

ress:

ssue with

needs to

DM


DetailedManage

C


No. 1239

d Resuement R

d. If tran

adjustcondu

e. If transf. Use o

departweeke

County Exec

3a. Conctranspostehave and rtrans

3b. ConcseveninformBank of thematchreview

Niduduap

Onlasunlimmoprpu

Thpu

3c. Concucircumas $5,a $5,0CPO were v

3d. Concreport purchamemb$1,000


lts, FinRespon

sactions are t the numbeucted with thesactions are of Purchasitments to idends, and ad

utive Office

cur. Transaaction excee

ed the $6,32authorizatio

reimbursed tactions that

cur. Transacty-two (72) i

mation in this monthly cycl

e month, to th US Bank cywed by CPO

ne (9) monthue to tempouring the trapproval to havne (1) monthst day of thentil the followmit approval fonthly cycle ocesses pay

urchase. he remainingurchase limit

ur. Split Tranmvent P-Card,000; howeve000 transactiresearched avalid as no fix

cur. Duplicatwith a m

ases be elimbership organ0 be eliminat


dings, nses

duplicate puer of exceptie applicable dduplicate acng Card ondentify instandress use of

/County Pro

ctions Exceeding the sin22 transactioon to force phe full amouare force pos

tions Exceedinstances whfinding resue dates. USthe 22nd of tycle dates in using US Ba

hly transactiorary accommansition of tve their limits

hly transactio March 2012

wing cycle caufor both transwhen funds

yment; theref

g sixty-two (as it was con

nsactions: Sixd policy are der the P-Cardion limit allowall potential xed assets w

te Transactioanageable

minated from nizations, anted from the

chniques (CAATs)

Recom

urchases. CPions (e.g., ddepartments/counts payan non-work nces when f P-Cards on

ocurement O

eeding Singlngle purchasn circumven

post paymennt. Cardholdsted by the v

ding Monthlyhere monthlylted from IAD

S Bank monththe followingfuture CAAT

ank monthly c

on limits appmodations mthe Travel s raised abov

on limit was e2 monthly cyusing the mosactions waswere availa

fore the pos

(62) instancenfirmed the li

x (6) P-Cardsdisplayed on d program dowing Cardhosplit transac

were purchas

ons: In an enumber of the report; hnd publicatioreport.

):

mmenda

PO should wdollar thresh/agencies. ble payments

days/weekeemployees non-work da

Office Manag

le Purchasese limit. It wnting the $5,nts; thereforeders will alwa

vendor.

y Purchase y transactionD using monhly cycle dateg month. IAT routines. Alcycle dates a

pear as thoumade for theCard prograve the standaexceeded as cle, and theronthly transas provided byable. US Bating date ma

es did not trimits were no

s with transaa report whi

oes not haveolders to spetions. It was

sed and biddi

effort to gentransactions

hotels, conferons. CPO a

ations a

work with Inteold). Rese

s (IAD reseaends. CPOare using P

ays/weekend

gement Res

e Limit: Cwas determin000 credit li

e US Bank days automat

Limit: CPOns exceeded thly calenda

es approximaD will adjustll seventy-two

and the follow

gh they wereeir agency’s am, these Card $15,000 two purchas

refore, did noction limit to y US Bank d

ank cannot day not reflec

ruly reflect tot exceeded.

ctions that wich identifies e a daily limitnd more thas determineding limits wer

nerate a “Dus, CPO sugrences/eventalso suggest

and

ernal Audit toarch should

arched; not anO should wPurchasing Cds in the polic

ponse:

CPO researcned the venmit. Vendordetected theically win dis

O also reseathe credit li

r dates insteately run fromt its CAAT ro (72) instan

wing was dete

e exceeded; travel arran

Cardholders monthly limit

ses were madot post to thebe exceedeuring the Maictate when

ct the true da

the accurate

were potentiathe daily P-C

t. P-Cards aan $5,000 in d that all tranre not exceed

uplicate Tranggests the ts, airfare, rets transactio

Page 10

o possibly then be

n issue). work with Cards on cy.

ched the dor force rs do not violation

sputes for

arched all mit. The

ead of US m the 23rd routine to nces were ermined:

however ngements

received t. de on the e account d. Credit

arch 2012 a vendor

ate of the

e monthly

lly split to Card limit

are issued one day.

nsactions ded.

nsactions” following ntal cars, ns under

DM


DetailedManage

4. S

W

FWfin


No. 1239

d Resuement R

Many agein multiple 3e. Duplic 3f. Concu

makinsevenmany approxTransa

It wasSundavendoare shwere mby CPbusine

Segregation We reviewed

indings: We reviewedndings noted


lts, FinRespon

encies requiree purchases f

cate Paymen

ur. Weekendg purchases days a weeCounty em

ximately tweactions” repo

s determineday. They occor processes hipped; theremade by thePO were maess purchase

of Duties (Opurchase ca

purchase cd.


dings, nses

e the above lfor the same

ts: IAD resea

d Transactios on the wek is necessa

mployees relenty-five (25ort.

d most of thcurred duringpayment. A

efore the pos Cardholder.ade on a wes.

Objective #4)rd transactio

card transac

chniques (CAATs)

Recom

listed purcha vendor with

arched and re

ons: Currenteekend. The ary as some Cly on P-Car5) percent

he transactiog the work wAlso, most vesting date ma. Less than f

weekend; all

) ons to identify

ctions to ide

):

mmenda

ases be madethe same do

esolved this

t policy doeability for C

County facilitrds while trof the purc

ons did not eek; howeveendors do noay not accurfive (5) perce

of which w

y segregation

entify segreg

ations a

e separately,ollar amount

one (1) exce

es not prohibCardholders ties are openraveling. Cchases listed

actually occer US Bank cot charge acrately reflect ent of the trawere verified

n of duties co

gation of dut

and

, per person,on the same

eption.

bit Cardholdto use their

n on the weeCPO has red on the “W

cur on a Satcannot controccounts until the date trannsactions re

d as being l

onflicts.

ties conflicts

Page 11

resulting e day.

ders from P-Cards

kend and searched Weekend

turday or ol when a products

nsactions searched legitimate

s with no

DM


DetailedManage

ATTA

For pitems C

Aexad

SAdeco

C

Athcom


No. 1239

d Resuement R

ACHMENT A

purposes of rs into three di

Critical ContrAudit findingsxceptions to ddress Critic

Significant CAudit findingsesign or oporrective acti

Control FindiAudit findingshat require montrols. Con

months, but n


lts, FinRespon

A: Report I

reporting our istinct catego

rol Weakness or a comthe audit ob

cal Control W

Control Weak or a combin

peration of ions.

ings: concerning

managementntrol Findingo later than t


dings, nses

tem Classif

audit observories:

sses: bination of

bjective(s), pWeaknesses b

knesses: nation of Coninternal con

internal cont’s corrective

gs are expectwelve month

chniques (CAATs)

Recom

fications

vations and r

Significant Colicy and/or

brought to the

ntrol Findingtrols. Sign

trols, compliae action to imcted to be ahs.

):

mmenda

recommenda

Control Weabusiness goeir attention

s that represnificant Cont

ance issues,mplement or addressed wi

ations a

ations, we wi

aknesses thoals. Managimmediately.

sent a signifirol Weakne

or efficiencyenhance pr

ithin our follo

and

ill classify au

at represenement is exp.

cant deficiensses require

y/effectivenesrocesses andow-up proce

Page 12

udit report

t serious pected to

ncy in the e prompt

ss issues d internal ess of six

DM


DetailedManage

ATTA


No. 1239

d Resuement R

ACHMENT B


lts, FinRespon

B: Descript


dings, nses

tion of Purc

chniques (CAATs)

Recom

chase Card

):

mmenda

CAATs, Re

ations a

esults and R

and

Recommend

Page 13

dations

DM


DetailedManage

ATTA


No. 1239

d Resuement R

ACHMENT B


lts, FinRespon

B: Descript


dings, nses

tion of Purc

chniques (CAATs)

Recom

chase Card

):

mmenda

CAATs, Re

ations a

esults and R

and

Recommend

Page 14

dations

DM


DetailedManage

ATTA


No. 1239

d Resuement R

ACHMENT C


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 15

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 16

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 17

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 18

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 19

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 20

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 21

DM


DetailedManage

ATTA(cont


No. 1239

d Resuement R

ACHMENT Ctinued)


lts, FinRespon

C: County


dings, nses

Procureme

chniques (CAATs)

Recom

nt Office Ma

):

mmenda

anagement

ations a

Response

and

Page 22

purchasing card audit using computer-assisted udit … · 2019. 11. 20. · n page 6. ty executiv...

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