Purchasing Cardholders, Site Managers and Stakeholders,

UW System Administration's Office of Internal Audit recently completed another round of purchasing card review. Please see below for information about the audit, the issues identified and the actions taken by the University.



Audit Summary

Audit Cycle Dates: 07/01/2017 - 12/29/2017
Number of Transactions Tested: 130
Dollar Amount of Transactions Tested: $197,405.12
Number of Divisions Tested: 23

Audit Findings

Total Number of Audit Findings: 13
Total Dollar Amount of Audit Findings: $11,685.74
Number of Divisions with Audit Findings: 9

Utilization of UW Resources Personal Purchases Approvals Shipping Serial Purchasing Gift Card Policy Violation
             4             3            2          2            1           1

Utilization of UW Resources: The audit identified four transactions with non-contract vendors in which the same or similar items were available through UW channels (e.g. Shop@UW, DoIT, DoIT Tech Store). In one instance, a cardholder purchased a Bose speaker from Best Buy for $199.99. The same speaker was available through the Staples contract in Shop@UW for $119.99. In other instances, cardholders purchased computers and smart phones without consulting the Division of Information Technology.

Note: The Staples catalogue is only available through a “punch-out” site. Users will only find Staples products searching the punch-out site and not the Shop@UW homepage.

Personal Purchases: The audit identified three instances in which the cardholder or a designated user inadvertently used the purchasing card for a personal purchase. In all three instances, the purchase was identified by the cardholder and reimbursed to the University prior to the audit commencing.

Approvals: The audit identified two transactions in which approvals were not completed in a timely fashion or the documentation was not dated, making it impossible to determine when the approvals were obtained. Purchasing Card Procedure 300.5 - Site Manager Review and Reconciliation states all Cardholder Statements must be signed and dated within 30 days of the billing cycle close date. As a reminder, the cardholder's and site manager's signatures/dates must be on the Cardholder Statement, not the Cardholder Activity Report.

Shipping: The audit identified two transactions in which merchandise was shipping to a cardholder's personal residence, but no justification was provided. All merchandise must be shipped to a campus address unless a cardholder documents a business reason for having the materials shipped elsewhere (e.g. I shipped this purchase to my out-of-state research site so I did not have to take the materials with me on the plane).

Serial Purchasing: The audit identified one instance of serial purchasing in which the cardholder made two separate payments to the same vendor for a total of more than $5,000, in lieu of setting up a purchase order. By doing so, the cardholder bypassed the best-judgment purchase limit as well as the single purchase limit on the purchasing card.

Gift Card Policy Violation: The audit identified one instance in which a cardholder purchased gift cards in increments of $25, but then gave multiple $25 gift cards to the same recipient.

Other Audit Concerns

The audit identified 43 transactions with vendors listed on one of the Ineligible Vendor Lists at http://www.bussvc.wisc.edu/purch/inel.html. While these purchases did not result in audit findings during this round of audit, similar purchases may result in audit findings in future rounds of audit. Of the 43 transactions, over half of the purchases were made from the same three vendors:

Vendor Number of Transactions Dollar Amount
  ACCO Brands Direct                          11           $628.55
  McMaster-Carr                           8           $688.03
  Stamps.com                           6           113.91

Please take this opportunity to review the Ineligible Vendor Lists and refrain from making future purchases with the vendors identified.

Warnings/Revocations

If, as a result of an audit or monitoring, a transaction is found to violate UW-Madison Purchasing Card Policy or Procedures, the following will occur:

  1. If the cardholder has not had a violation within the previous two-year period, the cardholder will receive a written warning from the Purchasing Card Program Manager. A copy of the written warning will also be sent to the site manager, the divisional Chief Financial Officer and the Associate Vice Chancellor and Controller (Interim) for Business Services. The written warning will remain on file in the Purchasing Card Program Office for two years. Two years from the date of the communication, the warning will be expunged.
  2. If the cardholder has two violations within a two-year period, all purchasing cards issued to the cardholder will be revoked. After one year, the employee may reapply for a purchasing card. If the application is approved, the employee will be required to attend purchasing card training.
Based on the results of this review, the following warnings and card revocations have been issued:

                                    Warnings: 10*        Card Revocations: 0

*In some cases, one transaction resulted in multiple audit findings. That is why there are 13 audit findings, but only 10 warnings issued.

Contact

If you have any questions/concerns, please contact the Purchasing Card Program Manager, Meghann Grove, at meghann.grove@wisc.edu.